India will have the third version of its telecom policy sometime this year. Version 1.0, dating back to the early 1990s, defined some very rudimentary norms for private firms to offer telephony services, until then the preserve of state-owned telcos.
Version 2.0 allowed the private telcos an opportunity to pull themselves out of a hole they had dug for themselves and set the stage for the much-vaunted telecom boom of the 2000s. And Version 3.0, as is usually the case with reformist policies, will try and set right many of the issues unresolved or even created by the first two policies.
The most glaring of these errors of omission is the one concerning radio waves, or spectrum. Thus far, this scarce public resource has been given to telcos almost at the pleasure of the department of telecommunications (there is no pricing policy). The government has also gotten into the habit of handing out what’s called start-up spectrum along with licences; the first telcos on the scene got 6.2 Mhz each and in the second wave, 4.4 Mhz. Given the scandal surrounding the issue of spectrum and licences in 2008, it is only natural that the new telecom policy delinks licences from spectrum (which means telcos will no longer receive start-up spectrum). There are other progressive provisions in the policy as well, as evident in the sneak peek the minister provided on Monday: liberal merger and acquisition rules; uniform fees; and spectrum sharing norms.
Indeed, the only fault this newspaper can find with the policy is that it is at least nine years late. It should have been drafted and announced in 2002, and apart from the pricing and allotment of radio waves, it should have also decided if telcos with licences to offer fixed line services could enter the mobile telephony business and whether telcos offering mobile telephony on one technology platform could also do so on another (both, as it were, were decided through ad-hoc policy changes, one in 2002-03 and the other in 2008). Apart from preventing scandals such as the one currently being investigated by several agencies, that may have also resulted in a market that looks different in terms of participants. Success shouldn’t depend on the ability to game the system to acquire resources. The new telecom policy, hopefully, will ensure that it doesn’t.
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