India unveils draft telecom policy

11 Oct 2011

India’s telecoms minister has unveiled a draft version of the country’s National Telecom Policy 2011 that seeks to cover all aspects of the sector. The new policy comes in the wake of the licensing scandal of 2008/09 which may have cost the state up to USD39 billion in lost revenue. The minister announced a raft of plans designed to modernise the Indian market, such as permitting cellcos to share spectrum, allowing consolidation via M&A activity, the release of 300MHz of additional spectrum in 2017 and a further 200MHz in 2020, and forcing operators to provide roaming between the country’s telecoms ‘circles’.

Advocates of the policy say that it represents a shift in the development of Indian telecoms regulation. The minister said India’s earlier telecoms policy was aimed at facilitating ultra high growth and very low tariffs, whereas the new policy is ‘comparable with that in any country that has a mature market’ and one which would allow commercial forces to drive the market.

Critics, however, say that the draft policy lacks specific details on how the objectives will be implemented and over what timeframe. They also state that not enough information is provided regarding how mergers will be handled, nor on changes to taxation on telecoms equipment, which are currently among the highest in the word.

A final version of the policy is expected in December.