COMMUNICATIONS, IT & POSTS

TELECOM

The telecommunication sector continued to register significant success during the year and has emerged as one of the key sectors responsible for India’s resurgent India’s economic growth. The sector, which was growing in the range of 20 to 25 per cent up to the year 2002-2003 has moved to a higher growth path of an average rate of 40-45 per cent during the last two years. This rapid growth has been possible due to various proactive and positive decisions of the Government and contribution of both by the public and the private sector.

On the eve of completion of two years, India has crossed 146 million mark in terms of number phones. Thus, the country is the fifth largest network in the world after China, USA, Japan and Germany. The Department of Telecom (DoT) has set for itself a target of providing 250 million telephone connections by the year 2007 (a teledensity of 22 %) as against a teledensity target of 15 by the year 2010 envisaged in NTP-1999. DoT is in the process of achieving the same.

One India

Keeping in view the Government’s commitment to provide low cost and affordable telephone services to the common man of India, Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) launched “One India Plan”. “One India” scheme, the brainchild of the Minister of Communications & Information Technology was launched with a view to connecting India at an affordable tariff throughout the length and breadth of the country. In consonance with his vision, the new Plan will enable the customers of BSNL and MTNL to call from one end of the India to the other, either from Kashmir to Kanyakumari or from Dwarka to Dimapur at the cost of Re.1.00 per minute, anywhere, any time to any phone . This has marked the death of distance and STD.

Network Expansion

The potential to expand telecom network in India is immense, as our tele-density is only about 13.02% as against more than 100% in all the above-mentioned countries except China (55%). The demand has already saturated in the developed countries, and India is bound to surpass them within next 4-5 years. It is evident from the fact that the future growth would be in the mobile segment with a substantial contribution of both public and private sector. It is expected that of the targeted additions of about 100 million phones by December 2007 (total 250 million phones by Dec. 07), a significant share would come from BSNL/MTNL. BSNL has floated the tender for procurement of 63.5 million additional mobile lines. The Project for release of 45 MHz spectrum from Defence for growth of mobile services has been launched. This additional spectrum is likely to be made available in the beginning of the year 2007. The Project for sharing of infrastructure by mobile operators has been launched in Delhi and Mumbai. This would facilitate sharing of passive and active infrastructure and network operating expenses.

Rural Telephony - Bharat Nirman

As far as Rural Telephony is concerned, improving connectivity has been high on priority of DoT. Telecom connectivity has a crucial role to play in building the infrastructure for a modern India. To bridge the digital divide between rural and urban areas, the concept of Universal Service Obligation (USO) has been enunciated to provide access to basic telecommunication services to people in rural and remote areas at affordable and reasonable prices. Under the Bharat Nirman Programme 66,822 revenue villages in the country, which have not yet been provided with a Village Public Telephone (VPT), shall be covered by November, 2007. Villages with population less than 100 and those affected with insurgency are not covered under the scheme. 14,813 remotely located villages will be provided VPTs through Digital Satellite Phone Terminals (DSPTs). The technology utilized for the remaining 52,639 villages shall be predominantly WLL i.e. Wireless in Local Loop. Assistance for capital expenditure as well as operational expenditure for these VPTs will be provided. It will be the endeavour of the USO Fund to complete this component of the Bharat Nirman Programme as expeditiously as possible and in any case before November, 2007. An estimated sum of Rs. 451 crore would be incurred to provide subsidy support for these VPTs. The entire funding shall be met out of the USO Fund and no separate allocation from the Government would be required.

The Cabinet has also approved introduction of a Bill in Parliament to amend the Indian Telegraph Act, 1885. This has been done with a view to cover cellular services, in addition to basic telegraph services within the scope of the Universal Service Obligation (USO) Fund for faster expansion of telecommunication services in rural areas.

25000 VPTs have been provided as on 30th April 2006 and efforts are being made to complete the target in 2006 itself. Other steps towards this direction include signing agreements for providing Rural household Lines (RDELs) in 1,685 commercially unviable Short Distance Charging Areas( SDCAs). 46,253 Rural Community Phones (RCPs) will be provided in villages with population exceeding 2000 and without a Public phone facility other than a VPT. As on 30th April 2006, 24,000 RCPs have been provided. More than 4,00,000 RDELs have been provided so far; Scheme for sharing of infrastructure for enhancing rural mobile penetration is in advance stage of finalization. To facilitate speedy rural penetration entry handsets with a price-tag of Rs. 1700 have been launched. Efforts are on to make it available at about Rs 1000. Villages with population more than 5000 are planned to be provided with mobile coverage by September 2006 & villages with population more than 2000 by March 2007.

Broadband

In the area of broadband connectivity, a well laid out new broadband policy was announced in October, 2004 with a vision of covering 20 million broadband subscribers by the end of 2010. Nation-wide Broadband Services were launched by BSNL & MTNL wef. 14.1.2005 to cover 200 towns in one year. The spread now covers 300 towns with about one and half million connections given out of which share of BSNL/MTNL is 70%. To encourage expansion of broadband connectivity at a faster pace, both outdoor and indoor usage of low power Wi-fi and WiMax systems in 2.4 GHz– 2.4835 GHz band has been delicensed. The use of low power indoor systems in 5.15 - 5.35 GHz & 5.725 - 5.875 GHz has also been delicensed.

Licensing Liberalisation

FDI Ceiling was increased from 49 per cent to 74 per cent in the telecom sector. Licence fee for NLD, ILD, IP-II, VSAT commercial and ISP with internet telephony (restricted) licences was reduced to 6% of AGR w.e.f. 1st January 2006. Entry fee for NLD was reduced to Rs. 2.5 Crore from Rs. 100 Crore. Entry fee for ILD was also reduced to Rs. 2.5 Crore from Rs. 25 Crore. Lease line charges were reduced to make the bandwidth available at competitive prices to facilitate growth in IT enabled services. In the case of states having two telecom circles e.g. Tamilnadu, Maharashtra, U.P and West Bengal, calls made between Chennai and rest of Tamil Nadu, Mumbai and rest of Maharashtra, Kolkata and rest of West Bengal and Andaman & Nicobar and UP East and UP West service areas treated as Intra service area calls. NLD service providers are permitted to access the subscribers directly for provision of leased circuits/closed user groups and can provide last mile connectivity. The ILD service providers can also access the subscriber directly only for provision of leased circuits/closed user groups. Access service providers are allowed to provide Internet telephony, internet services and broadband services.

Boost to investment and manufacturing activities

Ericsson has set up GSM Radio Base Station Manufacturing facility in Jaipur. Elcoteq has set up handset manufacturing facilities in Bangalore. Nokia set up its manufacturing plant in Chennai. LG Electronics set up plant of manufacturing GSM mobile phones near Pune. Ericsson recently launched their R&D Centre in Chennai. Flextronics setting up an SEZ in Chennai. Two more SEZ in telecom sector in advance stage of approval. Proposals implemented/under implementations of US$ 620 million in telecom sector. Major companies like Flextronics, Motorola, Foxconn, Aspocomn etc., decided to set up their manufacturing bases with an investment of about US$ 650 million. Revival of Indian Telephone Industries (ITI) started with the revival plan of Rs. 1025 crore. GSM equipment manufacturing started at ITI plants at Mankapur and Rae Bareli with technology partnership of Alcatel, France. No custom duty shall be levied on all import of component and raw materials required for manufacturing telecom equipment including Custom duty on all 217 ITA-1 items to boost manufacturing sector. Mobile phone components exempted from 4% CVD.

AMD signed a “milestone agreement” with SemIndia to bring semiconductor manufacturing facilities to India. It envisages an investment of US$3 billion over four years. Microsoft Corp to invest US$1.7 billion in India over four years. Intel announced their investment plan of more than US$1 billion in five years. CISCO to invest US$1.1 billion including US$750 million for an R & D centre.

Telecom & IT sector is expected to attract US $ 10-11 billion in next 2-3 years. While Telecom manufacturing sector is expected to attract about US $ 1.5-2 billion, Telecom services sector is also expected to attract US $ 2-3 billion.

INFORMATION TECHNOLOGY

National Plan on e-Governance

The National Common Minimum Programme adopted by the Government accords high priority to improving the quality of basic governance and in that context has proposed to promote e-Governance on a massive scale in areas of concern to the common man. Accordingly, a National e-Governance Plan (NEGP) has been drawn up covering 26 Mission Mode Projects and 8 support components to be implemented at the Central, State and Local Government Levels.

The objective of this Plan is “Making all Government services accessible to the common man in his locality, throughout his life through a One-stop-shop (integrated service delivery) ensuring efficiency, transparency and reliability and at affordable costs to meet the basic needs of the common man”. The National e-Governance Plan has been approved by the Government.

State Wide Area Networks (SWANs)

The Government has approved a scheme for the establishment of State Wide Area Networks (SWANs) at a total outlay of Rs.3,334 crore over a period of 5 years. These SWANs will extend data connectivity of 2 Mega bits per second up-to the block level in all States and Union Territories in the country. The block level nodes in turn, will have a provision to extend connectivity further to the village level using contemporary wireless technology. An amount of Rs. 315.30 crore has been released under the scheme as first installment to 22 States/UTs.

Common Service Centres (CSCs)

The Department has formulated a proposal to establish 100,000 Common Services Centres (CSCs) in rural areas, which will serve not only as the front end for most government services, but also as a means to connect the citizens of rural India to the World Wide Web. CSCs would extend the reach of electronic services, both government and private to the village level. Various government departments have been advised to design and evolve their Mission Mode Projects laying adequate emphasis on Services and Service levels in respect of their interface with citizens and businesses. These advances in ICT technologies will enable us to take concrete steps towards turning our dream of ‘government at your doorstep’ into a reality.

Capacity Building

The nature and scale of e-Governance initiatives planned in the domain of the State Governments would entail major managerial and technological challenges. This necessitates Capacity Building both at Programme level and Project level in States. The Department in consultation with the Planning Commission has prepared the Capacity Building Guidelines and issued to all States and Union Territories (UTs). The State Governments have been advised to prepare the proposal for Capacity Building implementation. Orientation programme, training and workshop have been arranged for key States representatives and personnel.

The Planning Commission has allocated funds as Additional Central Assistance (ACA) to all the States for taking up Capacity Building measures as a first step towards NeGP.

National Electronics/IT Hardware Manufacturing Policy

The Government has set up a National Manufacturing Competitiveness Council (NMCC) to provide a continuing forum for policy dialogue to energize and sustain the growth of manufacturing industry including IT Hardware. The Department of Information Technology has been in discussion with the NMCC and has proposed a package of incentives needed for the growth of Electronics/IT Hardware sector, which has been submitted to the NMCC. A Task Force has been set up in the PMO for its implementation.

The Government has prepared a Draft Policy for Investments for setting up semiconductor fabrication and other micro and nano technology manufacture industries in India which has been submitted to the Department of Economic Affairs.

As a result of the efforts taken by the Department, India has become a major destination for FDI investments in Information Communication Technology sector. World leaders in ICT like Intel, Cisco, SemIndia-AMD, Microsoft, Motorola, Ericsson, Nokia, Kyocera, Siemens, LG, Samsung, etc., have announced large investment plans for India in hardware manufacturing or chip design or R&D or to develop software products.

PC Penetration

One of the major initiatives of DIT was to increase PC penetration. The Department had discussions with various computer manufacturers to roll out sub Rs. 10,000 fully loaded computer. Several manufacturers have launched their low cost PC at a price below Rs. 10,000 during 2005.

Indian Language Technology

As a landmark in the series of release of Software Tools and Fonts in various Indian languages that are contemplated, the DIT made available free tools and fonts, developed by C-DAC (Centre for Development of Advanced Computing) an autonomous scientific society under the Administrative Control of DIT, to the public distribution upon registration on the designated website.

It has released in the public domain, various Tamil language fonts, e-mail client, Optical Character Recognition (OCR) software, spell checker and dictionary in April 2005. Similarly the Hindi and Telugu software tools and fonts were released in June 2005 and October 2005, respectively. Software tools and fonts in Punjabi and Urdu are ready for release. All Indian languages are expected to be covered in the next one year. To give a push to the development and deployment of the Indian language in information technology, a Committee headed by the Secretary, DIT has formulated a Road-map which is presently under implementation.

IT for Productivity

A Plan of Scheme for increasing usage of ICT tools for productivity enhancement has been approved by the Department. The Department has released an advertisement in leading national newspaper for request to register ICT products/tools, which can be used to enhance productivity in various sectors of economy. 83 proposals have been received from software developers/vendors. The details of these developers/products have been compiled and is being updated on the Department web-site. The methodology to introduce these products in the SMEs is being examined in consultation with the vendors.

Internet Promotion


In January 2005 DIT and National Internet Exchange of India (NIXI) set up state-of-the art hardware and software and relaunched the .IN Registry. The opening of the .IN Registry has significantly improved and broadened the availability of the domain names. The .in Internet domain name registration has crossed 1,77,000 during the month of April 2006.

Four Internet Exchange Nodes have been set up and made operational at Noida (Delhi), Mumbai, Chennai and Kolkata, and as many as 40 ISPs have been connected with these nodes.

Setting up Root Servers

The Department of Information Technology and National Internet Exchange of India (NIXI) has installed three mirror Internet root servers at Delhi, Mumbai and Chennai. The root servers form a critical part of the global Internet infrastructure. Delhi, Mumbai and Chennai are having K, I and F root servers, respectively. The installation of these root servers in the country will help in reducing the expensive international bandwidth load, increase the internet resilience by bringing down our dependency on root servers abroad and improve host name resolution from hundreds of millisecond to under-ten millisecond.

Internet Protocol Version 6 (IPv6)

Keeping in view the global trends in IPv6, the Department of Information Technology took the initiative towards IPv6 transition and a National Roadmap for IPv6 implementation. It includes an awareness building programme, research and development, test bed projects on IPv6 migration and deployment by Network providers. In India, IPv6 has been deployed in the ERNET and Sify networks.

Review of Information Technology Act

An Expert Committee on Information Technology Act was set up to review the IT Act and propose appropriate amendments in the light of national and international developments post IT Act 2000. Based on the recommendations of the Committee, the amendments to the IT Act have been finalized. Ministry of Law and Justice has already drafted the Bill. The amendments will be put up to the Parliament very shortly.

Community Information Centres

To reduce the digital divide by providing internet access and IT enabled services to the community at large and to facilitate citizen interface with the Government, the Department has set-up 112 Community Information Centres (CICs) in Jammu and Kashmir. Another 23 CICs in J&K will be made operational by July 2006. CICs are also being established in the government schools in Andaman and Nicobar Islands (41 CICs) and Lakshadweep Islands (30 CICs) for imparting Information and Communication Technology (ICT) based education.

e-Procurement

e-procurement solution is being implemented in the National Informatics Centre (NIC) with a plan to extend it to other Government Departments/Organizations in stages. The solution caters to business processes beginning with end-user request, moving on to indenting and then tendering/purchasing activities and finally culminating in Award of Contract / Purchase Order. It includes approval of workflow at different stages, supplier enablement to facilitate the business users, integration with multiple payment gateways, digital signing & encryption and provisions for secure audit.

Research and Development

A national facility for electromagnetic Interference (EMI) and Electromagnetic Compatibility (EMC) evaluation of electronic equipments and systems, first of its kind in India and third in South East Asia, was set-up at Chennai. The facilities would help in promoting the acceptance of Indian electronic products in the International market.

The Government has approved a joint project for setting up Nanoelectronics Centres at the Indian Institute of Science, Bangalore and the Indian Institute of Technology, Bombay with a total outlay of Rs.99.80 crore over a period of five years.

POSTS

To attune itself to the working in a competitive and liberal environment, the Department of Posts (DoP) has proposed a Draft Indian Post Office (Amendment) Bill, 2006 to liberalize the mail industry, encourage competition, bringing qualitative improvements in the postal service through out the country with prime focus on safeguarding the interests of consumers of mail services irrespective of the fact that the services are provided by DoP or any private courier company. The postal services in the country are governed by more than a century old statute viz. Indian Post Office Act, 1898. Recent developments in the field of Communications and Information Technology have transformed the perceptions and expectations of the consumers and have thrown challenges and opportunities before the postal operators across the world including India. The DoP has hosted the Draft Indian Post Office (Amendment) Bill 2006 on its website and invited views and suggestions from the General Public.

With a view to introduce new products and services to increase the business volumes and revenue, the Department of Posts has launched Direct Post for distribution of advertising material by the Post Offices. Direct Post is the un-addressed component of Direct Mail, and would comprise of un-addressed postal articles like letters, cards, brochures, questionnaires, pamphlets, samples, promotional items like CDs/floppies and Cassettes etc., coupons, posters, mailers or any other form of printed communication that is not prohibited by the Indian Post Office Act 1898 or Indian Post Office Rules 1933. The Direct post articles can be sent only within India.

Logistics Post Service was introduced in Maharashtra, Rajasthan, Tamilnadu, Kerala, Karnataka, Gujarat, West Bengal, Jharkhand, Andhra Pradesh, Assam and Uttaranchal. This service will be extended to other parts of the country also. Speed Post Gold Service introduced between business districts of Delhi and Mumbai in February 2006 assures the next day forenoon delivery, automatic refund in the case of delay, electronic proof of delivery on e-mail/SMS and specialized arrangements for collection, transmission and delivery.

Finance Marts opened in selective post offices in the country which, in addition to providing small savings facility to the Public, will advise investors and accept their investments for further investing in the products of their choice. With the setting up of Finance Marts in these select Post Offices, all the activities of investment schemes and transactions can be done under roof. Presently, there are 142 Postal Finance Marts in the country. On-line domestic money transmission service called iMO was introduced to assure speed in delivery of money. Metro Mail operations streamlined and geared up at seven Metros namely Delhi, Bangalore, Mumbai, Chennai, Hyderabad, Karnataka and Ahmedabad

Accidental Death Insurance at a very low premium of Rs.15/- is provided by Oriental Insurance Company (OIC) for a policy of Rs. one lakh for one year – for Savings Bank account holders on request basis. This is an add-on product to the products already provided by OIC for sale from post office and this is a step in the direction of providing value addition to Post Office Savings Bank customers.

A new Postal Life Insurance Policy called the Children Policy was introduced in January 2006 to provide insurance cover to the children of the policyholder.

The Senior Citizen Saving Scheme (SCSS) – 2004 mobilized Rs. 8775 cores in 2004-05. India Post has shown its versatility by giving value additions to the Senior Citizens through payment of interest by cash, credit into their POSB accounts and by Money Order.

The Cabinet Secretariat constituted an Inter-Ministerial Group (IMG) in May, 2005 to study the existing activities of the Department of Posts and to recommend various steps required to eliminate the financial deficit. The report of the IMG will be available by the end of May 2006.