Highlights of the Drafted Telecom Policy

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Oct. 13 – The Communication Ministry of India unveiled the new Telecom Policy which contains new rules for the industry. The revised rules, which will substitute the existing framework that has been in place since 1999, aims to have broadband on demand for all citizens.

According to the new policy, revenue generation will play an inferior role and the major objective is to increase rural teledensity to 100 percent by 2020. The new policy will de-link licenses from spectrum and the term of mobile permits would be divided to 10 years when they come up for renewal. The policy aims to make 300 MHz of spectrum available by 2017 and another 200 MHz by 2020.

The draft graph also proposes to remove the roaming charges, bring in a stronger customer grievance redressal machinery, recognize telecoms as an infrastructure sector giving it tax concessions, and extend preferential status to “Made in India” hardware products.

The guiding principle will highlight convergence of television, internet and internet services. Broadband download speed will be revised to 512 kbps vs. 216 kbps.

Also, it will allow users to port their mobile numbers, keeping the same number, even while switching service areas. The difference between local and STD calls would disappear, as the policy aims at a “one-nation-one-license” regime. Telecom operators would not require separate licenses for operations in various parts of the country and a single license would be sufficient. Mobile service providers would also gain from the policy as it proposes to allow companies to pool, share and later trade spectrum.

The final telecom policy will be announced by December.

Dezan Shira & Associates is boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients in India. To contact the firm, please email india@dezshira.com, visit www.dezshira.com, or download the firm’s brochure here.

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