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Updated: December 31, 2011 22:57 IST

Telecom sector still at the crossroads

Sandeep Joshi
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Union Minister of Communications and Information Technology Kapil Sibal.
PTI
Union Minister of Communications and Information Technology Kapil Sibal.

Kapil Sibal will have to take measures to instil confidence in the telecom sector, besides bringing in more foreign investments

Soon after taking charge from his predecessor A. Raja (now in jail in the 2G spectrum scam case), Telecom Minister Kapil Sibal on January 1 last year came out with his ‘100-day' agenda, promising major policy initiatives for the troubled telecom sector. But even after one year, the telecom sector it still standing at the crossroads.

Pointing towards lacunae in the national telecom policy for the massive spectrum scam in 2008, Mr. Sibal had promised a ‘clear and transparent regime' to address all issues plaguing the sector. Though the Department of Telecommunications (DoT) has come out with the draft telecom policy, its main contours that would shape the industry's future are still not clear.

The most controversial issue being one-time charge for the spectrum that old operators have been possessing. The National Telecom Policy is likely to be announced in mid-2012.

How the things will shape up for the telecom sector in 2012 has been spelt out in the draft policy which says that there will be new licensing norms, exit policy for operators, while sharing and trading of spectrum, and mergers and acquisitions will be allowed.

Similarly, spectrum will help government generate more revenue in a transparent manner. But how will the DoT address the growing need for more spectrum is still unclear even as its efforts to get radio waves vacated from defence forces have failed so far.

Mr. Sibal had pinned major hopes on the launch of 3G services to improve sentiments in the market, which has failed to take off in a big way. But the biggest twist has been the differences between operators and the DoT over intra-circle roaming, the issue which is now in court.

The government also continues to struggle while dealing with security-related issues. Though the BlackBerry issue has taken the backseat for now, monitoring of social networking websites and Internet content has put the government in the dock. Similarly, no major progress has been made on the issue of electromagnetic radiation from growing number of towers and skyrocketing sales of mobile handsets. Notably, all these were major priorities of the DoT in 2011.

However, on two fronts — introduction of mobile number portability (MNP) and check on unsolicited telemarketing calls — the DoT has delivered.

While the new policy talks about expansion of MNP from circle to pan-India level, it also promises to end national roaming that would make calls cheaper. But Mr. Sibal will have to focus on pesky SMS being generated from the Internet.

In 2012, apart from coming out with a strong and effective new telecom policy with futuristic goals, Mr. Sibal will have to take measures to instil confidence in the telecom sector, besides bringing in more foreign investments. Proliferation of broadband is a major task in hand, streamlining the functioning of loss-making Bharat Sanchar Nigam Ltd., which includes bringing in the voluntary retirement scheme for its three-lakh employees and a public issue to improve the financial health of the telecom PSU, will be a big challenge for the Minister.

Manufacturing is another area where the DoT needs to focus this year. Mr. Sibal has already announce policy initiatives to give boost to domestic manufacturing and preferential treatment to smaller firms, but to check growing influence of foreign players in the growing telecom sector, particularly that of Chinese multi-national firms in view of risks related to national security, will be a major challenge.

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One hope the new policy will be underpinned by transparency and clarity. The government needs to get back the public trust which has been vanquished by the scams. If the new policy could achieve that the government would have demonstrated that it has learnt from mistakes and the unpleasant and unedifying events in the recent past.

from:  B. Baburajan
Posted on: Jan 1, 2012 at 18:49 IST
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