(NTP 1999)
1.1 Importance of Telecommunications The Government of India (Government) recognises that provision of world class telecommunications infrastructure and information is the key to rapid economic and social development of the country. It is critical not only for the development of the Information Technology industry, but also has widespread ramifications on the entire economy of the country. It is also anticipated that going forward, a major part of the GDP of the country would be contributed by this sector. Accordingly, it is of vital importance to the country that there be a comprehensive and forward looking telecommunications policy which creates an enabling framework for development of this industry. 1.2 NTP 1994 - objectives and achievements In 1994, the Government announced the National Telecom Policy which defined certain important objectives, including availability of telephone on demand, provision of world class services at reasonable prices, ensuring India's emergence as major manufacturing / export base of telecom equipment and universal availability of basic telecom services to all villages. It also announced a series of specific targets to be achieved by 1997. As against the NTP 1994 target of provision of 1 PCO per 500 urban population and coverage of all 6 lac villages, DoT has achieved an urban PCO penetration of 1 PCO per 522 and has been able to provide telephone coverage to only 3.1 lac villages. As regards provision of total telephone lines in the country, DoT has provided 8.73 million telephone lines against the eighth plan target of 7.5 million lines. NTP 1994 also recognised that the required resources for achieving these targets would not be available only out of Government sources and concluded that private investment and involvement of the private sector was required to bridge the resource gap. The Government invited private sector participation in a phased manner from the early nineties, initially for value added services such as Paging Services and Cellular Mobile Telephone Services (CMTS) and thereafter for Fixed Telephone Services (FTS). After a competitive bidding process, licenses were awarded to 8 CMTS operators in the four metros, 14 CMTS operators in 18 state circles, 6 BTS operators in 6 state circles and to paging operators in 27 cities and 18 state circles. VSAT services were liberalised for providing data services to closed user groups. Licences were issued to 14 operators in the private sector out of which only nine licencees are operational. The Government has recently announced the policy for Internet Service Provision (ISP) by private operators and has commenced licensing of the same. The Government has also announced opening up of Global Mobile Personal Communications by Satellite (GMPCS) and has issued one provisional license. Issue of licenses to other prospective GMPCS operators is under consideration. The Government recognises that the result of the privatisation has so far not been entirely satisfactory. While there has been a rapid rollout of cellular mobile networks in the metros and states with currently over 1 million subscribers, most of the projects today are facing problems. The main reason, according to the cellular and basic operators, has been the fact that the actual revenues realised by these projects have been far short of the projections and the operators are unable to arrange financing for their projects. Basic telecom services by private operators have only just commenced in a limited way in two of the six circles where licenses were awarded. As a result, some of the targets as envisaged in the objectives of the NTP 1994 have remained unfulfilled. The private sector entry has been slower than what was envisaged in the NTP 1994. The government views the above developments with concern as it would adversely affect the further development of the sector and recognises the need to take a fresh look at the policy framework for this sector. 1.3 Need for a new telecom policy In addition to some of the objectives of NTP 1994 not being fulfilled, there have also been far reaching developments in the recent past in the telecom, IT, consumer electronics and media industries world-wide. Convergence of both markets and technologies is a reality that is forcing realignment of the industry. At one level, telephone and broadcasting industries are entering each other's markets, while at another level, technology is blurring the difference between different conduit systems such as wireline and wireless. As in the case of most countries, separate licences have been issued in our country for basic, cellular, ISP, satellite and cable TV operators each with separate industry structure, terms of entry and varying requirement to create infrastructure. However, this convergence now allows operators to use their facilities to deliver some services reserved for other operators, necessitating a relook into the existing policy framework. The new telecom policy framework is also required to facilitate India's vision of becoming an IT superpower and develop a world class telecom infrastructure in the country. [Top] 2.0 Objectives and targets of the New Telecom Policy 1999 The objectives of the NTP 1999 are as under:
In line with the above objectives, the specific targets that the NTP 1999 seeks to achieve would be :
The New Policy framework must focus on creating an environment, which enables continued attraction of investment in the sector and allows creation of communication infrastructure by leveraging on technological development. Towards this end, the New Policy Framework would look at the telecom service sector as follows :
3.1 Access Providers 3.1.1 Cellular Mobile Service Providers The Cellular Mobile Service Providers (CMSP) shall be permitted to provide mobile telephony services including permission to carry its own long distance traffic within their service area without seeking an additional licence. Direct interconnectivity between licensed CMSPs and any other type of service provider (including another CMSP) in their area of operation including sharing of infrastructure with any other type of service provider shall be permitted. Interconnectivity between service providers in different service areas shall be reviewed in consultation with TRAI and the same would be announced by August 15, 1999 as a part of the structure for opening up national long distance. The CMSP shall be allowed to directly interconnect with the VSNL after opening of national long distance from January 1, 2000. The CMSP shall be free to provide, in its service area of operation, all types of mobile services including voice and non-voice messages, data services and PCOs utilizing any type of network equipment, including circuit and/or packet switches, that meet the relevant International Telecommunication Union (ITU)/Telecommunication Engineering Center (TEC) standards. CMSP would be granted separate licence, for each service area. Licences would be awarded for an initial period of twenty years and would be extendible by additional periods of ten years thereafter. For this purpose, service areas would be categorized into the four metro circles and Telecom circles as per the existing policy. CMSP would be eligible to obtain licences for any number of service areas. Availability of adequate frequency spectrum is essential not only for providing optimal bandwidth to every operator but also for entry of additional operators. Based on the immediately available frequency spectrum band, apart from the two private operators already licenced, DOT / MTNL would be licenced to be the third operator in each service area in case they want to enter, in a time bound manner. In order to ensure level playing field between different service providers in similar situations, licence fee would be payable by DoT also. However, as DoT is the national service provider having immense rural and social obligations, the Govemment will reimburse full licence fee to the DoT. It is proposed to review the spectrum utilisation from time to time keeping in view the emerging scenario of spectrum availability, optimal use of spectrum, requirements of market, competition and other interest of public. The entry of more operators in a service area shall be based on the recommendation of the TRAI who will review this as required and no later than every two years. CMSP operators would be required to pay a one time entry fee. The basis for determining the entry fee and the basis for selection of additional operators would be recommended by the TRAI. Apart from the one time entry fee, CMSP operators would also be required to pay licence fee based on a revenue share. It is proposed that the appropriate level of entry fee and percentage of revenue share arrangement for different service areas would be recommended by TRAI in a time-bound manner, keeping in view the objectives of the New Telecom Policy. 3.1.2 Fixed Service Providers The Fixed Service Providers (FSP) shall be freely permitted to establish 'last mile' linkages to provide fixed services and carry long distance traffic within their service area without seeking an additional licence. Direct interconnectivity between FSP's and any other type of service provider (including another FSP) in their area of operation and sharing of infrastructure with any other type of service provider shall be permitted. Interconnectivity between service providers in different service areas shall be reviewed in consultation with TRAI and the same would be announced by August 15, 1999 as a part of the structure for opening up of national long distance. The FSP shall be allowed to directly interconnect with the VSNL after the opening up of national long distance from January 1, 2000. The FSP may also utilize last mile linkages or transmission links within its service area made available by other service providers. The FSP shall be free to provide, in his service area of operation, all types of fixed services including voice and non-voice messages and data services, utilizing any type of network equipment, including circuit and/or packet switches, that meet the relevant International Telecommunication Union (ITU) / Telecommunication Engineering Center (TEC) standards. The FSP shall be granted separate license, on a non-exclusive basis, for each service area of operation. Licences would be awarded for an initial period of twenty years which shall be extended by additional periods of ten years thereafter. The FSPs shall be eligible to obtain licences for any number of service areas. While market forces will ultimately determine the number of fixed service providers, during transition, number of entrants have to be carefully decided to eliminate nonserious players and allow new entrants to establish themselves. Therefore, the option of entry of multiple operators for a period of five years for the service areas where no licences have been issued is adopted. The number of players and their mode of selection will be recommended by TRAI in a time-bound manner. The FSP licencees would be required to pay a one time entry fee. All FSP licencees shall pay licence fee in the form of a revenue share. It is proposed that the appropriate level of entry fee and percentage of revenue share and basis for selection of new operators for different service areas of operation would be recommended by TRAI in a time-bound manner, keeping in view the objectives of the New Telecom Policy. As in the case for cellular, for WLL also, availability of appropriate frequency spectrum as required is essential not only for providing optimal bandwidth to every operator but also for entry of additional operators. It is proposed to review the spectrum utilisation from time to time keeping in view the emerging scenario of spectrum availability, optimal use of spectrum, requirements of market, competition and other interest of public. The WLL frequency shall be awarded to the FSPs requiring the same, based on the payment of an additional one time fee over and above the FSP entry fee. The basis for determining the entry fee and the basis for assigning WLL frequency shall be recommended by the TRAI. All FSP operators utilising WLL shall pay a licence fee in the form of a revenue share for spectrum utilization. This percentage of revenue share shall be over and above the percentage payable for the FSP licence. It is proposed that the appropriate level of entry fee and percentage of revenue share for WLL for different service areas of operation will be recommended by TRAI in a time-boutid manner, keeping in view the objectives of the New Telecom Policy. 3.1.3 Cable Service Providers Under the provisions of the Cable Regulation Act, 1995, Cable Service Providers (CSP) shall continue to be freely permitted to provide 'last mile' linkages and switched services within their service areas of operation and operate media services, which are essentially one-wav, entertainment related services. Direct interconnectivity between CSP's and any other type of service provider in their area of operation and sharing of infrastructure with any other type of service provider shall be permitted. Interconnectivity between service providers in different service areas shall be reviewed in consultation with TRAI and the same would be announced by August 15, 1999 as a part of the structure for opening up national long distance. In view of convergence, it is highly likely that two-way communication (including voice, data and information services) through cable network would emerge in a significant way in future. Offering of these services through the cable network would tantamount to providing fixed services. Accordingly, in case the above two-way communication services are to be provided by CSPs utilising their network, they would also be required to obtain FSP licence and be bound by the licence conditions of the FSPs, with a view to ensure level playing field. 3.2 Internet Telephony Internet telephony shall not be permitted at this stage. However, Government will continue to monitor the technological innovations and their impact on national development and review this issue at an appropriate time. 3.3 Radio Paging Service ProvidersThe Radio Paging Service Providers (RPSP) shall be permitted to provide paging services within their service area of operation. Direct interconnectivity between licenced RPSPs and any other type of service provider in their area of operation including sharing of infrastructure shall be permitted. Interconnectivity between service providers in different service areas shall be reviewed in consultation with TRAI and the same would be announced by August 15, 1999 as a part of the structure for opening up of national long distance. The RPSP shall be granted separate licence, on a non-exclusive basis, for each service area of operation. Licences would be awarded for an initial period of twenty years and will be extended by additional periods of ten years thereafter. For this purpose, the service areas would be categorized as per the existing structure. The RPSP shall be eligible to obtain licences for any number of service areas. Availability of adequate radio frequency spectrum is essential not only for providing optimal bandwidth to every operator but also for entry of additional operators. It is proposed to review the spectrum utilisation from time to time keeping in view the emerging scenario of spectrum availability, optimal use of spectrum, requirements of market, competition and other interest of public. The entry of more operators in a service area shall be based on the recommendation of the TRAI who would review this as required and no later than every two years. The radio paging licencees shall pay a one time entry fee. The basis for determining the entry fee and the basis for selection of additional operators will be recommended by the TRAI. All radio paging licencees shall pay licence fee as a revenue share. It is proposed that the appropriate level of entry fee and percentage of revenue share for different service areas of operation will be recommended by TRAI in a time-bound manner, keeping in view the objectives of the New Telecom Policy. Further, TRAI may also examine and recommend the revenue sharing arrangements between RPSP and other access providers, subject to technical feasibility. 3.4 Public Mobile Radio Trunking Service Providers The Public Mobile Radio Trunking Service Providers (PMRTSP) shall be permitted to provide mobile radio trunking services within their service area of operation. Direct interconnectivity between licenced PMRTSP's and any other type of service provider in their area of operation shall be permitted after examining the legal implications in view of the CMSP licences The PMRTSP shall be granted separate licence, on a non-exclusive basis, for each service area of operation. Licences would be awarded for an initial period of twenty years and will be extended by additional periods of ten years thereafter. For this purpose, the service areas would be categorized as per the existing structure. The PMRTSP shall be eligible to obtain licences for any number of service areas. PMRTSP licencees would be required to pay a one time entry fee. The basis for determining the entry fee and the basis for selection of additional operators will be recommended by the TRAI. Apart from the one time entry fee, PMRTSP licencees would also be required to pay licence fee based on a revenue share. It is proposed that the appropriate level of entry fee and percentage of revenue share arrangement for different service areas would be recommended by TRAI in a time-bound manner keeping in view the objectives of the New Telecom Policy. 3.5 National Long Distance Operator National long distance service beyond service area to the private operators will be opened for competition with effect from January 1, 2000. To promote setting up long distance bandwidth capacity in the country, provide a choice to consumers and promote competition, all NLDOs should be able to access subscribers. With a view to achieve the above, all access providers shall be mandatorily required to provide interconnection to the NLDOs resulting in choice for subscribers to make long distance calls through any operator. For this purpose, the terms and conditions and other modalities would be worked out in consultation with TRAI and the same will be announced by August 15, 1999. The terms and conditions would also specify the number of operators, licence conditions on revenue sharing basis and other related issues. Usage of tile existing backbone network of public and private power transmission companies / Railways / GAIL, ONGC etc. shall be allowed immediately for national long distance data communication and from January 1, 2000 for national long distance voice communications. Resale would be permitted for domestic telephony, announcement for the modalities thereof to be announced alongwith the opening up of national long distance by August 15, 1999. Resale on international long distance will not be permitted till the year 2004. 3.6 International Long Distance Services The subject of opening up of international telephony service to competition will be reviewed by the year 2004. 3.7 Other Service 3.9.1 VSAT Service Providers The VSAT Service Providers shall be granted separate licence, on a non-exclusive basis for an initial period of twenty years and will be extended by additional periods of ten years thereafter. Interconnectivity between service providers in different service areas shall be reviewed in consultation with TRAI and the same would be announced as a part of the structure for opening up national long distance by August 15, 1999. The VSAT service providers shall be granted separate licence, on a non-exclusive basis. Licences would be awarded for an initial period of twenty years and will be extended by additional periods of ten years thereafter. VSAT licencees would be required to pay a one time entry fee. The basis for determining the entry fee and the basis for selection of additional operators will be recommended by the TRAI. Apart from the one time entry fee, VSAT licences would also be required to pay licence fee based on a revenue share. It is proposed that the appropriate level of entry fee and percentage of revenue share arrangement would be recommended by TRAI in a time-bound manner, keeping in view the objectives of the New Telecom Policy. 3.10 Electronic Commerce On line Electronic Commerce will be encouraged so that information can be passed seamlessly. The requirement to develop adequate bandwidth of the order of 10 Gb on national routes and even terabytes on certain congested important national routes will be immediately addressed to so that growth of IT as well as electronic commerce will not be hampered. 3. 11. Resolution of problems of existing operators The New Policy Framework which seeks to significantly redefine the competitive nature of industry, would be applicable to new licensees. There are, however, multiple licences that have been issued by the Government for cellular mobile services, basic services, radio paging services, internet services etc. It is the Government's intention to satisfactorily resolve the problems being faced by existing operators in a manner which is consistent with their contractual obligations and is legally tenable, [Top] World-wide, the incumbent, usually the Government owned operator plays a major role in the development of the telecom sector. In India, DoT is responsible for the impressive growth in number of lines from 58.1 lakhs on April 1, 1992 to 191 lakhs in December 1998, showing CAGR of' 20%. DoT is expected to continue to play in importnat, and indeed, dominant role in the development of the sector. Currently, the licensing, policy making and the service provision functions are under a single authority. The Government has decided to separate the policy and licensing functions of DoT from the service provision functions as a precursor to corporatisation. The corporatisation of DoT shall be done keeping in mind the interests of all stakeholders by the year 2001. All the future relationship (competition, resource raising etc.) of MTNL / VSNL with the corporatised DoT would be based on best commercial principles. The synergy of MTNL, VSNL and the corporatised DoT would be utilised to open up new vistas for operations in other countries. [Top] With the proliferation of new technologies and the growing demand for telecommunication services, the demand on spectrum has increased manifold. It is therefore, essential that spectrum be utilised efficiently, economically, rationally and optimally. There is a need for a transparent process of allocation of frequency spectrum for use by a service and making it available to various users under specific conditions. The National Frequency Allocation Plan (NFAP) was last established in 1981, and has been modified from time to time since. With the proliferation of new technologies it is essential to revise the NFAP in its entirety so that it could become the basis for development, manufacturing and spectrum utilization activities in the country amongst all users. The NFAP is presently under review and the revised NFAP-2000 would be made public by the end of 1999, detailing information regarding allocation of frequency bands for various services, without including security information. NFAP shall be reviewed no later than every two years and shall be in line with radio regulations of International Telecommunication Union. Relocation of existing Spectrum and Compensation:
There is a need to have a transparent process of allocation of frequency spectrum which is effective and efficient. This would be examined further in the light of ITU guidelines. For the present, the following course of action shall be adopted.
6.0 Universal service obligation The Government is committed to provide access to all people for basic telecom services at affordable and reasonable prices. The Government seeks to achieve the following universal service objectives:
The resources for meeting the USO would be raised through a 'universal access levy' which would be a percentage of the revenue earned by all the operators under various licences. The percentage of revenue share towards universal access levy would be decided by the Government in consultation with TRAI. The implementation of the USO obligation for rural / remote areas would be undertaken by all fixed service providers who shall be reimbursed from the funds from the universal' access levy. Other service providers shall also be encouraged to participate in USO provision subject to technical feasibility and shall be reimbursed from the funds from the universal access levy. [Top] The Telecom Regulatory Authority of India (TRAI) was formed in January 1997 with a view to provide an effective regulatory framework and adequate safeguards to ensure fair competition and protection of consumer interests. The Government is committed to a strong and independent regulator with comprehensive powers and clear authority to effectively perform its functions. Towards this objective the following approach will be adopted:
8.1 Standardisation To enable the establishment of an integrated telecommunication network,
common standards with regard to equipment and services would be specified
by the Telecom Engineering Centre (TEC). TEC would also continue to grant
interconnect and interface approvals for various service providers. Courtesy: Telecom Regulatory Authority of India. Website: http://www.trai.gov.in
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