 "Convert legacy to promote technology: DoT to Modi")
The telecom sector is set to witness a makeover in the next two years, according to the Department of Telecommunications (DoT)’s presentation to Prime Minister Narendra Modi last month.
In the presentation, M F Farooqui, then secretary of the DoT (he retired last week), said the government should convert legacy issues related to spectrum to promote technology, ensuring transparency in service offering. Farooqui noted that over the next two years, all pending policy matters need to be cleared while the government works on infrastructure development for the sector.
According to Farooqui, the DoT would need about Rs 10,000 crore annually over the next few years for public infrastructure development. At the moment, the government gets about Rs 8,000 crore annually from private companies as part of their contribution to the Universal Service Obligation Fund (USOF). Private telecom operators pay about five per cent of their adjusted gross revenue to USOF for development of public infrastructure for the telecom sector.
The DoT plans to clear regulations on trading, sharing, harmonisation and de-licensing of spectrum within the next six to 18 months to ensure efficient usage of the scarce natural resource. Auction of all traditional bands, which are already being used by the operators in India such as 1,800 MHz, 900 MHz, 2,100 MHz, and 2,300 MHz, will be conducted within the next nine months. Auction of the 700 MHz band of radio waves would be done in the next two years.
Over the next year, the DoT would complete the process of liberalising licences and all existing spectrum bands as technology-neutral. The DoT would also finalise measures, which the government would take to promote domestic research and development and manufacturing for the telecom sector within the next year, according to another communication of the DoT.
Farooqui's presentation to Modi says the DoT would collaborate with state governments with consultative right-of-way policy and would ensure delivery of state government services to the citizens using broadband. The government is already in the process of establishing the Rs 20,000-crore National Optical Fibre Network to connect 250,00 gram panchayats for broadband.
The project is scheduled to be completed in three phases by March 2017. The ongoing project of establishing mobile networks in the Naxal-hit areas is aimed to be executed within the next 18 months. The process of establishing cellular networks in north-eastern states, Farooqui stated, would take about three years, while the same in the other uncovered areas, such as the Himalayan states and Islands such as Andaman, would take about five years.
Meanwhile, the DoT is also in the process of restructuring the levy structure of the USOF, which it hopes to finalise in the next nine months. Cellular operators have repeatedly said that the levy in India is much higher than other countries and needs to be lowered. According to DoT's data, the government has collected Rs 52,722.64 crore under USOF since its inception in 2002-03. However, over the past 10 years, it has allocated only Rs 15,784.4 crore or 30 per cent of what it has collected so far. Interestingly, the USOF levy is just two per cent in Colombia and Pakistan, while it is just one per cent in Brazil and 0.8 per cent in Canada, according to GSM Association that represents mobile operators worldwide.
The DoT also plans to rationalise other levies such as spectrum usage charges, within the next one year. The Communications Bill is likely to be in place within 15 months, while a comprehensive communication plan for disaster management would be prepared in nine months. The long-pending process of revival of public sector telcos - Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd - was also on the agenda. By September 2014, the strategy for revival would be finalised and the revival plan would be implemented by June 2016, it added.
The outgoing government in its interim Budget in February had said it aimed to generate Rs 38,954 crore from communication services during 2014-15. This includes receipts from spectrum sale, licence fees and one-time spectrum charges. The government got Rs 61,162 crore in the auction held in February this year. Of this, it was to get Rs 18,296 crore during the financial year ended March, about 61 per cent higher than the Budget target of Rs 11,343 crore.
In the presentation, M F Farooqui, then secretary of the DoT (he retired last week), said the government should convert legacy issues related to spectrum to promote technology, ensuring transparency in service offering. Farooqui noted that over the next two years, all pending policy matters need to be cleared while the government works on infrastructure development for the sector.
According to Farooqui, the DoT would need about Rs 10,000 crore annually over the next few years for public infrastructure development. At the moment, the government gets about Rs 8,000 crore annually from private companies as part of their contribution to the Universal Service Obligation Fund (USOF). Private telecom operators pay about five per cent of their adjusted gross revenue to USOF for development of public infrastructure for the telecom sector.
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The DoT plans to clear regulations on trading, sharing, harmonisation and de-licensing of spectrum within the next six to 18 months to ensure efficient usage of the scarce natural resource. Auction of all traditional bands, which are already being used by the operators in India such as 1,800 MHz, 900 MHz, 2,100 MHz, and 2,300 MHz, will be conducted within the next nine months. Auction of the 700 MHz band of radio waves would be done in the next two years.
Over the next year, the DoT would complete the process of liberalising licences and all existing spectrum bands as technology-neutral. The DoT would also finalise measures, which the government would take to promote domestic research and development and manufacturing for the telecom sector within the next year, according to another communication of the DoT.
Farooqui's presentation to Modi says the DoT would collaborate with state governments with consultative right-of-way policy and would ensure delivery of state government services to the citizens using broadband. The government is already in the process of establishing the Rs 20,000-crore National Optical Fibre Network to connect 250,00 gram panchayats for broadband.
The project is scheduled to be completed in three phases by March 2017. The ongoing project of establishing mobile networks in the Naxal-hit areas is aimed to be executed within the next 18 months. The process of establishing cellular networks in north-eastern states, Farooqui stated, would take about three years, while the same in the other uncovered areas, such as the Himalayan states and Islands such as Andaman, would take about five years.
Meanwhile, the DoT is also in the process of restructuring the levy structure of the USOF, which it hopes to finalise in the next nine months. Cellular operators have repeatedly said that the levy in India is much higher than other countries and needs to be lowered. According to DoT's data, the government has collected Rs 52,722.64 crore under USOF since its inception in 2002-03. However, over the past 10 years, it has allocated only Rs 15,784.4 crore or 30 per cent of what it has collected so far. Interestingly, the USOF levy is just two per cent in Colombia and Pakistan, while it is just one per cent in Brazil and 0.8 per cent in Canada, according to GSM Association that represents mobile operators worldwide.
The DoT also plans to rationalise other levies such as spectrum usage charges, within the next one year. The Communications Bill is likely to be in place within 15 months, while a comprehensive communication plan for disaster management would be prepared in nine months. The long-pending process of revival of public sector telcos - Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd - was also on the agenda. By September 2014, the strategy for revival would be finalised and the revival plan would be implemented by June 2016, it added.
The outgoing government in its interim Budget in February had said it aimed to generate Rs 38,954 crore from communication services during 2014-15. This includes receipts from spectrum sale, licence fees and one-time spectrum charges. The government got Rs 61,162 crore in the auction held in February this year. Of this, it was to get Rs 18,296 crore during the financial year ended March, about 61 per cent higher than the Budget target of Rs 11,343 crore.