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DAILY NEWS ANALYSIS

  • 08 August, 2022

  • 9 Min Read

Governing Telecommunication in India

Governing Telecommunication in India

The Ministry of Communication, Department of Telecommunications (DoT) recently issued an invitation for comments regarding the requirement to update the legal framework governing the telecom sector.

It also published a consultation document in which it advocated for the creation of a new legal framework that is precise, understandable, and responsive to the development of new technologies and social norms.

Need for a New Framework

  • Long before India gained independence, regulations were passed that established the legal framework for telecommunications in that country.
  • Since the Indian Telegraph Act took effect on October 1, 1885, technology has made significant strides in recent years. As a result, the stakeholders have been calling for the legal system to evolve in order to keep up with rapidly developing technology.

What are the Suggestions?

Collaborative Regulation:

  • To create a new legal framework that permits liberalised and objective use of the spectrum.
  • Additionally, ensure the central authorities' flexibility regarding spectrum usage for the public interest.

Reframe and Harmonize Frequency Range:

  • The law must include clauses that call for a reframe and a harmonisation of the frequency range.
  • The framework for mergers, demergers, and acquisitions, as well as for all sorts of restructuring, should be made more simpler.
  • To achieve a key balance between preserving public interests and service continuity.

Enhance Security:

  • Must contain pertinent provisions for dealing with public emergencies, public security, and for taking actions in the interests of overall national security.

Continuity of Service:

  • If there are problems with insolvency in the telecom industry, this should be the main concern.
  • As long as the services are still being offered and there is no default in the payment of fees associated with the telecom licence or the usage of spectrum, the procedures shouldn't result in the licence being suspended.

What is the current state of the Indian telecom industry?

  • Infrastructure, Equipment, Mobile Virtual Network Operators, White Space Spectrum, 5G, Telephone service providers, and Broadband are the subsectors that make up the telecommunications sector.
  • As of April 2022, India's telecom sector had 1.17 billion subscribers, making it the second largest in the world.
  • The rural market's teledensity, which is mostly untapped, is 58.16 percent, whereas the urban market's teledensity is 134.70 percent.
  • The third-largest industry in terms of FDI inflows, the telecom sector supports 2.2 million jobs directly and indirectly and accounts for 7% of all FDI inflows.
  • The amount of FDI entering the telecom sector between 2014 and 2021 increased by 150% to $20.72 billion from $8.32 billion between 2002 and 2014.

Challenges

  • Declining Average Revenue Per User (ARPU): With plummeting earnings and, in some cases, significant losses, ARPU is currently declining sharply and steadily, which is forcing the Indian telecom industry to consider consolidation as the only way to increase revenues.
  • Lack of Telecom Infrastructure in Semi-Rural and Rural Areas: Entering Semi-Rural and Rural Areas requires Service Providers to Pay Huge Initial Fixed Costs.
  • Competition Heats Up, Pressuring Margin: Following Reliance Jio's Entry, other telecom operators are feeling the heat of a considerable decline in tariff rates for both voice calls and data (more significant for data subscribers).

Government Initiatives

  • In accordance with the National e-Government Plan, the Department of Information Technology plans to establish more than 1 million Common Service Centers around India with internet access.
  • The FDI cap in the telecom sector has been raised from 74% to 100%. Out of 100 percent, 49 percent will be completed automatically, and the remaining 100 percent will be completed with approval from the Foreign Investment Facilitation Portal (FIPB).
  • Infrastructure service firms that deliver dark fibre, email, and voicemail are allowed up to 100% FDI.
  • The Union Cabinet approved several structural and procedural improvements in the telecom industry in 2021.

Way forward

  • Given the enormous prospects the telecom sector offers, a proactive and facilitative government engagement is urgently needed.
  • The Telecom Regulatory Authority of India (TRAI), an independent and statutory organization, has a crucial job to do that is monitor the industry.
  • The TDSAT (Telecom Disputes Settlement and Appellate Tribunal) must take a more aggressive and prompt approach to dispute resolution.
  • The new regulatory legislation must include pertinent clauses on how to take action in emergency situations to guarantee public safety and national security.

Source: PIB


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