Re-dialling reform: Implementation holds the key to the new telecom policy

The draft National Digital Communications Policy lays out an ambitious vision for digital communications. The draft sets the following targets for the year 2022: Provisioning of broadband for all; creating 4 million additional jobs in digital communications; enhancing the contribution of the sector to 8 per cent of India's GDP (from around 6 per cent in 2017); propelling India to the top 50 nations in the Information and Communication Technologies Development Index from a lowly 134 in 2017; and ensuring digital sovereignty. The needs of consumers will be addressed by appointing a new telecom ombudsman and setting up a web-based complaint system. In addition, the draft moots the possibility of setting up public-private partnerships in broadband expansion projects, and suggests key changes in the spectrum and tower policies to make it easier to conduct business. However, while the stated aims seem unexceptionable, it remains to be seen how efficiently this is translated into action on the ground. 

The Telecom Policy of 2012 was also hailed as a far-sighted document but the trajectory of the sector has been less than ideal since then. For one, service providers are facing enormous financial stress due to high spectrum fees and an ongoing price war in the sector. The government has not been able to release spectrum optimally, and auctions have seen lukewarm responses due to high reserve prices. The industry is also mired in litigation, which has held back consolidation and development. The draft aims to attract an additional $100 billion in investments. But this seems unrealistic given that the sector is currently finding it hard to raise even $10 billion a year. The details of policy implementation will, therefore, matter a great deal. For example, the policy proposes to lower costs by cutting spectrum charges, by the rationalisation of taxes on services, equipment and infrastructure, and by simplifying licensing procedures. These could actually lead to further litigation if they are not carefully thought through, since service providers, which have committed vast sums, may object to new players getting an easier ride. 

The commitment to net neutrality, too, has been strongly reiterated in the new draft, including a suggestion to boost transparency by ensuring non-discriminatory treatment of digital content with appropriate disclosures. However, it may be noted that recommendations of the Telecom Regulatory Authority of India on net neutrality were made in November 2017 and have still not been ratified by the department of telecommunications. There is also an emphasis on developing standards to ensure data security is aligned to global best practices, in terms of encryption and data retention, along with suggestions to increase user awareness about security issues. But the draft also suggests setting up new interception agencies with interception and analysis systems. This recommendation will have to be implemented with great care to avoid breaching the constitutionally-backed fundamental right to privacy.

The telecom sector is a critical component of infrastructure, and its positive externalities can trigger faster macroeconomic growth. As the draft policy remarks, a 10 per cent increase in broadband penetration may lead to 1 per cent increase in GDP. However, regardless of the ambitious long-term vision, the new policy will stand or fall on the basis of its ability to drag the telecom sector out of its current swamp.