Telecom policy must be realistic

Telcos are weighed down by huge debt and competition within the sector. It will be extremely difficult for them to raise $100 billion for investment.

The government’s new telecom policy, called the National Digital Communications Policy 2018, is meant to be an improvement on the telecom policy of 2012. The fact that an updated version of the policy has been formulated and is planned to be implemented soon shows that the sector has changed fast and there are new requirements and objectives. The government unveiled the draft policy last week. It is to be finalised in the next few days incorporating ideas and suggestions from the public, if they are found suitable. It is set to be implemented from June. The need for a new policy was felt because the telecom sector has seen rapid changes in the last few years and there are bigger changes in the offing. India has the second largest internet subscriber base in the world now. The sector will be revolutionised with the advent of 5G, Artificial Intelligence, the Internet of Things and other technologies. The new policy should provide a framework for the technology, prepare the present players and users and customers for it and facilitate the investments required.

The policy aims to provide universal broadband coverage at 50 Mbps to every citizen, attract US $100 billion investment in the sector and provide 40 lakh jobs by 2022. It also proposes to address the problems of the debt-ridden telecom sector by reviewing spectrum fees, spectrum usage charges and universal service obligation fund levy. Taxes and levies on digital communications equipment, infrastructure and services are to be rationalised. The policy is long on these aims and short on how these are to be achieved. In fact, many of the objectives laid down in the new policy were there in the old policy. Broadband access to all citizens was an objective of the old policy. The new policy mentions manufacturing of semiconductor chips as an important objective. This was talked about even before the 2012 policy but the initiatives in this direction did not yield any results. Another stated aim in the policy is improving the working of telecom public sector undertakings. This is also an old idea which has not worked.

Telcos are weighed down by huge debt and banks are unwilling to lend money to them. They are also bleeding from competition within the sector. It will be extremely difficult, if not impossible, for them to raise $100 billion for investment. Therefore the expectation of 40 lakh jobs to be created from investments in the sector may be unrealistic. The telecom sector will see major changes and it calls for big investments and initiatives. But the policy should lay out a more realistic and practical roadmap for the sector.

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Telecom policy must be realistic

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