Union Cabinet okays reforms in telecom sector to boost employment, growth

The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved a number of structural and process reforms in the telecom sector.

These schemes are expected to protect and generate employment opportunities, promote healthy competition, protect the interests of consumers, infuse liquidity, encourage investment and reduce the regulatory burden on telecom service providers (TSPs). Also read |  PTC exclusive: Haryana to reopen schools for classes 1, 2 and 3 from Oct 1 According to the Union Cabinet, in the backdrop of the outstanding performance of the telecom sector in meeting Covid 19 challenges, with the huge surge in data consumption, online education, work from home, interpersonal connect through social media, virtual meetings etc., the reform measures will further boost the proliferation and penetration of broadband and telecom connectivity. "The Cabinet decision reinforces PM Narendra Modi's vision of a robust telecom sector. The package is also expected to boost 4G proliferation, infuse liquidity and create an enabling environment for investment in 5G networks," read an official release. Also read | Engineer’s Day: India celebrates M Visvesvaraya’s 160th birthday The structural reforms and procedural reforms plus relief measures for the telecom service providers introduced by the Union Cabinet are as follows.

• Non-telecom revenue to be excluded on prospective basis from definition of Adjusted Gross Revenue
• Huge reduction in bank guarantee requirements (80%) against License Fee (LF) and other similar Levies
• No requirements for multiple bank guarantees in different Licenced Service Areas (LSAs) regions in the country
• Interest rates rationalised/ Penalties removed
• In future auctions, tenure of spectrum increased from 20 to 30 years
• Surrender of spectrum will be permitted after 10 years for spectrum acquired in the future auctions
• No Spectrum Usage Charge (SUC) for spectrum acquired in future spectrum auctions
• Additional SUC of 0.5% for spectrum sharing removed
• 100% Foreign Direct Investment (FDI) under automatic route permitted in Telecom Sector
• Spectrum auctions to be normally held in the last quarter of every financial year
• Cumbersome requirement of licenses under 1953 Customs Notification for wireless equipment replaced with self-declaration
• Self-KYC (App based) permitted. E-KYC rate revised to only One Rupee. Shifting from Pre-paid to Post-paid and vice-versa will not require fresh KYC
• Paper Customer Acquisition Forms (CAF) will be replaced by digital storage of data
• DOT will accept data on a portal based on self-declaration basis. Portals of other Agencies (such as Civil Aviation) will be linked with DOT Portal-PTC News