Centre for Internet & Society

The New Telecom Policy, 1999 was formulated on the basis of the report of Group on Telecommunication. The Government, constituted a high level Group on Telecommunication (GoT) to review the existing telecom policy i.e., the National Telecom Policy, 1994. The main reason for a new telecom policy was that the goals of the National Telecom policy, 1994 were not achieved within the stipulated time period and on the other hand there was immense growth in information and communication technology, this led to the need for a change in the telecom policy.


The objectives of the New Telecom Policy, 1999 were:

  • Access to affordable and effective means of telecommunication for all citizens. Strike a balance between universal services to all uncovered areas and high level services.
  • Encourage development of telecommunication facilities in remote, hilly and tribal areas of the country.
  • Formation of a modern and efficient telecommunication system based on convergence of IT, media, telecom and consumer electronics to propel India into becoming an IT superpower.
  • To alter PCO’s, wherever justified into Public Tele-info Centres having multimedia capability like ISDN services, remote database access, government and community information systems etc.
  • Strive to transform in a time bound manner a competitive telecommunication system in both rural and urban areas.
  • Achieve efficiency and transparency in spectrum management. Protect the defence & security interests of the country. Enable Indian Telecom Companies to become truly global players.
  • Encourage research and development efforts in the country.

Targets of the New Telecom Policy, 1999

  • Access to telephone on demand by the year 2002 and sustain it thereafter to achieve a tele density of 7 by the year 2005 and 15 by the year 2015.
  • Encourage development of affordable telecommunication system in rural areas and making rural communication mandatory for all fixed service providers
  • Provide reliable transmission media in all rural areas and increase the rural tele-density from the current level of 0.4 to 4.0 in 2010.
  • Make available internet access to all district headquarters by the year 2000.
  • Access to high speed internet and multimedia capabilities using ISDN to all towns with a population over 2 lakh by the year 2002.

New Category of Service Providers

The New Telecom Policy, 1999 strived to create an environment which would enable a continued attraction of investment in the telecom sector and also enhance creation of technological infrastructure by leveraging technological development. Categorisation of services as per the National Telecom Policy, 1999:

  1. Cellular Mobile Service Providers (CMSPs),
  2. Fixed Service Providers (FSPs) and Cable Service Providers, collectively referred as ‘Access Providers’;
  3. Radio Paging Service Providers;
  4. Public Mobile Radio Trunking Service Providers;
  5. National Long Distance Operators;
  6. International Long Distance Operators;
  7. Other Service Providers;
  8. Global Mobile Personal Communication by Satellite (GMPCS) Service Providers;
  9. V-SAT based Service Providers

Restructuring of the Department of Telecommunication (DoT)

Before the 1999 Policy, licensing, policy making and the service provision functions were under the purview of DoT. The Policy indicated that the Government will separate the policy and licensing functions of the DoT from the service provisioning function of it. It also stated that corporatization of DoT will take place by the year 2001 after keeping in mind the interest of all the stakeholders.

It also envisaged that all the future relationships between DoT and MTNL and BSNL will be based upon best commercial principles.

Spectrum Management

The Policy noted that with the introduction of new technologies into the market the demand for spectrum has increased. It also recognized the need for utilizing spectrum efficiently, economically, rationally and optimally. Under the Policy, the Government intended to revise the National Frequency Allocation Plan. The allocation plan would be in conformity with the International Telecommunication Union (ITU) regulations.

Universal Service Obligation Fund (USOF)

Under the Policy the Policy the Government planned to achieve certain targets to provide basic telecom services at an affordable and reasonable price. The objectives were:

  • Provide voice and low speed data service to the balance 2.9 lakh uncovered villages in the country by the year 2002
  • Achieve Internet access to all district head quarters by the year 2000
  • Achieve telephone on demand in urban and rural areas by 2002

The resources and funding for the USOF will be realised from a universal access levy which would be a percentage of the revenue earned by the service providers under the different licences. This will be fixed in consultation with the Telecom Regulatory Authority of India (TRAI).

Role of Regulator

The Policy clarified the role of TRAI in the telecom sector. This was done with regard to the problem where the DoT refused to accept the TRAI’s jurisdiction over some legal questions. The Policy expressly mentions that TRAI is envisioned to be an independent regulator with comprehensive powers. It stated that TRAI has the authority to hear disputes regarding telecommunication and also issue directives to the Government.

The Policy also clarified that the Government will invariably take into consideration TRAI’s recommendation with respect to licensing issues. It also completely ruled out any possibility of delegation of the Government’s licensing and policy making powers as they are essential sovereign functions that cannot be delegated. The Policy also specified regulatory and advisory assignments for TRAI. It would be responsible for formulating regulatory details, licensing conditions and various guidelines with respect to different classes of service providers.

Other Mandates of the Policy

The Policy addresses the issue of standardization. In order to establish integrated telecommunication network and common standards with respect to telecom equipment and services, Telecommunication Engineering Centre will set standards.

The Policy promotes the indigenous manufacturing of telecom equipment for domestic use as well as for export. The Policy also emphasizes on development and training of human resources for all fields related to telecommunications. It also recognizes telecommunication as the prerequisite to development of other technologies. It also ensures that the telecom industry should adequately invest in research and development.

Amendment to the New Telecom Policy, 1999

On 11th November, 2003, an addendum was added to the New Telecom Policy, 1999. The addendum introduced the Unified Licence for telecommunication services which would allow the licensees to provide all telecommunication/ telegraph services covering various geographical areas using any technology.

It also introduced a licence for Unified Access (Basic and Cellular) services which would a licensee to provide basic and/or cellular services using any technology in the define service area.

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