National Digital Communications Policy, 2018 -Explained



  • GS Mains Paper-2
  • Government Policies and intervention

Why in news?

  • The Union Cabinet recently approved the National Digital Communications Policy-2018 (NDCP-2018).

Why has the new policy been formulated?

  • The new telecom policy has been formulated in place of the existing National Telecom Policy-2012.
  • It comes with a view to cater to the modern needs of the digital communications sector of India.
  • Its objective is to facilitate India’s effective participation in the global digital economy.
  • The policy aims to ensure digital sovereignty, and the objectives are to be achieved by 2022.

What are the key features of the new policy?

  • The government aims to provide universal broadband connectivity at 50 Mbps to every citizen.
  • It has kept a target of providing 1 Gbps connectivity to all Gram Panchayats by 2020 and 10 Gbps by 2022 at present the average broadband speeds in the country are 5-6 Mbps.
  • The policy will work towards ensuring connectivity to all uncovered areas.
  • Measures will be taken to attract investments of $100 billion in the Digital Communications Sector.
  • The policy includes the objective of training one million manpower for building New Age Skill.
  • It also aims at expanding the Internet of Things ecosystem to 5 billion connected devices.
  • Establishing a comprehensive data protection regime for digital communications that safeguards the privacy, autonomy and choice of individuals is also a goal.
  • It will thus enforce accountability through appropriate institutional mechanisms, to assure citizens of safe and secure digital communications infrastructure and services.
  • As part of the new Policy, the Telecom Commission is to be re-designated the “Digital Communications Commission”.

What are the concerns in the sector?

  • Annual investments by mobile phone companies are in the region of around $10 billion annually, which the government aims to increase significantly.
  • But it is to be noted that the telecom industry is, mostly, in deep trouble.
  • India’s top telecom company, Bharti Airtel, features in Credit Suisse’s list of stressed companies.
  • The government is ambitious in plans with 5G, IoT, M2M and other technologies.
  • But the policy has still not cut the very high levels of government levies in this regard.
  • India’s levies, including the 18% GST, range from 29-32% as compared to just an 11% VAT rate in China.
  • There are also no significant plans in cutting high spectrum prices.
  • While 100% of spectrum put on auction in 2015 remained unsold due to high spectrum prices, this was as high as 59% in 2016.
  • No auctions could take place in 2017 or 2018 due to telcos being cash-strapped.
  • Resultantly, revenues accruing to the government from the sector have fallen by around 37% in just the last two years.
  • The precarious finances would mean an unhealthy position in terms of repayment of bank loans.
  • More worrying is the ability of telcos to make good their spectrum payment obligations from earlier auctions.
  • There is not much likelihood of this improving in the immediate future.
  • Little progress has been made in providing right-of-way for connecting telecom towers with optic fibre.
  • Neither is there a progress in coming up with a sensible policy for the critical E and V bands.
  • (Spectrum in E and V band can ease work of telecom operator from laying optical fiber cable, and help them in providing last mile connectivity.
  • Data through E and V band can be transmitted with speed of around 1,000 MB per second.)
  • Given these, getting the telecom back on track requires a lot more work on addressing the financial and policy issues.