The telecom industry, which has been under financial constraint, may get some relief as the government plans to rationalise various levies being imposed on the service providers.

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With a focus on 'broadband for all', the Cabinet on Wednesday approved the new telecom policy -- National Digital Communications Policy (NDCP) 2018-- as the country moves towards next evolution in technologies.

"Emerging technologies like 5G, artificial intelligence, machine-to-machine communications and Internet of Things (IoT) called for a new consumer- and application-centric policy. The government aims to improve the reach of telecom services and applications riding on the network," Telecom minister Manoj Sinha said after the Cabinet approval.

The policy lists out targets for the next five years, he said, adding, all the modalities will be decided within a year.

The telecom department plans to reform the licensing and regulatory regime to catalyse investments and innovation. Besides promoting ease of doing business, a review of levies and fees, including license fee, spectrum usage charges, and the definition of adjusted gross revenue (AGR) and rationalisation of universal service levy will be done. There is also a plan to rationalise license fees on fixed line revenues to incentivise digital communications.

Harsh Walia, associate partner, Khaitan & Co, says the framework seems to suggest that Department of Telecommunications (DoT) is looking to revamp its image of a revenue-monger to a business-facilitator as charges, taxes and levies may be rationalised. "In particular, spectrum usage charges may now only reflect administrative costs. This will be a breath of fresh air for the industry, whenever implemented."

Rajan S Mathews, director general, Cellular Operators Association of India (COAI), said the most important and urgent requirement is to restore the financial health of the sector for which the policy document envisages the reduction in levies and ease of doing business. This will help the industry in achieving the goals and fulfilling the objectives outlined in the policy.

The policy also aims to recognise telecommunication services and infrastructure as an essential public utility. "This will not only aid proliferation of telecom services but also facilitate low-cost financing. The industry today is facing one of its toughest phases, and low-cost financing is the need of the hour for most service providers who are languishing in debt and unprecedented losses," Walia said.

The reduction/rationalisation of levies has been a long-standing demand of the telecom industry which has gained ground since last few years as the financial health of the operators declined following the entry of new player Reliance Jio in the sector. Since then, the mobile tariffs have plummeted putting pressure on profits and margins of the telecom players. The industry has been sitting on a cumulative debt of around Rs 5.6 lakh crore.

Apart from this, the other key objectives of the policy include creating four million additional jobs in the digital communications sector, providing universal broadband connectivity at 50Mbps and 1 Gbps connectivity to all Gram Panchayats of India by 2020; 10 Gbps by 2022. It aims to attract investment of $100 billion in the sector and expand IoT ecosystem to 5 billion connected devices

Currently, India has been ranked at 134 in the Information and Communication Technology (ICT) Development Index of International Telecommunication Union (ITU). The policy says it will propel India to top 50 nations in this index in next five years.

Telecom Commission, the highest policy making body of the department of telecommunications, has also been renamed as "Digital Communications Commission."

RELIEF TO TELCOS

  • It aims for universal broadband connectivity at 50Mbps by 2020  
  • Telecom Commission has also been renamed to Digital Communications Commission

Source: DNA Money