New telecom policy needs changes: report

NEW DELHI, AUG. 30. The New Telecom Policy `99, defended vigorously by Mr. Ram Vilas Paswan in the Lok Sabha yesterday, is no different from the National Telecom Policy `94 which it had set out to rectify. Unless a mid-course correction is not made, the two main underlying objectives of NTP `99 - providing phones on demand by March 31 and making them affordable and available freely - are unlikely to be met, opines the Parliamentary Standing Committee on Information Technology in its report on implementation of NTP `99 tabled in Lok Sabha today.

The telecom policy shaped by the NDA Government suffers from the same lacunae and contradictions that had dogged the policy announced during the Congress regime. Policy makers are once again heavily banking on the private sector to increase telecom density. The Government expects the private sector to install over one crore fixed phones and nearly four crore cell phones by 2010. In reality, the existing fixed phone companies have provided only two lakh phones as against their commitment of 20 lakh lines. If the past performance of private operators is any guide, the committee apprehends that the target will not be reached in the foreseeable future.

The BSNL and the MTNL, expected to contribute substantially to the effort of increasing teledensity, are in dire need of funds. According to the Communications Ministry's Perspective Plan 2000- 2010, the funds shortfall will be a staggering Rs. 85,000 crores. This paucity of resources will make it difficult for the two state-run companies to play their part in increasing teledensity by adding 60 lakh lines every year till 2006. ``The projections made in the perspective plan are likely to go haywire,'' noted the panel while endorsing BSNL's plea for tax reliefs to enable it meet its social commitment of providing phones in villages and low revenue generating areas.

In 1994 too, the policy makers had banked on the private sector to reach the objectives set out in the National Telecom Policy. It was expected to invest Rs. 5,00,000 crores and pay the Government Rs. 1,06,000 crores as levy. But that was not to be resulting in targets set for `97 being deferred to 2002.

The panel urged the Government to strictly enforce the universal service obligation (USO) on all those private companies who have not fulfilled their quota of rural telephony. As all private companies have failed miserably in providing phones in villages (only 562 against the committed one lakh phones), they should be asked to make the penalty payments immediately and the amount transferred to the BSNL to do the needful. The panel also took the Government to task for not clearly spelling out the quantum of USO. This has prevented the payment of compensation to the BSNL for providing phones in villages and ``may affect adversely its financial health in the long run''.

The projections made in the Perspective Plan which state that the annual requirement of fixed phones will decrease by the year 2004 and that of mobile phones will steadily increase appear tenuous. The committee felt that the projections are based on the growth model achieved in developed countries and so it is debatable whether the demand for mobile phones will outstrip that of fixed phones.

While the policy makers remained obsessed with creating a level- playing field for all the players, the waiting list for phones in rural areas kept on increasing. The waiting list in urban areas did come down, but it increased from 10.5 lakhs in April `99 to 17 lakhs by April 2001. In this respect, it noted that the task was difficult because besides being inaccessible, demand in rural areas is also scattered. In view of the circumstances and keeping in view the fact that one-third of the villages are yet to be reached, the committee felt the target of telephone on demand by March 31, 2002 is ``most unlikely to be fulfilled''.

Apart from losing money in providing phones to the common man, the BSNL and the MTNL are going to lose a substantial part of the creamy layer of their business to private operators.