Wooing Telecom Corporates

National Digital Communication Policy

Ramchandra Pattabi

The Department of Telecom has announced Government's National Digital Communication Policy 2018 in its draft form. Most of the points are as prescribed by TRAI consulting various Telcos. This time they have given a new nomenclature as Digital Communication Policy instead of the mere Telecom Policy as that of earlier ones. The paradigm shift is more towards globalising Indian digital telecom economy to advance electronic capitalism in the country. It is estimated that India's digital economy has the potential to reach one trillion US Dollar by 2025.

The policy has accepted that the sector is one of capital intensive nature but has not prescribed ways and means for the existing PSUs to get their capital for their further expansion and fulfill the policy initiatives. This one is possible only if the Government allots spectrum for 4G/5G as a part of equity infusion.

The advocated 'digital sovereignty' is guaranteed only with the strengthened growth and sustainability of PSUs like BSNL and MTNL.

There is no level playing field at all though the policy treats every Telecom Service Provider (TSP) equal in terms. In the case of employment, the PSUs are more committed to wipe out unemployment and more committed following Labour laws of the country. The Private Telcos least bother about promoting employment opportunities with any prescribed norms, transparent recruitment policy and service rules. There is no concept of permanent employment and they use hire and fire only. There is no policy prescription in the case of jobs creation that this much of production needs that much minimum employees and managerial staff. Unless this prescription is made no level playing field is ensured. The claim of providing millions of job will be farce only.

The policy reveals that India has approximately 1.5 million KM of OFC. But there is no breakup that who owns what to check in what direction 'fibre first initiatives' and deployment will go. The policy is not transparent whether the fibre vested with PSUs are to be opened up in the name of unbundling and if done that would cause greater damage to the infra of PSUs and endanger the digital sovereignty also. The policy prescribes National Fibre Authority but does not detail about its role whether like BSNL or will be a common authority for the entire OFC of India.

The policy is more vocal about 'Broadband for all' from the earlier mission that BB on demand. The NDCP assures fiscal incentives, tax incentives and incentivising the fixed line BB. PSUs like BSNL were already leaders in the market. What then the incentives for all the service done by them by sincerely achieving the earlier targets focused by 2011 policy. The prescribed incentives and tax incentives for those achievements since 2011 should be given to BSNL for encouraging the PSU to advance the present policy of BB to all.

The policy recognises spectrum as a key natural resource for socio economic goals. If the Government is serious on this aspect then vesting 4G/ 5G spectrum to the PSUs is a must as capital infusion instead of treating them similar with other private telcos who are more profit centric than socioeconomic goal centric to get spectrum on market prices.

When reviewing SATCOM policy along with Department of Space, the policy should take the PSUs into confidence to help to achieve the security of the national and digital sovereignty.

There is a welcome initiative for ensuring inclusion of uncovered areas and digitally deprived segments of society like marginalised communities, women, persons with differential capabilities and economically and socially weaker sections in urban pockets. This entire project unless handed over to the PSUs as a special Government scheme, things will not reach to the real beneficiaries.

The policy is pronouncing some bigger goals by 2022. The most important one is attracting investments of 100 billion US dollars (650000 crore), that equals entire GDP of telecom of a year. The policy does not detail the past experiences and the incentives given for attracting investments. The 80% of Telcos’ total debt of 4.5 lakh crore was served only by the domestic Banks and the Banks are instructed to shut door for providing further loans to telcos with the apprehension of the reduced repaying capacity of Telcos. One does not know how and where from the investments would be attracted and on what compromising terms and conditions.

It is good to see the status given to telecom infra as that of Roadways, Railways, Waterways and Airlines to enable low cost financing. One has to wait and see how this catalyst is going to serve them. The policy recognises the digital communication as core to smart cities. BSNL has already demanded that the entire project should be given to BSNL to ensure smooth and proper implementation. One hopes that the policy would help in this aspect.

Most of the Telcos may welcome the policy prescription of reviewing Licence Fee, USO Fund, Spectrum Usage charges, rationalising taxes and levies. Telcos are complaining that already 30% of their revenues are taken by Government by levies and taxes. Nobody knows, how much reduction in that is aimed by the policy to give concession to the Telco corporates by losing money to the Government kitty.

In the aspect of strengthening of PSUs, the policy is not that much enthusiastic as that of earlier policy 2011. This time the policy does not recognise the importance of the continuity of PSUs and there is absence of appreciation of its past role as placed in earlier policies. Instead, the policy is focusing about technical expertise and knowledge management. This may create suspicion in the minds of internal expertise and the existing management that their future role is minimised. The policy wants to use the training infra available with the PSUs for skill development. One can welcome this if it brings financial health to the PSUs.

It seems that the policy is a mixed bag to incentivise the corporates and link India's telecom digital economy with global digital economy, of course with trickle down results like empowering all through access to digitalisation. But 'who benefits what and how much and how quick' is the million dollar question. The answer naturally goes in favour of telecom giant corporates.

Vol. 50, No.49, June 10 - 16, 2018