India Telecom Sector - Providing Affordable and Effective communication Facilities

Indian telecom sector has come a long way in achieving its dream of providing affordable and effective communication facilities to its citizens as envisaged in New Telecom Policy (NTP) 1999. As a result common man today has access to this most needed facility. Larger efforts are continuously being made to provide universal service to all uncovered areas including, rural areas. The other thrust areas include, building a modern and efficient telecommunications infrastructure, transforming telecommunication sector to a greater competitive environment with equal opportunities and level playing field for all players, strengthening research and development efforts in the country, achieving efficiency and transparency in spectrum management and enabling Indian telecom companies to become global players. The reform measures coupled with the proactive policies of the Department of Telecommunications have resulted in an unprecedented growth of the telecom sector. Today, the Indian telecommunications network with over 375 million connections is third largest network on overall basis and second largest wireless network in the world. India is also the fastest growing telecom market in the world with an average addition close to 10 million subscribers per month. The Department of Telecommunications has been able to provide state of the art world-class infrastructure at globally competitive tariffs and reduce the digital divide by extending connectivity to the unconnected areas. India has emerged as a major base for the telecom industry worldwide and it is the endeavor of the Government to facilitate further growth of this vital industry as it is not just the growth of the sector but it has a ‘multiplier effect’ on the economy as a whole. Rural Telephony Promotion of rural telephony and accessibility of telephones to remote areas is an important thrust area. The strategy for network expansion in rural areas mainly involves provision of phones in the viable areas through market mechanisms and releasing funds from the Universal Service Obligation Fund. As on March 2008, the Government has released approximately Rs 6,400 crores for rural telephony and during the last one and half years Rs 1646 crores have been released from USOF. Under the Bharat Nirman Programme, a target of providing VPTs in 66,822 uncovered villages have also been undertaken and till 30th November 2008, nearly 55,851 villages have been provided with telephones. Having realized the role of wireless phones because of the convenience, affordability and the capacity to reach out the masses, particular in rural and remote areas, efforts have been made under USOF to strengthen infrastructure for providing wireless phone services in these areas. So far the USO mandate was restricted to supporting wireline and by providing Village Public telephones (VPTs) and Rural Direct Exchange Lines. In the recent past USOF has floated schemes to provide support for about 19,000 shared towers by providing mobile telephone services in rural areas. With a view to enhance availability of wireless services in rural areas, the Government has taken a decision to exempt rural wireline from license fees from 1st October 2008. This will give a boost to rural telephony and will encourage extension of broadband services in rural areas. In order to reduce input cost of Telecom Access Providers and thereby facilitating reduction in tariff and enhanced teledensity particularly in rural areas new guidelines on sharing of infrastructure have been announced. These guidelines provide for sharing of active infrastructure amongst service providers based on mutual agreement entered amongst them. 3G Services and Broadband Wireless Services In a pioneering decision, the Government decided to auction 3G & BWA spectrum. The broad policy guidelines for 3G & BWA have already been issued and allotment of spectrum will be done through simultaneous ascending e-auction process by a specialized agency. The 3G is slated for auction at the end of January 09 and BWA auction will be after the two days from the day of close of the 3G auction. New players would also be able to bid thus leading to technology innovation, more competition, faster roll out and ultimately greater choice for customers at competitive tariffs. The 3G will allow telecom companies to offer additional value added services such as high – resolution video and multi media services in addition to voice, fax and conventional data services with high data rate transmission capabilities. BWA will become a predominant platform for broadband roll out services. It is also an effective tool for undertaking social initiatives of the Government such as e-education, telemedicine, e-health and e-Governance. Providing affordable broadband, especially to the suburban and rural communities is the next focus area of the Department. BSNL and MTNL have already been allotted 3G and BWA spectrum with a view to ensuring early roll out of 3G and WiMax services in the country. They will pay the same price for the spectrum as discovered through the auction. While, the Prime Minister Dr. Manmohan Singh launched the MTNL’s 3G mobile services on the inaugural function of ‘India Telecom 2008’ held on 11th December, 3G services of BSNL are likely to be launched in Chennai this month. Mobile Number Portability (MNP) Service Licence Mobile Number Portability (MNP) allows subscribers to retain their existing telephone number when they switch from one access service provider to another irrespective of mobile technology or from one technology to another of the same or any other access service provider. The Government has already announced the guidelines for Mobile Number Portability (MNP) Service Licence in the country and these services are likely to be available by June 2009 in four metros and thereafter will be extended in phases to the rest of the country. Mobile Virtual Network Operators (MVNOs) The guidelines for Mobile Virtual Network Operators (MVNOs) to launch operations in India are set to be unveiled soon. MVNOs offer mobile services without owning cellular networks or airwaves (spectrum) on which telecom signals travel. Their business model involves buying airtime from existing operators that own telecom infrastructure and selling it to consumers under their own brand. At present, there are 360 MVNOs operating globally. The entry of MVNOs will increase competition in the world’s fastest growing mobile market and will further benefit the customer by way of reduced tariff. Making India a Manufacturing Hub Indian telecom industry manufactures a complete range of telecom equipment using state of the art technologies designed specifically to match the diverse terrain and climate conditions. Production of telecom equipment has increased significantly from Rs 14000 crore in 2003-04 to Rs. 41270 crore in 2007-08. Rising demand for a wide range of telecom equipments, particularly in the area of mobile telecommunications, has provided excellent opportunities to domestic and foreign investors in the manufacturing sector. The last three years saw many renowned telecom companies setting up their manufacturing units in different parts of the India. Elcoteq, for instance has set up handset manufacturing facilities in Bangalore while Nokia has set up its manufacturing units in Chennai. Other major companies like Ericsson, Motorola, Faxconn, Aspocomp, Salcomp, Samsung, Siemens, CISCO, Perlos, Solectron etc. have also set up their manufacturing base in India. *Inputs from the Department of Telecommunications http://pib.nic.in/