Sibal puts on a clean-up act, talks unified licence

Communications minister Kapil Sibal seems keen on making a new beginning. He wants to do away with 22 telecom circles by introducing one unified licence for the whole country. He also wants to make 2G, 3G and 4G licensing redundant. These issues are at the heart of the controversy that rocked the nation for the past several months.

The Department of Telecom (DoT) has outlined some sweeping changes. DoT is planning to get rid of the web of 22 telecom circles in India and have one nation, one market policy, according to a report in the Business Standard . This will allow mobile portability across the country and also eliminate roaming charges.

The move is also expected to pave the way for mergers and acquisitions in the telecom space. Institutional investors in the stock market have for a year been underweight on the Indian telecom sector. The intense competition has hurt revenue per user of telecom companies. In June 2011, Firstpost reported on the tough environment faced by the companies in the sector.

The battle is now for the subscriber who spends more time on the network using data, roaming or other value-added services. Big companies are no longer chasing the subscriber looking for cheap voice call rates. They want users who can give more revenues per minute (RPM).

The department had set up several committees which have come up with several recommendations. One of them is the use of spectrum should be service neutral. This means the spectrum auctioned should not be linked to 2G, 3G, 4G and so on. The idea of the new telecom strategy has evolved after the controversy over the allotment of 2G spectrum.

The department is also considering opening up the internet telephony segment and allowing unrestricted calls by consumers through their internet access, according to another report in Business Line .

If this is allowed, players like Reliance Infotel (Mukesh Ambani) would be able to offer voice services using a data licence. Reliance is looking to set up a 4G broadband wireless network across the country.

Over the past few years, per minute call rates has declined rapidly. Telecom companies have to engage users to spend more time on the network through data and text messaging. Internet companies like Sify, Tulip Telecom and Net4India get an opportunity to offer long-distance and local calls. The Business Line further argued that services such as Google Voice and Skype would be available on mobile phones.

Kapil Sibal, the Union telecom minister, was quoted in The Economic Times , as suggesting a policy that would allow mobile phone companies to exit India. This would be announced along with the guidelines for mergers and acquisitions in the space.

Another recommendation that merits attention is broadband should be made a fundamental right for all citizens. This could mean setting up an infrastructure through various technologies to allow people to gain access.