The Telegraph
Since 1st March, 1999
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Telecom selloff line cut

New Delhi, May 26: State-owned telephony majors — Mahanagar Telephone Nigam and Bharat Sanchar Nigam — will not be privatised.

“MTNL and BSNL are off the divestment list. I have an abiding interest in this sector and also have a reasonable familiarity with it,” said communications and information technology minister Dayanidhi Maran who assumed office today.

The minister said the government would not offload its stake in Bangalore-based ITI, the state-owned company that makes telecom equipment.

Maran also said he would take a fresh look at the proposal to raise the limit on foreign direct investment in the telecom sector from 49 per cent to 74 per cent.

“I cannot say that FDI is not needed but we need to look at a welter of issues,” he said, adding that he would hold consultations with the finance ministry in this regard.

The telecom companies have been pushing for a relaxation in the FDI limit which, they feel, severely circumscribes their ability to expand operations.

The minister said he would be cobbling plans to revamp the telecom policy in order to achieve two objectives: reduce the cost to customers and double teledensity.

“I am confident that teledensity (which hovers around 7 per cent) can be doubled in the next two to three years,” he said.

Maran said the move to tweak the telecom policy would be designed to take advantage of the latest technological advances and ensure that the facilities available in India were truly world class.

The minister also emphasised that his ministry would focus on development of telecom and IT in the rural areas and promised that 50,000 villages that had no phone links at present would get them this year.

In addition, villages with a huge population would be given internet access to get benefits like tele-agriculture, tele-health and tele-education.

“I would like to minimise the digital divide, if not remove it altogether. I believe that for the communications and IT facilities to be truly relevant in India, they will have to touch the lives of villagers,” said Maran.

He also said efforts would be made to force telecom operators to improve the quality of their voice and data services.

“The fault rates must come down significantly. I would like to see that the consumer interests are protected even as growth takes place. We must ensure that the quality of service, both in data and voice is truly world class,” said Maran.

The minister said the issue of convergence would be examined at the appropriate time since the issue had to be studied from different angles.

Maran promised that special emphasis would be given to growth of broadband services and assured that the government’s views on the issue would be made known soon.

The Telecom Regulatory Authority of India has already made its recommendations on broadband services. “We have a rich legacy of copper wire in this country and we need to move aggressively, making the best use of this resource, even as we introduce newer media such as the optic fibre. I shall be studying some of the recent recommendations in this regard,” said Maran.

He also emphasised the need to encourage the manufacture of telecom equipment by local companies. The minister was disappointed that while there has been a growth in the telecom service sector, the local manufacturers had not been able to get the benefit and foreign firms had grabbed the major share. Efforts would be made to promote indigenous manufacture.

Maran also stressed the need to promote research and development in the telecom sector.

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