INTRODUCTION

The new economic policy aims at improving India's competitiveness in the global market and rapid growth of exports.

The new economic policy is attracting foreign direct investment and simulating 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.

The objectives of the new telecom policy are:

1. To ensure the availability of telephone on demand.
2. To achieve universal service covering all villages.
3. To provide world standard telecom services. Removal of consumer complaints, dispute resolution and public interface will receive special attention. To provide widest permissible range of services to meet the customer's demand at reasonable prices.
4. To ensure that India emerges as a major manufacturing base and major exporter of telecom equipment.
5. To protect the defence and security interests of the country.

REVISED TARGETS

In view of the recent growth of the economy and the reassessed demand, the VIII plan targets has been revised as follows :

1. Telephone should be available on demand by 1997;
2. All villages should be covered by 1997;
3. In the urban areas a PCO should be provided for every 500 persons by 1997;
4. All value-added services available internationally should be introduced in India. To raise the telecom services in India to International level preferably by 1996.

HARDWARE

With the objective of meeting the telecom needs of the country the sector of manufacture of telecom equipment has been progressively delicensed. Substantial capacity has been created for the manufacture of the necessary hardware, within the country.

The capacity for manufacture of switching equipment, for example, exc eeded 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, un derground cables etc. have also been established to take care of the requirements of the VIII Plan. With the revision of the targets demand would firm up and there would be an incentive to expand the capacities to meet the extra requirement.

VALUE-ADDED SERVICES

In order to achieve standards comparable to international facilities, the sub-sector of value-added services was opened up to private in vestment in July 1992 for the following services :

1. Electronic mail
2. Voice mail
3. Data services
4. Audio Text services
5. Video text services
6. Video conferencing
7. Radio paging
8. Cellular Mobile telephone

In respect of the first six, companies registered in India are permit ted to operate under licence on non-exclusive basis. This policy would be continued.

In view of the constraints on the number of companies that can be all owed to operate in the area of Radio paging and Cellular Mobile Telep hone Services, however, a policy of selection is being followed in grant of licences through a system of tendering. This policy will also be continued and the following criteria will be applied or selection:

1. Track record of the company
2. Compatibility of the technology;
3. Usefulness of the technology being offered for future development;
4. Protection of national security interests;
5. Ability to give the best quality of service to the consumer at the most competitive cost; and
6. Attractiveness of the commercial terms to the Department of telecommunications.

BASIC SERVICES

With a view to supplement the effort of the Department of Telecommunications 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 and technology intensive. It is therefore necessary 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 & D so that the Indian technology can meet the national demand and also compete globally.

GUIDELINES FOR BASIC TELECOM SERVICES

Following are the highlights of the guidelines laid down in respect of provision of basic telecom services by the private sector.

• Companies wishing to enter into the field of basic telecom services may make an application for the grant of licence to the Department of Telecommunications.
• Only companies registered in India will be permitted to participate in providing basic voice telephone services. In the event of a joint venture between an Indian and a foreign company, not more than 49% foreign equity would be permitted.
• The licensing of private sector will be on a circle basis. Only one licence, in addition to DoT, will be granted for each circle.
• The private sector will not be licensed for the long distance tele com network (i.e. National and inter-circle long distance lines) in the first instance. This position will be reviewed after five year.
• There will be a Telecom Regulatory Authority of India (TRAI) which will be an autonomous body.

The authority will be responsible for:

• Standard Setting
• Price regulation
• Ensure technical compatibility among different service providers
• Fixation of access charges
• Protect consumer interest
• Frequency of break downs
• The Pilot Projects will be accepted in the areas of low telecom density, but with high growth potential. The technology brought in by the Pilot Projects should be the latest available internationally which has not been in use in India. The party providing the basic services will be preferred.
• The Government will be the licensing authority. The period of licence will normally be fifteen years.
• A standard document will be prepared to spell out the network and service obligations of the licences

Source: Ministry of Telecommunication,
Government of India.

Last Upate: July 31, 1998