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November 18, 1998


Intel presents the future of business computing

Peep show:Here's a keyhole view of a sexy new telecom policy, slated for a month-end unveiling.Peep show:Here's a keyhole view of a sexy new telecom policy, slated for a month-end unveiling. The new telecom policy is almost done. And is it a stunner? The stuff's so hot, it's a wonder the smoke didn't reach newshounds any early. Eventually, the national press did scoop…

Email this story to a friend. Sorry! We know, we know, bulleted highlights would do better than all this jawing. But teasers are standard at the peep show ;-)

Now brace yourself.
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  • The Department of Telecommunications' monopoly over domestic long-distance telephony would be broken.
  • Cap on number of players in basic and cellular services is likely to go.
  • The Telecom Regulatory Authority of India may become the only tariff arbiter.
  • The bidding route for telecom licences is to be scrapped.
  • Basic service providers may be free to tap cellular segment and vice versa.
  • Licence fee will make way for a one-time entry fee.
  • Entry fee may be pegged at a fifth of the licence fee.
  • A service tax on calls is likely to be included in a model for sharing revenue.
  • The telecommunications sector would be accorded infrastructure status.
  • A brand new legislation may finally replace the Indian Telegraph Act of 1885.

Actually, the policy may suggest that DoT's monopoly over domestic long-distance should be dismantled in just two months and the Videsh Sanchar Nigam Limited's monopoly over overseas telecommunications by 2004.

These recommendations are part of the policy package being finalised to speed up private sector investments in telecommunications.

The policy proposes to allow cellular operators to enter basic services and vice versa. By removing restrictions on the number of players in cellular services, the policy will attempt to automatically end the bidding system.

Instead of licence fees, the policy will put forth the concept of a one-time entry fee to be based on profitability.

A number of options are being debated for the entry-fee structure with one idea being to peg it at a fifth of the licence fee, Central Vigilance Commissioner and National Task Force on IT member N Vittal has been quoted as saying.

Vittal promised the policy would be announced by November 30.

Besides the concept of sharing revenue, a 'service tax on calls' is being mooted as a method to guarantee revenue, he explained.

But the most significant change is going to be in the way the government will view telecommunications. The policy attempts to shift the emphasis from a revenue-generating operation to an infrastructure activity.

Policymakers are also thinking of setting up a 'universal service fund' for providing telephone services in far-flung and less remunerative rural areas.

Another option being debated is to make it obligatory for telecom operators to provide village telephony services.

The policy will vest tariff-fixing powers solely to the Telecom Regulatory Authority of India.

A new telegraph legislation may also replace the existing Indian Telegraph Act, 1885. The old legislation has been amended 400 times!

The new policy will be based on two broad axes. One, it will refix the date for availability of telephone on demand in all parts of the country and two, it will spell out the induction of new technology.

These axes should simultaneously produce better returns for private investors in the telecom sector.

The present demand-supply situation for telephone connections makes private sector investment unfeasible. This is because the costs for setting up a separate network counts out to Rs 40,000 per connection!

The policy will recommend throwing open the country's 21 telecom circles to competition. The restriction on the number of circles that each operator of basic services can handle will also be removed.

At present, only six basic telecom circles are active. The remaining 15 are yet to see action.

Rapid changes are taking place in telecommunications with the convergence of technologies like television, telephone, computing, multimedia and the Internet.

The policy will make a beginning in addressing this convergence but it will have to evolve a fresh strategy with new priorities in the context of not just the convergence but also the downscaling of demand figures for telephones.

- Compiled from the Indian media

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