Introduction
The new economic policy adopted by the Government aims at improving India's
competitiveness in the global market and rapid growth of exports. Another
element of the new economic policy is attracting foreign direct investment
and stimulating domestic investment. Telecommunication services of world
class quality are necessary for the success of this policy. It is, therefore,
necessary to give the highest priority to the development of telecom services
in the country.
Objectives
The objectives of the New Telecom Policy will be as follows:
a) The focus of the Telecom Policy shall be telecommunication for all
and telecommunication within the reach of all. This means ensuring the
availability of telephone on demand as early as possible.
b) Another objective will be to achieve universal service, covering
all villages, as early as possible. What is meant by the expression universal
service is the provision of access to all people for certain basic telecom
services at affordable and reasonable prices.
c) The quality of telecom services should be of world standard. Removal
of consumer complaints, dispute resolution and public interface will receive
special attention. The objective will also be to provide the widest permissible
range of services to meet the customer's demand at reasonable prices.
d) Taking into account India's size and development, it is necessary
e) The defence and security interests of the country will be protected.
Present Status
The present telephone density in India is about 0.8 per hundred persons
as against the world average of 10 per hundred persons. It is also lower
than that of many developing countries of Asia like China (1.7), Pakistan
(2), Malaysia (13) etc. There are about 8 million lines with a waiting
list of about 2.5 million. Nearly 140,000 villages, out of a total of 5,76,490
villages in the country, are covered by telephone services. There are more
than 100,000 public call offices in the urban areas.
Revised Targets
In view of the recent growth of the economy and the reassessed demand,
it is necessary to revise the VIII Plan targets as follows:
a) Telephone should be available on demand by 1997
b) All villages should be covered by 1997
c) In the urban areas a PCO should be provided for every 500 persons
by 1997
d) All value-added services available internationally should be introduced
in India to raise the telecom services in India to international standards
well within the VIII Plan period, preferably by 1996.
Resources for the revised
targets
The rapid acceleration of telecom services visualized above would require
supplementing the resources allocated to this sector in the VIII Plan.
The total demand (working connections + waiting list) showed a rise of
nearly 50% from 7.03 million on 1.4.1992 to 10.5 million on 1.4.1994 over
a three year period. If the demand grows at the same rate for the next
three years, it would touch about 15.8 million by 1.4.1997. The actual
rate of growth is likely to be higher as the economy is expected to grow
at a faster pace. Achieving the target of giving telephone on demand by
1997 would thus imply releasing about 10 million connections during the
VIII Plan as against the existing target of 7.5 million. Release of 2.5
million additional lines alone would require extra resources to the tune
of Rs. 117.50 billion at a unit cost of Rs. 43,000 per line at 1993-94
prices. To this must be added the requirement on account of additional
rural connections of Rs. 40 billion.
Even with the comparatively modest targets of the VIII Plan, as originally
fixed, there is a resource gap of Rs. 75 billion. The additional resources
required to achieve the revised targets would be well over Rs. 230 billion.
Private investment and association of the private sector would be needed
in a big way to bridge the resource gap. Private initiative would be used
to complement the Departmental efforts to raise additional resources, both
through, increased internal generation and adopting innovative means like
leasing, deferred payments, BOT, BLT, BTO etc.
Hardware
With the objective of meeting the telecom needs of the country, the sector
manufacturing telecom equipment has been progressively delicensed. Substantial
capacity has already been created for the manufacture of the necessary
hardware within the country. The capacity for manufacture of switching
equipment, for example, exceeded 1.7 million lines/year in 1993 and is
projected to exceed 3 million lines/year by 1997. The capacity for manufacture
of telephone instruments at 8.4 million units per year is far in excess
of the existing or the projected demand. Manufacturing capacities for wireless
terminal equipment, Multi Access Radio Relay (MARR) for rural communication,
optical fibre cables, underground cables etc. have also been established
to take care of the requirements of the VIII Plan.
Value-added services
In order to achieve standards comparable to the international facilities,
the sub-sector of value-added services was opened up to private investment
in July 1992 for the following services:
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Electronic Mail
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Voice Mail
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Data Services
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Audio Text Services
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Video Text Services
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Video Conferencing
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Radio Paging
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Cellular Mobile Telephone.
In respect of the first six of these services companies registered in India
are permitted to operate under license on non-exclusive basis. This policy
would be continued. In view of the constraints on the number of companies
that can be allowed to operate in the area of Radio Paging and Cellular
Mobile Telephone Services, however, a policy of selection is being followed
in grant of licenses through a system of tendering. This policy will also
be continued and the following criteria will be applied for selection:
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Track record of the company;
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Compatibility of the technology;
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Usefulness of the technology being offered for future development;
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Protection of national security interests;
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Ability to give the best quality of service to the consumer at the most
competitive cost;
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Attractiveness of the commercial terms to the Department of Telecommunications.
Basic services
With a view to supplement the effort of the Department of Telecommunications
in providing telecommunication services to the people, companies registered
in India will be allowed to participate in the expansion of the telecommunication
network in the area of basic telephone services also. These companies will
be required to maintain a balance in their coverage between urban and rural
areas. Their conditions of operation will include agreed tariff and revenue
sharing arrangements. Other terms applicable to such companies will be
similar to those indicated above for value-added services.
Pilot Projects
Pilot projects will be encouraged directly by the Government in order to
access new technologies, new systems in both basic as well as value-added
services.
Technology and Strategic
Aspects
Telecommunication is a vital infrastructure. It is also technology intensive.
It is ,therefore, necessary that the administration of the policy in the
telecom sector is such that the inflow of technology is made easy and India
does not lag behind in getting the full advantage of the emerging new technologies.
An equally important aspect is the strategic aspect of telecom which affects
the national and public interests. It is ,therefore, necessary to encourage
indigenous technology, set up a suitable funding mechanism for indigenous
R and D, so that the Indian technology can meet the national demand and
also compete globally.
Implementation: In order to implement the above policy, suitable
arrangements will have to be made to
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protect and promote the interests of the consumers;
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ensure fair competition.
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