Strategic Plan Document for Department of Telecom,
Government of India
1.0
Introduction
The telecom sector is one of the major drivers of the growth of the
Indian economy. It is the fastest growing telecom sector in the
world with more than 15 million subscribers being added every
month to the subscriber base of 650 million. Today India has more
than 600 million wireless subscribers in about 150 state-of- the- art
networks. Rollout of services has taken place in 8000 towns and
cities and over 500,000 villages and there are about 10 mobile
operators in each circle. The auction of 3G/BWA spectrum in June
2010 has opened the gates for the availability of the latest
technology and innovations for Indian consumers at the lowest
prices in the world. The total teledensity is now 60% and the
telecom sector revenues have touched a whopping Rs 150,000
crore and are growing. And all these are the achievements only of
the last 5 years!
Although, the progress of the past few years has been spectacular,
there are several areas of deficit and concern for which a well
thought out strategy has to be evolved for the development of this
sector. This strategy paper is an attempt in this direction.
2.0 Vision, Mission, Objectives and Functions
Vision, Mission, Objectives and Functions of the Department of
telecom (DoT), as mentioned in the Results Framework Document
(RFD) of DoT, are as under:
2.1
2.1.1
Vision:
To provide to the people of India, reliable and
affordable tele-connectivity capable of delivering teleservices anytime, anywhere.
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Strategic Plan Document for Department of Telecom,
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2.2
Mission:
2.2.1
2.2.5
To develop a strong, vibrant and state-of-the-art
telecommunication network.
Promote Research and Development for India-specific
applications and for developing cutting edge
technologies.
To provide seamless access to info-highways across the
country and in particular rural and remote areas.
To create knowledge based society through
proliferation of broad band facilities in every part of the
country.
Make India a global hub, for telecom manufacturing.
2.3
Objectives:
2.3.1
To facilitate coherent growth of telecommunications by
formulating revised policy in the following areas:
2.3.1.1
2.3.1.2
2.3.1.5
Optimum utilization of scarce spectrum resource
Policy to guard against malwares, spywares, trapdoors
and ensuring security in telecom networks and
measures to deal with cyber warfare
Grant of licences including rationalizing licence fee
structure
Merger and acquisition including rationalizing usage
charges
Convergence of IT, Broadcasting and Telecom
2.3.2
Enhancing Spectrum availability for commercial use
2.2.2
2.2.3
2.2.4
2.3.1.3
2.3.1.4
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Strategic Plan Document for Department of Telecom,
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2.3.3
2.3.4
Rapid expansion of Telecom infrastructure for Voice,
Data & Broadband with special emphasis on rural and
remote areas
Developing consumer grievances redressal mechanism
2.3.5
Promoting R&D and manufacturing of telecom related
equipment
2.3.6
Migration of network from Ipv 4 to Ipv 6
2.4
Functions:
2.4.1
Policy, Licensing and coordination matters relating to
Telegraphs, Telephones, Wireless, Data, Fascimile,
Telematic services and other like forms of
communications
Promotion of standardization, research and
development in telecommunications
Promotion of private investment in telecommunications
Financial assistance for the furtherance of research and
study in telecommunication technology and for building
up adequately trained manpower for telecom
programme including assistance to institutions and to
universities for advance scientific study and research
2.4.2
2.4.3
2.4.4
The objectives of the DoT listed above include
convergence of IT, Telecom and Broadcasting. Due to
the convergence of voice, data and video and with next
generation networks being converged this would be a
worthwhile reform. Apart from other obvious and not
so obvious benefits, it would also facilitate the vacation
of 700 MHz ‘digital dividend’ spectrum for commercial
use. However, this is an extremely ambitious and
difficult to implement reform and a bill for convergence
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Strategic Plan Document for Department of Telecom,
Government of India
introduced in Parliament some years ago lapsed as it
could not get support. We have therefore not included
this in the objectives of the Strategic Plan meant for
next 5 years, though a few good ideas of the
convergence bill like a licence without spectrum have
been included in the proposed strategy.
3.0
Stakeholder Consultation
The Department of Telecom (DoT) is responsible for facilitating
various activities for the growth and expansion of the telecom
sector. In doing so it has to ensure that the interests of various
stake holders like telecom operators, equipment manufacturers,
government and above all, the consumers, are safeguarded. While
defining its role, the first requirement for DOT is to understand the
needs of the main stake holders. An effort was made to obtain
inputs from them formally and these are summarized below:
3.1 Telecom Operators: Telecom Operators are of the view that
the DoT should go beyond tele-density and look at the country’s
requirement of vital telecom infrastructure and its most efficient
utilization. There is a need to come out with a comprehensive
telecom policy focusing on reforming the licensing framework
with service and technology neutrality and separation of licensing
and spectrum. They also want uniform rates of license fees in
different circles, a simplified regime of annual spectrum charges
and a market determined and transparent system of allocation and
pricing of spectrum. Operators also want proactive efforts for
release of more spectrum for the rapidly growing commercial
telecom services which by 2014 will require more than 300MHz of
spectrum. They also want an aggressive use of the USOF for
creating shared telecom infrastructure in rural areas and powering
it by subsidized solar power for reducing operating expenses and
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Strategic Plan Document for Department of Telecom,
Government of India
thus increasing the viability of rural operations. Simple subscriber
verification norms, a forum for addressing security concerns and
promotion of mobile commerce are also priorities listed by them.
3.2 Equipment Manufacturers: Equipment manufacturers want a
long term and stable security regime based on international best
practices for testing and clearance of imported telecom equipment
being inducted into networks. They also want incentives to be
provided to telecom operators who induct domestically
manufactured equipment.
3.3 Government: Government would like the growth in telecom
services to continue with special emphasis on rural teledensity and
broadband. It would also want an orderly expansion of the
networks with efficient utilization of scarce spectrum and sharing
of highly capital intensive infrastructure. Continuing growth of
revenues and low tariffs and wide choice of providers to customers
is also part of Government objectives.
3.4 Consumers: Consumers want a variety of voice, data and
video services, latest technologies at low tariffs, high quality of
services along with a simple and quick system of redressal of
complaints. Easy and cheap system of switching from one provider
to the other to enforce accountability is also highly desired.
On the basis of the needs identified and the situation analysis an
effort is made to identify the key challenges being faced by the
sector and suggest various strategies for maximizing the benefits
for the sector.
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Strategic Plan Document for Department of Telecom,
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4.0
Assessment of the Situation & Key Challenges Facing the
Telecom Sector
4.1
India has witnessed a tremendous growth in the telecom
sector in the last decade. This has been possible due to advances in
technology, regulatory reforms, policy changes introduced by the
Government and the dynamism of the private sector in a fiercely
competitive environment. This has led to more than 650 million
telephone connections and the lowest tariffs in the world.
However, rural tele-density is still very low, there are less than 11
million broadband connections, and about 40% of the country does
not have wireless coverage.
4.2
The industry suffers from a huge regulatory risk due to
uncertainty in licensing and spectrum policy, lack of domestic
manufacturing and lost opportunities in fulfilling the universal
service obligation. The huge scam in 2G spectrum allocation has
shaken the stakeholders’ confidence in the system of governance in
the DoT. Though to a certain extent the spectacular 3G auctions
have redeemed the reputation of the Government, a number of
challenges need to be addressed through a variety of reforms. All
this requires a cogent strategy and a 5 year strategic plan which
lays out the policy and reform roadmap to maximize the benefits
for various stakeholders and chart an orderly growth path for the
sector.
5.0
Strengths, Weaknesses, Opportunities and Threats
(SWOT) Analysis
The major strengths, weaknesses, opportunities and threats
faced by the Indian telecom sector are the following:-
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Strategic Plan Document for Department of Telecom,
Government of India
5.1
Strengths
 huge growth in the number of telephone connections in
the last 5 years.
 foreign investment and latest technology available
along with huge private sector investment.
 low cost of operations due to economies of scale
resulting in the lowest tariffs in the world.
 competition in every part of the country leading to low
tariffs and a variety of packages for the consumer.
 policy of infrastructure sharing leading to cost sharing
and better viability.
 successful model of 3G spectrum auction for large scale
implementation.
5.2
Weaknesses
 more than six operators (six being the optimum
number) in each circle leading to fragmentation of
spectrum and its sub-optimal utilization.
 large and increasing rural-urban divide in tele-density
 slow broadband growth and almost no high speed
broadband available in rural areas.
 high regulatory risk due to frequent changes of views
and delays in decision making by the regulator and
government.
 poor governance often leading to non-transparent and
controversial implementation of policies.
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Strategic Plan Document for Department of Telecom,
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5.3
Opportunities
 possibility of initiating reforms relating to licensing,
spectrum management, license fees etc.
 utilizing the huge corpus of USO Fund for creation of
telecom infrastructure in rural and remote areas.
 rapid expansion of high speed broad band connectivity,
including in rural areas.
 laying out a country wide network of Optical Fibre
Cable (OFC) and sharing with operators to provide
backhaul and high volume connectivity.
 making available internet telephony for cheap
international calls, Mobile Virtual Network Operators
(MVNO) for bulk services for niche customers, mobile
banking for financial inclusion, mobile number
portability for changing the operator without changing
the number, and other innovations for better, more
varied and less costly services for consumers.
5.4
Threats
 delay in decisions in licensing and spectrum
management reforms leading to uncertainty.
 non-release of spectrum from users like Defence, Space
and Broadcasting resulting in shortage of spectrum for
commercial services beyond 2014.
 sickness of BSNL (and MTNL) resulting in industrial
unrest and erosion of value of government equity.
 non-development of local telecom equipment
manufacturing, leading to over dependence on foreign
suppliers.
 increasing attacks on telecom networks, leading to
security concerns.
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Strategic Plan Document for Department of Telecom,
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6.0
Outline of the Strategy
The future thrust of policy in the telecom sector has to be on
raising its competitiveness to make it a world leader. In view of
the situational analysis and the identified needs of the key
stakeholders, the following policy options are proposed for
achieving the long term goals and objectives of the DoT:
6.1
Spectrum Availability, Management and Policy
The rapid growth of the wireless telecom network with more
than 650 million connections has resulted in scarcity of
spectrum with operators, resulting in call drops coming in the
way of providing top quality services. Further, the issue of a
large number of new licences and allocation of spectrum to
them in 2008, has resulted in spectrum fragmentation and its
consequent inefficient utilization, since a compact 10 MHz
block of spectrum can support about four times the number of
users as a 5 MHz block. This has made the task of identifying
and making available fresh spectrum for commercial use
absolutely urgent. In addition, the controversy associated with
spectrum allocation and pricing in the recent past makes it
imperative that a transparent policy and mechanism be created
which optimizes spectral efficiency while ensuring a level
playing field amongst different players and technologies. The
recent TRAI recommendations which are available with the
DoT provide an opportunity for addressing this vexed issue
right away. Some specific areas of intervention are:
6.1.1 Vacation of Spectrum: A significant amount of spectrum
should be got vacated from defence, space and broadcasting
for commercial use. An early switch to digital broadcasting,
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Strategic Plan Document for Department of Telecom,
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which requires much less spectrum, can make valuable
spectrum available for commercial use. This spectrum,
referred to as the ‘digital dividend’ in the 700 MHz band,
could be used for providing affordable mobile broadband
throughout the country.
6.1.2 Disclosure of spectrum availability: The overall availability
of spectrum along with anticipated release should be put in
the public domain, along with the definition of defence and
space bands.
6.1.3 Auction of spectrum: A market based approach through
auction should be followed for the allocation of spectrum
amongst different operators. Further, the spectrum should be
auctioned for 20 years at a time and at the time of renewal the
entity holding the spectrum should have the right of first
refusal.
6.1.4 Flat rate for Spectrum: Once spectrum is allotted at the
market price, spectrum user charges should be pegged at a
flat rate to provide a level paying field and facilitate merger
and acquisition of spectrum.
6.1.5 Charges for excess spectrum:
Operators should be
allocated contractual spectrum and those who have excess
spectrum should be appropriately charged.
6.1.6 Spectrum sharing: Opportunities for innovative spectrum
access by using innovative models of spectrum sharing,
spectrum trading and use of unlicensed spectrum bands
should be encouraged and expanded as they result in efficient
use of spectrum.
6.1.7 Incentive mechanisms: Incentive mechanisms should be
developed for more efficient use of spectrum.
6.1.8 Centre for Excellence: A centre of excellence with expertise
from government and academia be setup for study and
research of latest and advanced techniques of spectrum
management.
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Strategic Plan Document for Department of Telecom,
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6.2
Licensing Reforms
This is an area requiring urgent attention for facilitating orderly
growth of the telecom sector. Transparency in licensing norms
and procedures will promote investment and lead to
consolidation and increased efficiency. A uniform licence fee
regime across telecom circles and services is a long overdue
reform which will address issues related to level playing field
between internet service providers and telecom operators
providing internet services. It would also facilitate the
introduction of innovations like low cost internet telephony in
the Indian market. The following are recommended:
6.2.1 De-linking license and spectrum: This would provide
flexibility for transfer of spectrum between operators and
entry of players in the basic telephony space.
6.2.2 License renewal terms: Terms of license renewal need to be
clarified and notified along with charges for spectrum and
license fees. Amendments to license conditions should be
done through mutual consent.
6.2.3 Service and technology neutrality: Need for having a more
convergent licensing framework with service and technology
neutrality is essential for maintaining a level playing field.
6.2.4 Uniform rates for license fees: Across different telecom
service areas and for different service licences like Internet
Service Provider (ISP) and Universal Access Service (UAS),
uniform license fee should be levied.
6.2.5 Internet telephony and MVNO: Licences for internet
telephony and Mobile Virtual Network Operators (MVNO)
should be issued to provide their benefits to the Indian
consumer and market.
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6.3
Broadband Expansion
The growth of broadband in India has been dismal and there are
only about 11 million users at the end of 2010 against a target of
20 million. This shortfall has been due to a number of reasons,
including absence of optical fibre network and poor quality of
copper network which is limited to rural areas, unavailability of
3G/Broadband Wireless Access (BWA) technologies due to
delay in spectrum allocation for them and absence of
appropriate content, especially in local languages. As a 10%
point increase in broadband penetration is estimated to increase
GDP by 1.5%, this area requires urgent attention. The way
forward could be:
6.3.1 Broadband penetration: Broadband for all be made a
reality by increasing availability of high speed (2mbps)
broadband in all Gram Panchayats in the next 2 years.
6.3.2 Allocation of resources for broadband: Ensure sufficient
allocation of resources like spectrum, right of way
management and infrastructure sharing for broadband.
6.3.3 Cross-sectoral use of broadband: Provide incentives to
encourage the uptake of broadband in sectors like education,
healthcare, public safety, government operations, etc. by
subsidizing customer premise equipment.
6.3.4 Expansion of broadband in rural areas: Provide funding
and support to encourage the rollout of mobile broadband on
3G/BWA spectrum speedily in rural and remote areas.
6.3.5 Development of local content: USOF to provide seed
funding for development of local language content suitable
for rural consumers
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6.4
Universal Service Obligation Fund (USOF) Activities
The USOF to provide support for telecom infrastructure in rural
and remote areas is one of the finest innovations in the telecom
sector but its potential remains largely unrealized. 5% of the
adjusted gross revenue of telecom operators is collected as
USOF levy every year and retained in a non-lapsable fund. At
current level of operations an amount of Rs 6000 crore is added
annually to the USOF corpus which at present is about Rs
20,000 crore. At the same time utilization of funds has been
only to the tune of less than Rs 2,000 crore annually and that too
in providing access deficit charges to BSNL. A rapid
acceleration of USOF spending on well designed subsidy
schemes for promoting voice and broadband penetration in rural
areas is urgently called for. USOF should be metamorphosed
into an efficient organization for the design, implementation and
monitoring of large schemes of shared mobile towers and
broadband infrastructure, including optical fibre network and
consumer premises equipment. It should also take a lead role in
supporting ‘green’ telecom infrastructure by subsidizing solar
power for mobile BTSs and other installations and equipments.
As diesel consumption for power back-up is a major item of
operating expense in rural areas, this will also increase the
viability of telecom operations in rural areas and facilitate their
expansion. Some areas of intervention could be the following:
6.4.1 Autonomy for USOF: Revamp and reorganize USOF within
DoT as an autonomous unit with freedom to formulate and
implement schemes. It should be guided by a Governing
Council including experts and academicians.
6.4.2 Use of USOF for expansion of coverage: USOF should
aggressively invest the funds at its disposal to provide voice
coverage for 90% of the geographical area of the country in
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the next 3 years. The target of 90% is being suggested
keeping in mind the feasibility and practicality of
implementing it. At present the telecom coverage is about
60% of the geographical area and therefore a target of
increasing the coverage to 90% in 5 years is ambitious, yet
achievable. Further, there are large areas of the country
which are uninhabitable and constitute snow covered,
mountainous and dense forests and it would not be feasible to
expand coverage to entire country during the next 5 years.
This telecom expansion of 90% does not include the
additional areas extending into the seas or beyond borders,
where in any case, spillover mobile foot print would be
available.
6.4.3 Incentives for speedy implementation: It should develop
enabling subsidy schemes rather than elimination schemes to
encourage operators to develop telecom infrastructure in
areas where it may otherwise not make business sense. The
schemes should be more effective and speed up
implementation by adopting a system that provides a
minimum subsidy below the benchmark cost and additional
incentives for early completion.
6.4.4 Special schemes for J&K and NER: In the next year
specific schemes need to be floated for wireless broadband,
fibre based backhaul, alternate energy, technology
development and for mobile and broadband penetration in
J&K and the NER.
6.4.5 Appointment of Advisor: Engage an independent agency to
design the bidding/auction process for its schemes.
6.4.6 Support for use of Solar energy: USOF should provide
subsidy to service providers to deploy solar energy for
powering rural BTSs and charging units.
6.4.7 OFC connectivity to all Gram Panchayats: Fund and
implement a project for providing OFC connectivity to all
Gram Panchayats within a period of 2 years.
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6.5
BSNL
BSNL is hurtling towards sickness at a feverish pace. Many
years of lack of accountability and mismanagement coupled
with an extremely competitive environment has hurt both its top
line and bottom line. The continuing loss of its core wireline
business and the huge burden of employee cost which today is
40% of its revenues (compared to 5-7% for competitors) has
further accelerated its decline. While there are no strategic
reasons for supporting BSNL, BSNL is a valuable asset owned
by Government and if it is turned around it will fetch much
greater value for Government than at present when it is staring
at sickness. Further, BSNL still possesses assets and core
competencies, which if effectively leveraged, can turn it around.
But time is fast running out and the main challenge is to
restructure its business and fix its governance before it
collapses. Possible measures for resuscitation include:
6.5.1 Autonomy for management: Insulate BSNL from
ministerial interference by separating the posts of Chairman
and MD and bringing in an eminent person from the private
sector as Chairman and an able manager as MD.
6.5.2 Restructuring of BSNL: Carve out an infrastructure
company from BSNL and transfer all BSNL’s optical fibre
assets and excess staff to this company to make BSNL a
lean, right sized telecom company with staff costs as per
sector benchmarks. BSNL assets should be leveraged to
generate resources for strengthening BSNL mobile network.
The infrastructure company would implement, own and share
all BSNL fibre assets and be funded by the USOF.
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6.5.3 Merger of BSNL and MTNL: Merge BSNL and MTNL as
they have complementary operations and can combine their
strengths for synergies.
6.5.4 Focus on core competencies: Focus on enterprise business,
services to government and public sector, value added
services and new technologies like 3G where BSNL has a
comparative advantage.
6.5.5 Sale of MTNL spectrum: Allow MTNL to sell its unused
BWA spectrum in Mumbai and Delhi.
6.5.6 Listing of BSNL: After improvement of performance, BSNL
should go in for IPO and listing on the stock exchange for
better disclosure and accountability.
6.5.7 Absorption of ITS officers : Speedily complete absorption
of ITS officers in BSNL for ensuring their accountability and
preserving the autonomy of BSNL.
6.6
Optical Fibre Infrastructure
In this age of ubiquitous connectivity, the demand for bandwidth is
exploding. The copper network we have is only in cities and not of
the quality that can support broadband over distances of more than
a few kilometers. In order to provide high speed broadband with a
minimum speed of 2mbps, it is essential to have an optical fibre
network throughout the country. Further the rapid growth in
mobile telephony has greatly increased the requirement of optical
fibre for backhaul which can no longer be supported by
microwave. While BSNL has about 6 lakh kilometers of OFC
network and other operators have a few lakh kilometers amongst
them, mostly along rail routes and along highways, there are huge
gaps outside urban pockets. Best estimates available suggest that
an additional 3.5 lakh kilometers of additional OFC would be
required to connect all Gram Panchayats and it would cost about
Rs 18,000 crore. It is therefore suggested:
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6.6.1 OFC connectivity to all Gram Panchayats: To map OFC
network of all operators and fill in gaps to connect all Gram
Panchayats and provide OFC connectivity in phases to all
250,000 Gram Panchayats to ensure high speed broadband
(2mbps) connectivity to them with last mile wireless
broadband connectivity to users within 2 years. Since laying
such extensive OFC will involve getting right of way
permissions from various local bodies, village panchayats
and other agencies it will be an arduous task. This could be
simplified greatly by fixing the OFC alignment along PMGSY
roads connecting villages. In areas where these roads are yet
to be constructed (large parts of North and East India)
trenches for OFC could be included in the road design itself
while in other parts OFC laid along completed roads.
6.6.2 Use of USOF for expansion of OFC Network: Use USOF
funds to the tune of about Rs 18,000 crore to lay this OFC
and make it available for sharing amongst all operators.
6.6.3 Management of OFC Network: Use the infrastructure
company, spun off from BSNL, for supervising construction
and management of OFC Network.
6.7
R & D and Standards
It is estimated that for every mobile telephone line that is added in
India we lose US$ 15 in royalty payments to foreign suppliers.
India has lost the race for IPRs in 2G and 3G technologies but we
have a chance for getting a few IPRs in equipment for 4G
technology. Institutions like IIT Bombay and Madras working on
these initiatives in partnership with private organizations need to
be encouraged and supported so that Indian standards get into
international specifications. This will require strong support
including the following:
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6.7.1 Telecom Centres of Excellence: Centres of Excellence, set
up in PPP mode, need to be encouraged for carrying out R &
D related to telecom.
6.7.2 R&D Fund: Create a large corpus fund for supporting R &
D. This fund should be used to perform research to address
the problems of Indian service providers and their future
requirements.
6.7.3 IPR Generation: Focus on IPR generation by Indian
organizations and pushing them into international standards
to provide a competitive advantage to domestic telecom
equipment manufacturers.
6.7.4 Development of Human Resources: Increase human capital
formation for telecom sector by supporting facilities for skills
development and training.
6.8
Promotion
of
Manufacturing
Indigenous
Telecom
Equipment
India is the second fastest growing telecom market but most of the
equipment used by operators as well as the handsets are imported
legally or through the grey market. This involves an import of
more than Rs 30,000 crore worth of equipment. In addition, these
imports result in serious security related, health and environmental
concerns. Therefore the need for creating a supportive ecosystem
for telecom equipment manufacture cannot be overemphasized.
6.8.1 Incentives for use of indigenous equipments: Use USO
Fund to subsidize operators by paying some part of the
spectrum charges when they buy Indian equipment.
Government
should
also
encourage
home-grown
technologies and subsidize local manufacturers.
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6.8.2 R&D and Testing Labs: Set up R&D and testing labs for
testing of all telecom equipments in India.
6.8.3 R&D for local needs: Support efforts to develop equipment
for India specific applications like solar mobile chargers for
use in villages without regular grid power, universal adaptors
for all brands of mobile phones and equipment with low
electromagnetic radiation levels.
6.9
Security, Surveillance and Monitoring
Advances in telecom technology has brought great benefits but has
also raised serious security concerns. Since telecom networks are
all interconnected, they can be infected with various malwares to
snoop, create denial of service situations or unleash cyber attacks.
In addition the use of telecom services by criminals and terrorists
underlines the need for having an effective system of lawful
interception and monitoring. The rapid advances in technology,
different security protocols used by different vendors and IPR
issues involved in sharing source codes for proprietary software
add to the complications. A very restrictive security regime can
deprive consumers of new products and services while a lax
system can compromise national security. Thus an ongoing
collaboration is required between the licensor and security
agencies on the one hand and vendors and operators on the other.
This can be achieved by:
6.9.1 Network Security: A forum be setup involving various
stakeholders to effectively engage in developing a practical
and efficient approach to ensure telecom network security.
6.9.2 Interception and Monitoring: An automated system of
lawful interception and monitoring be implemented, based on
international best practices, to balance security requirements
of the state and privacy of the citizens.
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6.10
Regulatory and Governance issues
The telecom sector is going through a turbulent phase due to the
non-transparent and arbitrary functioning of the DoT and the
inability of the regulator, TRAI, to come out with consistent,
timely recommendations after consultation with experts as per its
mandate. The 2G scam and the inordinate delay by TRAI in giving
its recommendations (10 months against a statutory provision of 2
months) on important licensing and spectrum issues has been
widely criticized. Their non transparent and inconsistent
functioning, inordinate delay in policy formulation and perceived
unfairness in the functioning of both the Licensor and the
Regulator is primarily responsible for ‘regulatory risk’ being
perceived as the most important factor inhibiting foreign
investment in the sector. This needs to be urgently remedied by:
6.10.1
Decisions on TRAI recommendations: Quick and
transparent decisions on various pending TRAI
recommendations related to releasing spectrum for
commercial use, its allocation and pricing.
6.10.2
Transparent Functioning: DoT and TRAI need to reinvent themselves and work in a manner that emphasizes
impartiality, transparency and non-discrimination between
operators, agencies and technologies.
6.11 Responsiveness to Consumers
While competition has ensured that the customer gets a number of
benefits like low tariffs and a variety of service plans, the quality
of services leave much to be desired. The TRAI monitors quality
by quarterly checks and consumer surveys but this has not forced
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operators to incur incremental expenditure for improving quality
and consumer dissatisfaction on this score remains high.
Mobile number portability is an intervention which enables a
consumer to change his operator without changing his telephone
number. Once this service is introduced, dissatisfied customers can
switch from one operator to another and this risk of losing
customers, experience shows, makes operators invest in providing
better service quality and more responsive customer grievance
redress. Thus the following is recommended:
6.11.1
Introduction of Mobile Number Portability: This
much delayed reform should be introduced within 6 months
to give consumers a real choice of telecom service providers.
6.11.2
Health Safety and Radiation norms for telecom
equipment and handsets: Health and safety norms need to
be evolved urgently and enforced strictly for protecting the
population from health hazards due to electro-magnetic
radiation emanating from mobile sets, towers and other
equipment.
7.0 Implementation Plan
The following Implementation Plan is proposed:
Option Policy Option
Sl. No
6.1
6.1.1
Funds
Tracking
Target
Required and
Date &
Monitoring Priority
Spectrum Availability, Management and Policy
Vacation
Spectrum
Stakeholder
Responsible
MoD, NIL
of DoT,
DoS, MoI&B
DoT,
12/2011
Telecom
Commission High
Page 21 of 33
Strategic Plan Document for Department of Telecom,
Government of India
6.1.2
6.1.3
6.1.4
6.1.5
6.1.6
6.1.7
6.1.8
Disclosure
Spectrum
availability
Auction
Spectrum
of DoT
NIL
of DoT
NIL
Flat rate for DoT
Spectrum
TRAI
Charges
for DoT,
excess spectrum and Telecom
Operators
DoT
and
Spectrum
Telecom
sharing
Operators
DoT, MoF
Incentive
mechanisms
IITs,
Centre
for DoT,
IIMs, IISc.
Excellence
NIL
NIL
DoT,
06/2012
Telecom
Commission High
(TC),
Cabinet
Sectt.
DoT, TC
06/2011
High
DoT, TC, 06/2011
MoF
High
NIL
DoT, TC
NIL
DoT,
MoF
DoT
Funds
from
USOF
6.2
Licensing Reforms
6.2.1
De-linking license DoT, TRAI
and spectrum
6.2.2
License Renewal DoT, TRAI, NIL
Operators
terms
NIL
Service
and DoT
Technology
6.2.3
(TC),
Cabinet
Sectt., PMO
DoT
12/2011
Medium
NIL
06/2011
Medium
TC, 06/2011
Medium
06/2011
Medium
DoT, TC, 06/2011
Cabinet
High
Sectt.
DoT, TC
06/2011
Medium
DoT, TC
06/2011
High
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Strategic Plan Document for Department of Telecom,
Government of India
6.2.4
6.2.5
6.3
neutrality
Uniform rates for DoT, TRAI, NIL
MoF
license fees
DoT, TRAI
NIL
Internet
telephony
and
MVNO
Broadband Expansion
6.3.1
Broadband
penetration
6.3.2
Allocation
of
resources
for
Broadband
Cross-sectoral
use of Broadband
6.3.3
6.3.4
6.3.5
Expansion
Broadband
Rural areas
Development
local content
DoT, TRAI, Funds
Railtel,
from
Powergrid,
USOF
NIC
and
Operators
DoT,
State
Governments,
Local bodies
DoT,
DIT,
MHRD,
MoHFW,
State
Governments,
Consumer
premises
equipment
manufacturers,
MoE&F
DIT,
of DoT,
in MoPR, PRIs
of DIT, MoI&B,
State
Governments,
Content
NIL
Funds
from
USOF
DoT, TC, 06/2011
MoF
High
DoT, TC
12/2011
High
DoT,
03/2013
Telecom
High
Commission
(TC),
Cabinet
Sectt., PMO
DoT, MoF 09/2011
High
DoT, TC, 12/2011
DIT,
Medium
Cabinet
Sectt.
DoT, TC, 03/2013
Cab. Sectt. High
DoT, DIT
12/2012
Medium
Page 23 of 33
Strategic Plan Document for Department of Telecom,
Government of India
6.4
6.4.1
6.4.2
6.4.3
6.4.4
6.4.5
6.4.6
6.4.7
6.5
6.5.1
6.5.2
6.5.3
Developers
Universal Service Obligation Fund (USOF) Activities
NIL
DoT, TC
Autonomy
for DoT, MoF
USOF
Funds
DoT,
Use of USOF for DoT, USOF
from
USOF, TC
expansion
of
USOF
coverage
Incentives
for DoT, USOF
speedy
implementation
DoT, TC,
Special schemes DoT, USOF,
Cabinet
for J&K and DoNER,
MHA, State
Sectt.,
NER
Governments
DoNER,
MHA
DoT, USOF
Appointment of DoT, USOF
Advisor
DoT, TC,
Support for use DoT, USOF,
MNRES,
MNES,
of Solar energy
Equipment
Cab. Sectt.,
manufacturers,
Operators
DoT, TC,
OFC connectivity DoT, USOF, Funds
from
MoPR, Cab.
to
all
Gram MoRD,
MoPR, PRIs, USOF
Sectt., PMO
Panchayats
Operators and
State
Governments
BSNL
NIL
DoT, TC
Autonomy
for DoT, DPE
management
MoF,
DoT, TC,
Restructuring of DoT,
DPE
Cab. Sectt.,
BSNL
PMO
MoF,
Merger of BSNL DoT,
06/2011
Medium
03/2013
High
06/2011
High
06/2011
Medium
03/2011
Medium
03/2012
High
03/2013
High
03/2011
High
12/2011
High
06/2012
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Strategic Plan Document for Department of Telecom,
Government of India
6.5.4
6.5.5
and MTNL
Focus on core
competencies
Sale of MTNL
spectrum
DPE
DoT, BSNL
DoT, MTNL,
MoF
6.5.6
Listing of BSNL
6.5.7
Absorption
ITS officers
6.6
6.6.1
Optical Fiber Infrastructure
OFC connectivity DoT, USOF,
to
all
Gram MoRD,
MoPR, PRIs,
Panchayats
Operators and
State
Governments
Use of USOF for DoT, USOF
expansion
of
OFC Network
Management of USOF, BSNL
Infra-structure
OFC Network
Company
6.6.2
6.6.3
6.7
6.7.1
6.7.2
Medium
DoT, BSNL 06/2011
Medium
DoT, TC, 06/2011
MTNL,
Medium
Cab. Sectt.
DoT,
06/2013
BSNL, DoD Medium
DoT, DoPT 06/2011
Medium
DoT, BSNL,
DoD, MoF
of DoT, BSNL
Funds
from
USOF
DoT,
03/2013
USOF, TC, High
MoPR, Cab.
Sectt., PMO
Funds
from
USOF
Funds
from
USOF
06/2013
High
R & D and Standards
IITs, Funds
Telecom Centres DoT,
from
of
Excellence IIMs, IISc.
USOF
(TCoE)
DoT, USOF
R&D Fund
DoT,
USOF,
BSNL
Infrastructure
Company
12/2013
Medium
DoT, TC
12/2012
Medium
06/2012
Medium
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Strategic Plan Document for Department of Telecom,
Government of India
6.7.3
IPR Generation
6.7.4
Development of DoT, TCoE
Human
Resources
Promotion of Indigenous Telecom Equipment Manufacturing
6.8
6.8.1
6.8.2
6.8.3
6.9
6.9.1
6.9.2
6.10
6.10.1
6.10.2
USOF, TCoE
03/2014
Medium
03/2015
Medium
Funds
Incentives for use DoT, USOF
from
of
indigenous
USOF
equipments
R&D and Testing DoT, USOF,
Pvt.
Labs,
Labs
TCoE
R&D for local DoT,
Equipment
needs
Manufacturers,
Telecom
Operators,
USOF,
MNES, TCoE
Security Surveillance and Monitoring
Network Security DoT, MHA,
Telecom
Interception and Operators,
NIC,
DIT,
Monitoring
Equipment
manufacturers,
LEAs
Regulatory and Governance issues
Decisions
on DoT, Telecom
Commission
TRAI
recommendations
DoT, TRAI
Transparent
DoT, TC, 06/2011
USOF
Medium
06/2012
Medium
06/2013
Medium
Budgetary DoT, MHA
Support
06/2011
High
03/2012
Medium
NIL
DoT, TC
06/2012
High
NIL
DoT, TRAI, 06/2011
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Strategic Plan Document for Department of Telecom,
Government of India
6.11
6.11.1
6.11.2
Cab. Sectt.
High
NIL
DoT, TRAI
06/2011
High
Funds
from
USOF
DoT,
MoHFW,
USOF
03/2012
High
Functioning
Responsiveness to Consumers
Introduction of
Mobile Number
Portability
Health
Safety
and
Radiation
norms
for
telecom
equipment and
handsets
DoT, TRAI,
Telecom
operators
DoT,
MoHFW,
Equipment
manufacturers,
Telecom
Operators
The Telecom Commission is expected to play an important role in
monitoring and implementation of the Strategic Plan.
8.0 Linkage between Strategic Plan and RFD
The implementation of the proposed strategic plan is broadly in
tune with the Vision, Mission, Functions and Objectives of the
DoT, as stated in its RFD. However, the strategic plan goes beyond
the scope of RFD, in view of its longer time horizon of 5 years
instead of 1 year for RFD. The revised timelines as well as the
priority levels of various policy options of the proposed strategic
plan have been brought out in the Implementation Plan, as stated
above. The RFDs of the forthcoming years may be prepared on
the basis of the proposed strategic plan.
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Strategic Plan Document for Department of Telecom,
Government of India
9.0 Cross Departmental Issues Impacting the Implementation
and Other Cross Functional Issues
Implementation of this strategy requires certain performance
requirements from other Departments. These include the
following:
9.1 Cross Departmental Issues Impacting the Implementation
Sl. Department
No
1
Defence
2
Space
3
I&B
Requirement from Consequence of NonDepartment
Performance by the
Department
Identification
of Spectrum
shortage
Defence bands and would constrain the
release of spectrum mobile broadband rollin the 800MHz, out and start impacting
1800MHz &2.1GHz the quality of services
bands
in a few years
Release of spectrum Shortage of spectrum
in the 2.3GHz band for 4G services like
super high speed data
and video streaming
Switchover
to Shortage of spectrum
digital broadcasting for mobile broadband
and
release
of services in this most
spectrum in the efficient and cost700MMHz band
effective band which
requires one-third the
capital
investment
compared to other
bands like 2.3 GHz
band
Page 28 of 33
Strategic Plan Document for Department of Telecom,
Government of India
4
5
Home
Finance
(Expenditure)
A-Develop
a
practical system for
telecom
network
security with clear
guidelines
for
requirements from
foreign
and
domestic vendors of
equipment
B- Implement a
simplified system
for
subscriber
verification
Hurdles in roll-out and
expansion of telecom
networks
C-Develop
an
automated system of
lawful interception
& monitoring
Agree
to
the
spending of USOF
money
already
available in a nonlapsable fund
Security risk and
invasion of privacy
Security risks and inconvenience
to
consumers
Delay in funding and
implementation
of
USOF schemes
9.2 Other Cross Functional Issues
9.2.1 Environmental issues – Telecom sector has emerged as one
of the biggest consumers of electricity. For a country like India,
with lakhs of villages still without regular power supply, the use of
solar energy is vital for the successful penetration of telecom in
rural and remote areas. The present usage of generators for
powering the telecom equipments and towers is not only wasteful
but also costly and environmentally hazardous. Similarly, the
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Strategic Plan Document for Department of Telecom,
Government of India
people in rural areas, living without electricity face a huge
challenge in charging their mobile phones, laptop computers etc.
thereby increasing the ‘Digital Divide’. Therefore, there is an
urgent need to develop and market solar powered handsets,
devices and equipments, to enable the people living in remote
rural areas to participate in the Telecom and IT revolution taking
place in the country and the world. Similarly, early development
and standardization of universal chargers for mobile phones
would lead to huge saving of scarce resources. A clear policy is
also needed for safe disposal of e-waste, generated due to
proliferation of new mobile handsets and their short life cycle and
quick obsolescence.
9.2.2 Social issues – Telecom infrastructure is indeed the vehicle
of IT & broadcasting also. With the convergence of phones,
computers, TV etc., this sector has become a vital instrument for
the spread of education, information, entertainment and
empowerment of masses by giving them access, information and
networking opportunities. Therefore, in times to come, a holistic
approach to various policy options would be necessary and the
concerned departments and Ministries would have to give up the
“silo’ approach to policy making.
9.2.3 Health issues – It has been reported that the radiation from
telecom infrastructure and long term usage of mobile phones has
potential to cause cancer and is also resulting in other
physiological and psychological disorders like isolation,
depression and deprivation syndrome. More research is needed in
these areas, for making necessary modifications and improvements
in the telecom technologies and spreading awareness about these
issues.
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Strategic Plan Document for Department of Telecom,
Government of India
10.0 Monitoring & Review Arrangements
Responsibility for monitoring and review of various policy options
proposed in the strategic plan have been detailed in the
Implementation Plan. The strategic plan is to be monitored
primarily by the DoT, while some of the important and crosssectoral activities would need to be reviewed at the level of
Cabinet Secretary. Ministry of Finace (MOF) would need to
monitor activities having large financial implications. Some of the
most critical items would, however, need to be monitored and
reviewed by the PMO.
11.0 Strategic Plan- Continuity & Change
11.1 The Indian telecom sector has seen a number of policies since
it was opened up in the early nineties. The New Telecom Policy
(NTP) 94 was the first attempt which led to the setting up of the
Telecom Regulatory Authority of India (TRAI), followed by the
NTP 99 which set rolling the process of liberalization. This was
followed by various initiatives to reduce the licence fee, bring in
more operators in different telecom circles to enhance competition,
and introduce innovations like prepaid cards and the ‘calling party
pays’ regime.
11.2 Licences were auctioned in 1994-95, but rash bidding pushed
the telecom sector into a crisis. It had to be rescued by a movement
to the revenue sharing system. More recently the policy of
infrastructure sharing increased the cost efficiencies in the industry
which saw a pinnacle of achievement with the successful 3G
spectrum auctions, which established the market-determined price
of spectrum in a transparent manner for the first time.
11.3 The rapid growth and development of the telecom sector in
the last decade has thrown up challenges which have underlined
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Strategic Plan Document for Department of Telecom,
Government of India
the need of a revised policy. The recent 2G scam has highlighted
the urgency for a reform based strategy based on the principles of
transparency, non-discrimination and providing a level playing
field for different players and technologies.
11.4 The strategic plan presented above focuses on spectrum and
licencing reforms and is based on the identified priorities of
different stakeholders together with the learning from the best and
worst practices of the last decade. It also highlights the need for
rapid growth of telecom services-voice and broadband-in rural
areas to bridge the ‘digital divide’ by active intervention from the
under-utilized USOF fund. The rapid decline of BSNL in the last 5
years calls for urgent remedies which form part of the strategic
plan. Other pressing and neglected issues like promotion of
indigenous telecom equipment manufacture, R&D, and security
concerns; introduction of new innovations like internet telephony,
mobile banking and mobile number portability; regulatory reforms
and improved governance have also been touched upon. The
strategy document also seeks to address implementation and
monitoring issues and fix responsibilities and time lines.
Page 32 of 33
Strategic Plan Document for Department of Telecom,
Government of India
Note – Regarding modifications done subsequent to discussions
after Presentation
During the discussion after the presentation of Strategy Paper
at LBSNAA, Mussoorie on 7-1-2011, a number of valuable
suggestions were made by the Task Force members and peers.
The suggestions have accordingly been incorporated in the
Strategy Paper.
For ease of identification, these insertions/modifications have
been shown in italics.
Suggestion –
(i) Convergence of IT, Telecom and Broadcasting to be
included in the Objectives of the department.
[Action – Comments added on page 3-4]
(ii) (a) Why the coverage target under USOF has been
kept at 90% instead of 100% and (b) Why not
suggest expansion of coverage to even beyond the
land area of the country, in the coastal areas, for use
by fishermen and sailors [Action – Comments added
on page 14]
(iii) Justification for suggesting Restructuring and listing
of BSNL [Action – Comments added on page 15]
(iv) Issues relating to expansion of OFC Network to all
Gram Panchayats [Action – Comments added on
page 16-17]
(v) Role of Telecom Commission in monitoring
Implementation Plan [Action – Comments added on
page 27]
(vi) Correction of factual error regarding year of
auction of licences [Action – Correct year mentioned
on page 31]
Page 33 of 33