New telecom policy puts roaming to rest

Extra charges to end in single-licence regime; operators can share, trade spectrum; infra status for telcos; stocks rise.

Consumers will not have to pay roaming charges and mobile number portability will be available nationwide under a new telecom policy draft released by communications minister Kapil Sibal on Monday.

The policy envisages a ‘one nation-one licence’ regime: companies will not have to apply for separate licences in every circle/service area and users will not have to pay roaming charges. A single licence will do across all the 22 service areas in the country.

The policy will allow mobile operators to share, pool and trade spectrum. Spectrum will, in fact, be delinked from licences in future and priced at market value. In the existing policy, start-up spectrum of 4.4 MHz is bundled with the licence.

The department of telecommunications (DoT) will unveil an exit policy for operators. It has been referred to the Telecom Regulatory Authority of India (Trai) for formulation. That should aid consolidation in the industry, which has 12-13 players in each circle. DoT will also seek Trai recommendations on the new licensing framework and migration of licences. An additional 300 MHz of spectrum will be made available by 2017 and another 200 MHz by 2020. The telecom sector will get infrastructure status under the new policy.
“We’ll ensure adequate availability of spectrum and its allocation in a transparent manner through market-related processes. We’ll prepare a road map for the availability of additional spectrum every five years,” Sibal said.
The minister ruled out the auction of broadband wireless access spectrum in the current fiscal. “We’ll audit spectrum and its use,” he said. “In achieving the goals of the national telecom policy 2011, revenue generation will play a secondary role. Our vision is to have broadband on demand.”
DoT had started work on the new telecom policy - 2011 in January in the wake of the 2G spectrum allocation controversy. Former telecom minister A Raja and officials of various companies are in judicial custody in connection with that. Operators battling intense competition and low tariffs will be hit by the end of roaming charges. According to industry estimates, roaming charges account for eight per cent of telecom players’ revenues.
“There will only be a short-term impact on revenues because of no roaming charges. But, it will definitely increase the usage of services, voice or data,” said KPMG’s Romal Shetty.
Bharti Airtel stocks closed 2.38 per cent higher at Rs 363.25 on the Bombay Stock Exchange on Monday. Idea closed 2.33 per cent higher at Rs 92.40 while Reliance Communications was up 1.72 per cent at Rs 74.05.
Cellular Operators Association of India director general Rajan Mathews said, “The draft policy has given clarity and a direction to the industry. But, details will have to be worked out. On the abolishment of roaming charges, how the existing licensees will be able to make their licenses pan-India, the new numbering plan, how the networks will be configured — all these issues will have to be sorted out before any plan.”
The policy aims to provide on-demand broadband for all citizens and increase rural teledensity to 100 per cent by 2020 and 60 per cent by 2017 (it is 35 per cent at present). There will be focus on the convergence of TV, internet and internet services. Broadband download speed will be revised to 512 kbps from 256 kbps currently. The policy also aims to make India a hub for telecom equipment manufacturing.
Reacting to the policy draft, Bharti Airtel said in a statement, “It signals the government’s focus on future growth areas such as broadband and convergence. Infrastructure status for the sector and rationalisation of taxes and levies will provide relief.” “The policy will take the country into the next stage of inclusive growth. We’ll actively participate in the government’s consultative process with various stakeholders,” said a statement by Idea Cellular.