US telecom industry urges India to reevaluate policies

Washington, Oct 5 (PTI) The US telecom industry has urged
the Indian government to reevaluate its policies with regard
to capitalisation requirements and application fees for
telecom licences as they reduce the amount of resources
available to service providers for building their networks.
"TIA urges India to reevaluate the basis for license
application fees, capitalisation requirements and bank
guarantees as it applies to telecommunications service
provider licences," the Telecommunications Industry
Association (TIA) said in a memorandum submitted to the US
Trade Representative (USTR).
TIA, which is the top-most industry body of America's
telecommunications sector and is deeply interested in the vast
potential being offered by India in this field, said as a
general matter, application fees should reflect the cost of
processing an application.
"While bank guarantees are appropriate in limited cases,
such requirements should reflect the scope of business
intended to be offered and should be a temporary, not
permanent requirement," it said.
"India should seek to reduce high licencing fees and
capitalisation requirements as they reduce the amount of
resources available to service providers to invest in building
out their networks and connecting India's vast population,"
the TIA said.
In its letter, dated October 3, TIA also urged the US
government to continue to engage with India on the
government's proposed policy related to in-country security
assurance testing and facility inspection and black-listing of
foreign telecom products on account of security concerns.
TIA said it is very concerned over the discriminatory
policy proposals that India is contemplating, which are aimed
at increasing manufacturing and innovation in the ICT sector
and that this signals a reversal of the generally open-market
and pro-competitive policies India has taken in this sector.
"In addition to the negative consequences for meeting
India's ICT connectivity goals and hampering its ability to
benefit from global collaboration, these policies run counter
to India's longstanding international trade commitments under
the WTO, its national treatment obligations under the GATT,
and its G20 pledge in 2008 not to increase barriers to trade,"
TIA said.
Non-discriminatory, technology-neutral and
incentive-based
policies are preferable to discriminatory policies that favour
one producer over another, it said.
It also expressed its opposition to the Planning
Commission's draft proposal for 30 per cent of all electronic
procurements by the government be reserved for domestically
manufactured products.
"If implemented, this policy will undermine the country's
ability to innovate, will impose discriminatory and
unrealistic requirements on companies seeking to sell to the
Indian government, will increase the Indian government's own
costs by restricting procurement options and will violate
critical commitments that the government of India has made to
resist trade and investment protectionism," the TIA said.
TIA noted that despite the global economic slowdown,
India continues to be one of the world's fastest growing ICT
markets.
Since 2006, India's total wireline and wireless telephone
subscribers have increased from approximately 164 million to
over 846 million, representing almost 416 per cent growth in
five years.
The number of people with broadband internet connections
(> 256 kbps) has grown by over 500 per cent since August,
2006, to over 11 million subscribers, yet the number of
connections remains low relative to the population. PTI LKJ
MNS