The Federation of Indian Chambers of Commerce and Industry (FICCI), in association with PricewaterhouseCoopers (PwC) India, has released a report titled Fostering Economic Growth through Next-generation Reforms in Enterprise Services & Data Sector: Inputs for NTP 2011 and National Policy on IT 2011. The report has made wide-ranging recommendations for creating an open, transparent and conducive environment for the National Telecom Policy (NTP) 2011.

The report states that over the last decade the main drivers for growth in the Indian telecom sector have been regulatory liberalisation, structural reforms and intense competition. Government policies have also facilitated this growth. The NTP 1999 focused primarily on second-generation reforms that involved assessing the sector’s viability, enhancing competition through an increased number of operators, technology neutrality and transforming the licence fee structure to a revenue sharing structure.

The NTP 2011 is expected to drive next-generation reforms and introduce a significant shift in focus from voice telephony to data services at the enterprise level. An enhanced focus on data is necessary, keeping in mind that while voice revenues may not experience much growth now, data revenues are likely to witness a high level of growth, fuelled by demand from enterprise customers. Although the Indian enterprise market has witnessed a strong compound annual growth rate of 20-25 per cent over the last three years, the country still lags behind in terms of percentage spend on data compared to other nations.

The PwC report highlights the needs of enterprise customers and the importance of the enterprise data services segment in India. Unveiling the report, Virat Bhatia, chairman of the Communications & Digital Economy Committee, FICCI, said: “The NTP 2011 provides a viable platform to address the needs of enterprise telecom service users on the one hand and the regulatory challenges faced by service providers on the other.”

Kasturi Bhattacharjee, telecom consulting leader, PwC India, added,  “Opening up the telecom sector has led to the phenomenal growth of voice and basic telephony services over the last decade. The same approach should be adopted for a similar explosion in data services. Next-generation reforms will be fuelled by the enterprise telecom sector, which is set to launch exciting data services that will boost the demand for data and take it to the next level.”

The key recommendations of the FICCI-PwC report are:

•   A single uniform licence fee of 6 per cent adjusted gross revenue or less should be adopted for all telecom services under the unified licence regime across the country.

•   Internet services may be kept out of the licence fee regime while taxing only VOIP services provided by internet service providers (ISPs).

•   Suitable provisions should be made to allow both active and passive infrastructure sharing between various telecom operators and ISPs.

•   Efforts should be made to avoid taxing domestic and international operators twice, by allowing them pass-through on the inputs.

•  Telecommunications should be given the status of essential services. The Indian Telegraph Act, 1885 needs to be updated.

•  Encryption levels should be enhanced to globally acceptable levels. Asymmetric key length of up to 2,048 bits and symmetric key length of up to 256 bits should be allowed.

•   Security and monitoring conditions should be reviewed suitably for enterprise data.

•  Single-window clearance should be mandated for cable landing stations instead of the current highly complex clearance procedures.

•  Enterprise users should be allowed to interconnect for captive requirements and within the same group company.

•  Regulations pertaining to other service providers (OSPs) should be minimised. Interconnectivity and infrastructure sharing, both active and passive, should be allowed among OSPs. Single OSP registration should be permitted for the entire organisation while allowing the agent’s connectivity to the company’s IT systems to facilitate work from anywhere within India. This can help in increasing the productivity of the ITeS/ BPO sector.