India outlines proposed changes to regulation

India’s government has detailed the much-anticipated changes to be made to the country’s telecoms regulation. The overhaul introduces new rules concerning roaming, spectrum licensing and supporting local equipment manufacturers, as well as tackling fierce competition in the Indian market with new regulation promoting consolidation.

Widely expected to be approved by the end of 2011, the regulatory changes are being viewed as a response to the spectrum licensing scandal that has shaken the country’s telecom sector – and the Indian government is likely hoping that the long-awaited proposals will be an end to the matter, which lost around US$39 billion in revenue and resulted in several Ministers resigning.

Among the proposed changes are the creation of both a Network Service Operator and a Service Delivery Operator as part of an effort to “delink the licensing of networks from the delivery of service to the end users to facilitate faster rollout of services.” In addition, network licences will be delinked from spectrum so that it can be sold at current market value.

Complaints from local operators about the limited capacity in India’s fiercely competitive mobile market are also being addressed, with the government promising 300MHz of extra spectrum by 2017, and a further 200MHz by 2020. Leading operator Bharti issued a statement reading: “The proposal to provide more spectrum, allow sharing of spectrum and allocation of spectrum through transparent market-based processes are progressive policy decisions, which will provide much needed capacity augmentation to this vital sector.”

The provision of additional spectrum is complemented by legislation to “facilitate consolidation in the converged telecom service sector while ensuring sufficient competition.” The changes will make it easier for operators that are unable to meet the terms of their licences to merge with - or be bought out by - competitors.

Meanwhile, other regulatory proposals are more likely to be welcomed by subscribers than operators. These include the gradual abolition of roaming charges between India’s national telecoms circles, as well as the nationwide introduction of mobile number portability.

Indian vendors also benefitted from the proposals, with the government stating that it aimed to boost "domestic production of telecommunication equipment" so that by 2020, 80% of the country’s sector would be supplied by locally manufactured equipment. This would represent a 65% increase in revenue for the country’s vendors.

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