Why is the govt preparing a new telecom policy?
Why do we need a new communications policy?
The country now has the world’s second-largest subscriber base and is experiencing technical changes in digital communications. With the advent of 5G, artificial intelligence, and Internet things, India needs a close vision on how to use these digital tools for the growth and development of the country and what laws should be drafted or modified. Moreover, given the nature of the capital-intensive sector, the ease of doing business needs to be improved to attract investment.
What are the policy objectives?
On 1 May, DoT launched a policy project to attract $ 100 billion in digital communications. DoT plans to send it to the Council of Ministers within four weeks. The policy objectives include broadband for all, focusing on fiber-to-home connections, creating 4 million digital communications jobs and increasing the share of digital communications in India’s GDP to 8% from less than 6% in 2017.
The government also aims to enable the convergence of architecture Infrastructure for the ICT and broadcasting sectors.
How will it affect the economy?
The consumption of mobile data in India is already the highest in the world. According to the current pace of digitization, India’s digital economy is estimated to reach $ 1 trillion by 2025. It is also estimated that a 10% increase in broadband penetration can lead to an increase in GDP by more than 1%. Currently, India has approximately 1.5 million kilometers of fiber optic cable, and less than a quarter of towers are connected to fiber.
The Government plans to grant fiber optic cables the state of public utilities and promote models of cooperation that include government and local authorities and the private sector.
What are the main challenges?
The industry believes that raising $ 100 billion is not easy because local banks do not lend to telecoms companies, and industry revenues have been hit after Reliance Jio entered into a tariff cut. The government is aware of the psychological pressure.
The sector needs huge investments but investor confidence is low. It remains to be seen whether the government can reduce the fees imposed on this sector.
What can telecom operators expect?
The draft policy stipulates that the government will review fees and fees, including license fees, universal service tax rates and the concept of revenue in line with the principles of the input line credit, with the exception of rationalization of spectrum usage fees.
The government also aims to establish a comprehensive digital data protection system that ensures privacy, independence, and individual choice.