National Digital Communications Policy focus on improving broadband penetration

The National Digital Communications Policy, 2018, which focuses on broadband and fibre connectivity in the country talked about optimal pricing of the spectrum, according to research firm ICRA.

ICRA said that the key strategic objectives are to create an additional 4 million jobs in the sector, apart from enhancing the contribution of the sector to eight percent of India's GDP from prevailing around six percent.

Harsh Jagnani, Sector Head and Vice President, Corporate Ratings, ICRA Limited said that: "Improvement in broadband penetration as well as emphasizing on emerging technologies like 5G and Internet of Things definitely would add new revenue streams over long-term and can assist in improvement in the return on capital which has been subdued for some time now.

"Moreover, with growing data consumption, spectrum requirements would remain high and thus the policy incorporates identifying new spectrum bands along with making available harmonized and contiguous spectrum."

As of July 2018, the total broadband subscribers in the country stood at 460 million, translating into teledensity of 35 percent. Out of this, the home broadband subscriber base stood at 18 million, or roughly 10 percent of the households.

Thus, there is a long way to go for the country, and the implementation of the strategic vision would be key. Further, as of now, the spectrum is held by the telcos in the bands of 800MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, and 2500 MHz, with a proposal to auction spectrum in 3300-3600 MHz and 700 MHz bands in the medium term.

ICRA also pointed out that the Policy also talks about attracting investments of $100 billion in the sector. As per RBI's provisional data, India's communications services segment received $8.8 billion of investment in FY2018. Out of this, the telecom sector attracted Foreign Direct Investment of $6.2 billion, surging nearly five times in 3 years from 1.3 billion $ in FY2016.

An important proposal of the policy is on reforming the licensing and regulatory regime by reviewing the levies and fees including license fee, USOF levy, spectrum usage charges (SUC) along with rationalizing taxes and levies on equipment, infrastructure, and services.