UPA government is back with majority - a positive sign for telecom industry..

Hi friends,

Let me share with you all a small piece of news. Recently the results of elections have come and this news says that it is all positive for the Telecom industry.How has this election made a difference to the Telecom industry? What is your opinion friends? Are these changes/developments possible only after the elections?

Just follow the news and give your views.

The Congress-led United Progressive Alliance’s return to power with a clear mandate will allow the combine usher in much-needed reforms in this sector, notably a new spectrum policy and listing of government-owned telco Bharat Sanchar Nigam (BSNL).

Finally, India’s mobile phone users can also look to enjoy high-end services such as high-speed internet  and video conferencing, as the new government speeds up the auction process for third generation spectrum. The 3G auctions have been postponed many times since 2007 due to constant sparring among the ministries of finance, defence and communications.

But the thumping win by the Congress-led alliance may see the party get the telecom portfolio, which will enable it to push for the 3G auctions and double the floor price of these airwaves to over Rs 4,000 crore as demanded by the finance ministry. The DMK’s A Raja, who held the telecom portfolio in the earlier regime, was opposed to hiking the 3G auction base price.

The UPA is also set introduce more rural India-oriented policies—besides taking high-speed internet to villages, the new government is also expected to usher in mobile number portability before the year-end. BSNL’s listing is also on the cards, say industry observers. The previous government was forced to drop plans for the country’s largest listing yet as again, Mr Raja was reluctant to pursue it.

The sector can also expect to see the introduction a new spectrum allotment policy as the UPA would want to bury all ongoing controversies associated with the allotment of airwaves. Spectrum-related controversies have plagued the country’s telecoms sector for years, and the DMK ministers had failed to come up with a comprehensive solution.

“The telecom sector needs a stable spectrum allocation policy. Be it linked with the subscriber base or through auctions, we want more spectrum and a stable regime,” Bharti Airtel chairman and managing director Sunil Bharti Mittal told ET.

The clear verdict will enable the new government overcome opposition from vested interests who are opposed to massive policy changes aimed at giving a boost to the sector whose growth has a direct bearing on the country’s GDP. The government is also set to address a long pending demand by the industry to reduce and simplify the existing levy structure.

Indian consumers enjoy the world’s lowest tariffs despite its telcos being subject to the highest levies globally, where they have to share 25-30% of their annual revenues as different forms of taxes.

“The new government should simplify the existing levy structure. There different levies for mobile, domestic long distance, spectrum charges and so on. There is also different levies for different areas. Service tax, licence fee, microwave fees... there needs to be some uniformity in levy structure for all segments,” Mr Mittal said.

The UPA may also revive its plan to try and make available free-broadband facility for a sizeable section of the population.

Shortly after this grand plan was announced in 2007, the then communications and IT minister, Dayanidhi Maran, was forced to quit.

The proposal could not be implemented as it was not on the agenda of Mr Raja, his successor.

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