Draft telecom policy challenging, ambitious, say experts

The government envisages broadband for all by 2022, an investment of $100 billion, 40 lakh jobs and 5G services, according to the draft of the National Digital Communications Policy 2018, but experts remain sceptical.

Giving relief to the telecom industry, the government plans to review the whole licensing and regulatory environment. This will include the review of various levies and licence fees, USOF levy, rationalisation of spectrum usage charges among others, according to the draft.

It has a three point action plan -- first, 'Connect India' under which it plans to set up a robust digital communications infrastructure, second, 'Propel India' where the power of emerging digital technologies, including 5G, artificial intelligence (AI), Internet Of Things (IoT) will be harnessed and third, 'Secure India' to focus on ensuring individual autonomy and choice, data ownership, privacy and security.

Many experts gave a thumbs up to the policy calling it progressive, but said the implementation could be a big challenge in the light of existing licensing regime.

Mahesh Uppal, director, ComFirst, a telecom research firm, said the policy's heart is in the right place. "It will be fair to say the draft of the policy is progressive and the government is keen to deliver widest range of new services and technologies to the Indian consumers at affordable costs."

ICICI Securities in a research note said the draft policy looks highly ambitious, more like wish list, and has placed significant emphasis on building a strong fiber network in India.

"Given the sector's capital-intensive nature, the policy aims to attract long-term, high quality and sustainable investments. It aims to pursue regulatory reforms to ensure that the regulatory structures and processes remain relevant, transparent, accountable and forward-looking. The policy also aims to remove regulatory barriers and reduce the regulatory burden that hampers investments, innovation and consumer interest," the note said.

But, a review of existing levies and taxes on the industry won't make a significant impact as the sector is reeling under a high debt.

According to Uppal, "For older telecom players, there is some hope in the proposals to review various levies and charges on the telecom industry. But this will mean a willingness to accept a dent in government's revenues, at least in the short term."

Hemant Joshi, partner at Deloitte India, said the industry has a high debt and with intense competition, margins and average revenue per user are decreasing. "The policy talks about attracting an investment of $100 billion, but where will the money come from?," he asked.

There is no clarity or any roadmap on reduction of the financial stress of the industry. "This is a fundamental issue which we need to address as a country. Telecom is as strategic as railways, roads and electricity. It is necessity of life now," Joshi said.

Under the policy a National Broadband Mission has been proposed with provisions to facilitate massive optical fibre rollout across the country. Also, requirement for telecom installations and the associated cabling and in-building solutions has been proposed to made mandatory in all commercial, residential and office spaces by amending the National Building Code of India (NBC), through Bureau of Indian Standards (BIS).

The satellite communication policy will be revised to deliver affordable connectivity. It will also promote the use of products with intellectual property rights registered in India. "Preferring domestic products and services with domestically-owned IPR in the procurement by government agencies, especially for the procurement of security related products," it said.

The government aims to enable fixed line broadband access to 50% of households and start landline portability services. The policy suggests providing universal broadband coverage at 50 Mbps speed to every citizen and providing 1 Gbps (gigabit per second) connectivity to all gram panchayats by 2020 and 10 Gbps by 2022.

The draft policy proposes recognising of mid-band spectrum, particularly the 3 GHz to 24 GHz range, for next-generation networks. It also outlined roadmap for high in demand backhaul spectrum for transmitting signals between mobile towers in E and V band as per international best practices. "Promoting the effective utilisation of high capacity backhaul E-band (71-76/81-86 GHz) and V-band (57-64 MHz) spectrum in line with international best practices ..Rationalising annual royalty charges for microwave links for backhaul connectivity," the draft said.

CONNECTING THE NATION

• $100 billion – Govt aims to attract foreign investment in telecom sector by 2022
   
• 1 million – people to be trained/re-skilled for building new-age skills
   
• 5 billion connected devices – Internet of Things to be expanded to
   
• 1Gbps – internet speed to be provided to all gram panchayats by 2020
   
• 10 Gbps – internet speed to be enhanced by 2022
   
• 8% of GDP – Digital communications sector to account in 2018
   
• India to be among 50 nations in the ICT Development index frm 134 in 2017
   
• Review of licence fees, spectrum usage charges, universal service obligation fund levy
   
• Fixed line broadband access to 50% of households and landline portability services
   
• National Broadband Mission planned to facilitate massive optical fibre rollout