Telecom minister Kapil Sibal unveiled on Monday the main aspects of the New Telecom Policy 2011, which aims to bring more transparency and certainty in the Indian telecom market.
As expected, spectrum is one of the main focuses of the new policy. In a…
Telecom minister Kapil Sibal unveiled on Monday the main aspects of the New Telecom Policy 2011, which aims to bring more transparency and certainty in the Indian telecom market.
As expected, spectrum is one of the main focuses of the new policy. In a statement, the Department of Telecommunications (DoT) wrote that spectrum will no longer be bundled with licences in order to incentivise companies to use it more efficiently.
Under the previous policy, once a company accumulated a certain number of customers it was entitled to receive more spectrum.
“As a result, companies sought to acquire customers at all costs. There was no incentive to use spectrum efficiently. With the new policy, companies will likely be required to acquire spectrum separately and at market value,” Mahesh Uppal, director of consultancy Com First (India), told TelecomFinance before details of the new policy were revealed.
The DoT also said that operators would be allowed to share and trade spectrum. This aspect of the policy is reportedly aimed at the largest carriers, which have added many customers in recent years.
In addition, the DoT plans to introduce a unified licence, allowing operators to choose the telecom services they want to provide under a single licence.
Another rule will provide exit routes for operators, in an effort to consolidate the Indian telecom market currently populated with about 12 carriers per service area. But the telecom minister reportedly said he would not let this number fall below six.
The long-awaited NTP 2011 is being carefully scrutinised, as the policy has not been updated since 1999. While the Indian market continues to remain attractive despite a lack of transparency and the 2G scandal that cost former telecom minister A. Raja his job, Ravishankar Raghavan, a principal in the tax group at Majmudar & Co hopes that “with a clearer regulatory landscape, foreign investments in the booming telecom sector should be further encouraged.”
