The Hindu Editorial Analysis - 25th November 2022 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

A word of advice on OTT and the draft Telecom Bill 

Context

Recently, the Department of Telecommunications (DoT) released the draft Indian Telecommunications 2022 Bill to regulate Internet-based OTT (Over-The-Top) telecom services.

What are the Key Highlights of the Draft Bill?

• About:
  • The draft Bill consolidates three separate acts which currently govern the telecommunication sector — the Indian Telegraph Act, 1885, Indian Wireless Telegraphy Act, 1933, and The Telegraph Wires (Unlawful Protection) Act, 1950.
  • Dilution of TRAI Power:
  • The DoT has also proposed to dilute some crucial powers and responsibilities of the Telecom Regulatory Authority of India (TRAI) on issuing new licences to service providers.
• OTT Regulation:
  • The government has included internet-based and OTT communication services such as WhatsApp calls, Facetime, Google Meet etc under telecom services.
  • It was the long-standing demand by telecom operators for creating a level playing field. At present, while telecom companies need a licence to offer services, OTT platforms do not.
  • Further, bringing OTTs under the ambit of telecom services means that OTT and internet-based communications would require a licence to offer services.
• Provision of Refund:
  • The telecom ministry has proposed a provision for refund of fees in case a telecom or internet provider surrenders his license.
  • Default in Payment by Licensees:
  • In the event of payment default, and in extraordinary circumstances, including financial stress, consumer interest, maintaining competition in the sector, or reliability and continued supply of telecommunication services, the govt can defer the payment of such amounts, convert a part or all of the amounts payable into shares, write-off payable amounts or provide relief from payment.
• In case of Insolvency:
  • In the case of insolvency, the spectrum assigned to an entity shall revert to government control, and the Central Government may take such further action, as may be prescribed, which may include allowing such licensee or assignee to continue to use the spectrum.
• Telecommunication Development Fund:
  • It proposes to rename the Universal Service Obligation Fund (USOF) as Telecommunication Development Fund (TDF).
  • The USO fund is generated from the annual revenue of telecom services providers. The sums of money received towards the TDF will first be credited to the Consolidated Fund of India.
  • The fund will be utilised to boost connectivity services in underserved rural, remote, and urban areas. It will also aid research and development of new telecommunication services, skill development, and support the introduction of new telecommunication services.

What is the Present status of the Telecom Industry in India?

• Present Status:
  • The Telecom industry in India is the second largest in the world with a subscriber base of 1.17 billion as of 2022. India has an overall teledensity of 85.11%.
  • The industry’s exponential growth over the last few years is primarily driven by affordable tariffs, wider availability, the roll-out of Mobile Number Portability (MNP), expanding 3G and 4G coverage, and evolving consumption patterns of subscribers.
  • The Telecom sector is the 3^rd largest sector in terms of FDI inflows, contributing 6.44% of total FDI inflow, and contributes directly to 2.2 million employment and indirectly to 1.8 million jobs.
  • Between 2014 and 2021, the FDI inflows in the Telecom sector rose by 150% to USD 20.72 billion from USD 8.32 billion during 2002-2014.
  • 100% Foreign Direct Investment (FDI) has now been allowed in the Telecom sector under the automatic route.
  • India is on its way to becoming the second-largest smartphone market globally by 2025 with around 1 billion installed devices and is expected to have 920 million unique mobile subscribers by 2025 which will include 88 million 5G connections.
• Initiatives:
• PLI Schemes under Atmanirbhar Bharat Abhiyan:
  • Production Linked Incentive (PLI) Scheme worth INR 12,195 Crores for manufacturing of telecom and networking products. Incentives worth more than INR 4,000 Crores have been earmarked for the Design Led Manufacturing Scheme of the existing PLI Scheme.
• Telecom Sector Reforms:
  • In 2021, large-scale structural and procedural reforms have been brought in to enhance liquidity and minimise financial stress within the telecom sector.
• Bharat Net Project:
  • Bharat Net Project Optical fibre cables laid to 178,247-gram panchayats, out of which 161,870 are service ready. Additionally, 4,218-gram panchayats have been connected over satellite media, taking the total number of service-ready gram panchayats to 166,088.
• Prime Minister Wi-Fi Access Network Interface (PM-WANI):
  • Provision of public Wi-Fi service through Public Data Offices (PDOs) spread across the country to accelerate the expansion of broadband internet services.
• Challenges:
  • Declining Average Revenue Per User (ARPU): ARPU decline now is sharp and steady, which, combined with falling profits and in some cases serious losses, is prompting the Indian telecom industry to look at consolidation as the only way to boost revenues.
    • In 2019, the Supreme Court allowed the government’s plea to recover adjusted gross revenue of about Rs 92,000 crore from telcos, that further adds to their stress.
  • Limited Spectrum Availability: Available spectrum is less than 40% as compared to European nations and 50% as compared to China.
  • Low Broadband Penetration: Low broadband penetration in the country is a matter of concern. As per white paper presented on broadband at the last International Telecommunication Union (ITU), broadband penetration in India is only 7%.
    • Over the Top (OTT) applications such as WhatsApp, OLA and so on do not need permission or a pact with a telecommunications company. This hampers the revenue of telecommunication service providers.
  • Huge fluctuations in the duties on Telecom Equipment which contribute to connecting the whole system from the central server to the consumer.

Way Forward

• The telecom sector in India has to deal with various challenges like maintaining a sufficient spectrum and adopting new technologies faster to be able to use the new features and techniques to serve the customers with better and feature-rich service.
• The Draft Telecommunication Bill 2022 addressed these challenges and is open to discussion which would further lead to a comprehensive policy regarding the future of telecommunications in India.

Opening stance 

Why in News?

Recently, the Australian Parliament approved the India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA).

What is Ind-Aus ECTA?

• It is the first Free Trade Agreement (FTA) that India has signed with a major developed country in over a decade.
• The Agreement encompasses cooperation across the entire gamut of bilateral economic and commercial relations between the two friendly countries, and covers areas like:
  • Trade in Goods, Rules of Origin
  • Trade in Services
  • Technical Barriers to Trade (TBT)
  • Sanitary and Phytosanitary (SPS) measures
  • Dispute Settlement, Movement of Natural Persons
  • Telecom, Customs Procedures
  • Pharmaceutical products, and Cooperation in other Areas
• ECTA provides for an institutional mechanism to encourage and improve trade between the two countries.
• The ECTA between India and Australia covers almost all the tariff lines dealt in by India and Australia respectively.
• India will benefit from preferential market access provided by Australia on 100% of its tariff lines.
• This includes all the labour-intensive sectors of export interest to India such as Gems and Jewellery, Textiles, leather, footwear, furniture etc.
• On the other hand, India will be offering preferential access to Australia on over 70% of its tariff lines, including lines of export interest to Australia which are primarily raw materials and intermediaries such as coal, mineral ores and wines etc.
• Under the agreement, Indian graduates from STEM (Science, Technology, Engineering and Mathematics) will be granted extended post-study work visas.
• Australia will also set up a programme to grant visas to young Indians looking to pursue working holidays in Australia.
• Annual Visa quota of 1800 is to be instituted for India Yoga teachers and Chefs.
• It is also estimated that 10 lakh jobs will be created as a result of ECTA.

How has been the India- Australia Relation so far?

• India and Australia enjoy excellent bilateral relations that have undergone transformational evolution in recent years, developing along a positive track, into a friendly partnership.
• This is a special partnership characterised by shared values of pluralistic, parliamentary democracies, Commonwealth traditions, expanding economic engagement, long standing people-to-people ties and increasing high level interaction.
• The India-Australia Comprehensive Strategic Partnership initiated during the India-Australia Leaders’ Virtual Summit held in June 2020 is the cornerstone of India-Australia multi-faceted bilateral relations.
• Growing India-Australia economic and commercial relations contribute to the stability and strength of a rapidly diversifying and deepening bilateral relationship between the two countries.
• India and Australia have been each other’s important trading partners.
• Australia is the 17^th largest trading partner of India and India is Australia’s 9th largest trading partner.
• India-Australia bilateral trade for both merchandise and services is valued at USD 27.5 billion in 2021.
• India’s merchandise exports to Australia grew 135% between 2019 and 2021. India’s exports consist primarily of a broad-based basket largely of finished products and were USD 6.9 billion in 2021.
• India’s merchandise imports from Australia were USD 15.1 billion in 2021, consisting largely of raw materials, minerals and intermediate goods.
• India and Australia are partners in the trilateral Supply Chain Resilience Initiative (SCRI) arrangement along with Japan which seeks to enhance the resilience of supply chains in the Indo-Pacific Region.
• Further, India and Australia are also members of the QUAD grouping (India, the US, Australia and Japan), also comprising the US, and Japan, to further enhance cooperation and develop partnership across several issues of common concern.

Way Forward

• The India-Australia ECTA will further cement the already deep, close and strategic relations between the two countries and will significantly enhance bilateral trade in goods and services, create new employment opportunities, raise living standards, and improve the general welfare of the peoples of the two countries.
• Both India and Australia share a vision of a free, open, inclusive and rules-based Indo-Pacific region and cooperative use of the seas by adherence to international law including the United Nations Convention on the Law of the Sea (UNCLOS) and peaceful resolution of disputes rather than through unilateral or coercive actions.