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Monday, October 1, 2012

New Telecom Policy: Free roaming, portability

New Delhi: To boost transparency and revive growth in the scandal-hit sector, the government on Thursday approved a new telecom policy that aims to ultimately abolish roaming charges, besides relaxing Internet telephony rules...

The National Telecom Policy 2012, which replaces more than decade-old rules, was approved by the Cabinet headed by Prime Minister Manmohan Singh, Telecom Minister Kapil Sibal told reporters after the Cabinet meeting.

"The target is one nation full mobile number portability and working towards one nation free roaming," Telecom Minister Kapil Sibal said.

Under the new policy, the government plans to remove roaming fees, allowing users to retain their numbers even if they move from one circle or zone to another.

However, consumers will have to wait for some time for this as the Department of Telecom will first work out modalities of the new scheme before it is brought into force.

Consulting firm Deloitte said NTP will benefit consumers, though it may impact the operators negatively in the short term.

"Number portability is going to be boon for consumers as they would be able to retain the number even though they migrate from one telecom circle to other... Abolishing roaming charges would be negative in short term for operators as they would lose roaming revenue," Deloitte Haskins & Sells Partner Hemant Joshi said.

However, in the long run, as usage would increase with no roaming charges might offset the revenue loss caused to the operators, he added.

The NTP will also separate telecom licences and spectrum, against the current practice of bundling them, and will charge a market-derived price for the airwaves.

Also, rules for Internet telephony would be relaxed under the new policy as it envisages increasing penetration of telecom services in rural area from current level of around 39 to 70 percent by 2017 and 100 per cent by the year 2020.

Under the new policy, broadband speed has been increased to minimum of 2 megabit per second (mbps). This change will come into force with immediate effect.

The NTP also aims to ease mergers and acquisition rules in the sector and seeks to refarm, or switch, spectrum bands "from time to time" to make way for new technologies.

The Cabinet has also cleared the point that pertains to encouraging domestic manufacturing of telecom equipment.

"Making India a global hub for manufacturing. Till the time we will not set up industry here...India will not be able to become become global. It is very important because along with this prices of device will also come down," he said.

The major details of the manufacturing telecom equipments are part of National Policy of Electronics, which Sibal said is expected to be approved within a month.

"Electronics manufacturing policy is hopefully going to be decided this month.. It will go to Cabinet soon," he said.

The Cabinet has approved NTP 2012 with five changes related to revenue generation objective, Spectrum Act and TRAI Act. The government has deleted Spectrum Act, which was proposed in the policy.

"Spectrum Act has been deleted as a policy matter we don't intend to have a spectrum act anymore," Sibal said.

On giving more powers to TRAI, the Cabinet has added that policy making function would remain with government and not the sectoral regulator.

"We just want to add that policy making function would, however, continue to remain with government, means TRAI will not make policy," Sibal said.

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