Communications - infrastructure, Microeconomics

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Communications:

Noting the importance of improved communications in increasing productivity and welfare, the New Telecom Policy (NTP) was introduced in 1999. NTP 99 was aimed at accelerating further development in the provision of telecom services with increased private participation. The key objectives of the policy are: 

•  Availability of telecommunications at affordable price for achieving socio-economic goals of the country. 

•  Providing universal service to all uncovered areas including rural areas and remote, hilly and tribal areas. 

•  Providing greater competitive environment in both urban and rural areas.  

•  Providing equal opportunities and level playing field for all players. 

Provision of universal access to Basic Telecommunication Services at affordable prices and a greater role for the private capital is the motive of the NTP 99. Realising that universal service obligations cannot be fulfilled under normal commercial environment, the NTP (1999) for this purpose envisages raising of resources through imposition of a universal access levy, which is a percentage of the revenue earned by the operators under various licenses.

The universal access levy, which supports the provision of village public telephones and rural direct exchange  lines would cover both capital and recurring expenses to run the services.  Universal service is taken to mean nation-wide coverage, non-discriminatory access and widespread affordability of telecommunication services. Availability implies provision of telephone services in all areas, even if they are uneconomic, rural and remote. Accessibility implies uniformity, non-discriminatory in terms of price service and quality regardless of geographical location. Affordability principle holds that price should be affordable. In uneconomic areas, this may mean tariff such as rentals below cost. 


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