Centre allays fears of telcos over new policy

 It was expected that the tariffs of various services would go up following the proposal to increase spectrum prices and reduction in the term of licences. The industry was of the view that growth of telecom sector would be affected.

“Instead of an increase in tariffs, the new policy will further fuel the competition besides ensuring robust growth of the sector,” Union Minister of State for Telecommunication Sachin Pilot said. 

Responding to the telecom firms fears that the new policy might make mobile services dearer, Pilot told Deccan Herald that the main purpose behind the NTP 2011 was to ensure that the government should get reasonable revenue while the industry continues to grow at a faster pace and maintain quality service.

The minister, who is involved in the policy-making process of the Department of Telecommunications, pointed out that despite telecom operators paying higher price for 3G, none of them was offering the third generation mobile services at higher rates.

He also noted that one operator even has announced free incoming while roaming. This was mainly due to intense competition as each operator knows that if he increases the prices, the subscribers will shift to other operator.

Pilot also said the operators have so far virtually enjoyed free spectrum which they got with licence, but now they would be asked to pay for this scarce national resource in such a way that the government also received revenues.

In the proposed NTP 2011, the Department of Telecom has planned to reduce licence period from existing 20 year to 10 years, while it was still studying TRAI proposals on 2G spectrum pricing that has recommended over six times increase in its prices.