Clear norms allow telcos to work efficiently

NEW DELHI, INDIA: Telecom operators would be able to function more efficiently if there is clarity in regulatory and tax issues, a study said Wednesday.

It urged the government to focus on domestic manufacturing of telecom equipment in its new telecom policy as the market is dominated by foreign players.

"Clarity on tax related and regulatory issues could reduce massive litigations in this (telecom) sector and would thereby free operators to focus on their core business activities," said the report,NTP (national telecom policy) 2011: A pragmatic view of the road ahead, by consulting firm Deloitte.

The study said while the policy aims to bridge digital divide between rural and urban population there were several political and regulatory and technological challenges, including substantial manufacturing base, lack of skilled workforce and absence of research and development.

"Telecom equipment market is dominated by foreign players with hardly any presence of domestic players," said the study.

As per Ovum analysis, the total demand for telecom equipment including handsets for 2009-10 was Rs.547 billion while it is projected to be about Rs.1,080 billion in 2015-16.

According to the Boston Consulting Group, the current size of the telecom equipment market in India is around Rs.3,000 billion.

The study also said despite the government and the industry being critically dependent on telecom networks to support commerce in all major economic sectors, telecom security has not been able to keep pace with these advancements.

"Telecom security is becoming more vulnerable to security breaches and has posted fresh challenges in network security,communication security, and communication assistance to law enforcement agencies."