Sectoral crisis remains unaddressed. Free national roaming and number portability allowed

The Union Cabinet on Thursday approved the National Telecom Policy (NTP) 2012, which has been released after a delay of over a year.

Originally intended to be NTP 2011, the draft policy was released for public comments only in October 2011, forcing it to be rechristened NTP 2012. The actual timelines for implementation of individual announcements within the new telecom policy are yet to be made known.

With the new policy in place, consumers who use national roaming can now expect to pay local call charges though it is unclear when ‘free roaming' will be initiated. At present, consumers pay local call charges and a premium when travelling outside their service area.

The policy also allows national number portability, but again, with no visible timelines.

Other forward-looking propositions like resale of services could become critical in the backdrop of the Supreme Court's cancellation of 122 licences, which will cease to exist as of August 1, 2012. A sharp reduction in the competition level from 14 operators currently to 7-8 operators could be made up by allowing mobile companies to set up resellers. Services resale is universally recognised as a way to increase competition without duplicating infrastructure or fragmenting the spectrum. Additionally, it mentions cloud computing, next generation networks, IPV6 and Voice over Internet Protocol (VoIP) as thrust areas — all of which are forward-looking and embrace future technologies. It remains to be seen whether average Internet users will be allowed to use VoIP, especially since this move has been opposed vehemently over the last 5 years by cellular mobile operators.

Apart from these, experts say, there is very little in the policy that will help end the impasse faced by the telecom sector. Spectrum pricing, reserve price for the upcoming 2G auctions, historical pricing of spectrum for operators who have received spectrum beyond 6.2 MHz and the more recent contentious issues of refarming, etc, will have to be dealt with through executive decisions, most of which fall outside the purview of the NTP 2012 announcement.

It is also unlikely that the policy by itself will see any major reestablishment of investor confidence, which has been on the decline since late 2010. Both Foreign Direct Investments (FDI) and domestic investments faced a sharp decline during 2010-11 vis-à-vis previous years, according to a recent PWC report. The trend has continued downwards even for the fiscal year ending 2012.

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