India unveils new telecom policy

Country outlines new telecommunications policy that includes new licensing regulations for telecom and bandwidth allocation, as well as rules on mergers within industry, reports say.
Written by Jamie Yap, Contributor

India has outlined a new telecommunications policy that will replace the previous one made in 1999, and will include new regulations on spectrum limits and separating telecom licenses from bandwidth ones.

The Wall Street Journal (WSJ) reported on Wednesday that the new policy advocates for a single telecom license for the entire country, and will separate bandwidth licenses into a different category, according to Communications Minister Kapil Sibal. He added that the policy is in operation from Wednesday and the full policy will be unveiled in April this year.

Currently, companies need separate licenses, which include both telecom and bandwidth, to operate in each of India's 22 telecom service areas. The single license policy means telcos will lose out on roaming charges, which accounts for nearly 10 percent of their revenues, it noted.

The need for the new policy was highlighted by allegations of sales rigging for the sale of licenses and bandwidth in 2008, which led to the arrest of lawmakers and company executives and the cancellation of 122 licenses allocated without auctions, the WSJ added.

Boosting mergers, no 3G sharing
Additionally, the new policy allows for "quick" approval of mergers when the resultant entity will not have a market share--which includes revenue and user base--of more than 35 percent or bandwidth of over 25 percent in a service area, the article noted.

It will also allow bandwidth sharing within a service area, except for 3G telephony services, the WSJ stated.

The Times of India also reported on Wednesday that the new telecom policy increased the prescribed limit on spectrum for all service providers to enable them to offer quality services. The current spectrum limit is 6.2MHz.

"The prescribed limit on spectrum assigned to a service provider will be 2x8MHz (paired spectrum) for GSM technology for all service areas other than Delhi and Mumbai where it will be 2x10MHz (paired spectrum)," Sibal said.

The minister did not comment on how spectrum would be priced, but said the new norms of the revamped policy will help users receive better services and at affordable rates due to more efficient usage of spectrum, the report noted.

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