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REFORMS IN THE TELECOM SECTOR INTRODUCED

REFORMS IN THE TELECOM SECTOR INTRODUCED

Context:

The Union Cabinet has welcomed many changes to the infrastructure and systems in the Telecom sector.

About the Reforms:

  • Cabinet approved 9 structural reforms and 5 reforms to the telecommunications sector.
  • Adjusted gross revenue (AGR) definition has been adjusted to exclude future phone revenue and a 4-year suspension of telephone payments was also approved.
  • For all telecom service providers (TSPs), Cabinet approved the suspension/deferment of up to 4 years in the annual payment of arrears arising from the AGR decision, by protecting the Net Present Value (NPV) of the amounts to be protected.
  • To encourage investment, 100% of foreign direct investment (FDI) under the automatic route is allowed in the telecommunications sector.
  • Spectrum user costs have been rationalised. There will be an annual aggregation. Spectrum can now be surrendered, spectrum can also be shared.
  • For future auctions, the term of office will be increased to 30 years from the current 20 years.
  • The KYC process for switching to prepaid subscriptions has been removed.

Telecom Sector in India:

  • Currently, India is the world’s 2nd-largest telecommunications market with a subscriber base of 1.16 billion and has registered strong growth in the last decade.

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