After nearly a year of deliberations, consultations and discussions, the government, on May 1, 2018, released the draft of the National Digital Communications Policy, 2018. The emphasis on digital communications is an acknowledgement of the fact that future growth is going to come from applications and services based on technologies such as internet of things, automation and artificial intelligence.
The key objectives of the draft policy are to attract $100 billion in investments into the sector, ensure broadband speeds of 50 Mbps for every citizen and create 4 million new jobs by 2022. Further, through this policy, the government plans to optimally price spectrum, and review levies such as licence fees and spectrum usage charges as well as the M&A rules to ease exits, while also taking a fresh look at the spectrum sharing, leasing and trading guidelines.
If the policy actually delivers on these promises, it will not only ease the telecom industry’s financial stress but also aid India’s communications sector in being at the forefront of the digital revolution. Spectrum prices in India are among the highest in the world and an explicit move away from revenue maximisation will inspire confidence in the industry for the timely roll-out of 5G services, giving Indian players a chance to tap this opportunity alongside their global competitors.
Is the policy likely to deliver on its promise? Given the current state of the telecom sector, which is saddled with massive debt and struggling to tackle the issue of poor quality of services, it is surely not going to be an easy task. In fact, the draft policy has left both the operators and the telecom infrastructure providers discontented.
In the current scenario, when the cash-strapped industry is finding it difficult to invest more than $10 billion per annum, the policy talks of attracting $100 billion over another four years, which is a bit off the mark. Other goals, like 50 per cent of households to have access to fixed line broadband, sound good on paper but serve no real purpose since delivering data on mobile phones has proven to be far more successful. Moreover, laying out cable networks has been the biggest challenge for the telecom industry due to right-of-way constraints. Further, the draft policy talks of catalysing investments by “reviewing levies and fees including licence fee, USO Fund, and rationalising spectrum usage charges to reflect the costs of regulation and administration of spectrum”. But there is no mention of the exact amount of levy reduction, if there is any.
In sum, the draft policy is more of a broad roadmap for the sector. The key would be to take constructive inputs from the industry and iron out the creases to create an effective implementation framework.
