Timely Telecom Policy Critical to Steer Growth

Published: 23rd June 2014 06:00 AM  |   Last Updated: 23rd June 2014 12:25 AM   |  A+A-

A telecom policy that adapts itself to the technological leap the industry has made and is capable of meeting future needs has become imperative. The existing policy was formulated in 1999 and successive governments have only tinkered with it to meet emerging situations. During the interregnum, technology has undergone a metamorphosis. Just the other day, a leading private telecom company unveiled its plans to provide 4G services all over the country. Needless to say, this will go a long way in removing the urban-rural digital divide. The Modi government’s plan to make e-governance a reality is also dependent upon taking the telecom sector to the next higher level.

The government has already indicated that it would soon come out with new policy rules that make room for spectrum sharing, number portability across all telecom circles and another auction of wireless bandwidth. A comprehensive review of the existing policy has become unavoidable. After all, the technology-based service sector will be India’s engine of growth. The service sector already contributes more to the gross domestic product (GDP) than manufacturing and agriculture. This shows how crucial telecom is to the economic growth of the country. Yet, technologically, India lags behind developed countries with 3G services inaccessible in most rural areas.

Apart from letting telecom companies share bandwidth and getting substantial revenue out of it, the government does not have much role to play. Growth in the telecom sector, therefore, depends on private investments. Alas, some incidents in the sector have shattered the confidence of investors. The reference is to the alleged irregularities in the allotment of 2G Spectrum in 2008 and the cancellation of 122 telecom licences by the Supreme Court in 2012. A tax dispute with Vodafone has also adversely affected investor confidence. For foreign telecom companies, the sheer size of existing and potential telecom subscribers is a great attraction. What they need are certain certainties to do business. Clearing all the pending issues and publishing a road map for the next spectrum auction will benefit both investors and consumers.

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