In recent news, the Universal Service Obligation Fund (USOF), a body under the Department of Telecommunications (DoT), has launched an innovative initiative known as the Telecom Technology Development Fund (TTDF) Scheme. The purpose of the USOF, which was originally constituted under the Indian Telegraph Act of 1885, is to enable digital connectivity in rural and remote areas. According to the draft telecom bill of 2022, the USOF will henceforth be identified as the “Telecommunication Development Fund.”
Objectives and Mechanisms of the TTDF Scheme
The TTDF Scheme seeks to promote research and development (R&D) in communication technology applications that are bespoke for rural contexts. Its chief ambition is to bring together academia, start-ups, research institutes, and the industry to construct and enhance the telecom ecosystem. Alongside this, the scheme also aims to encourage indigenous manufacturing, stimulate technology ownership, and cultivate a culture of co-innovation.
These objectives are likely to curtail imports while simultaneously opening up avenues for increased exports and the creation of intellectual property. In line with this, the USOF anticipates crafting standards to satisfy nationwide requirements and establish the ecosystem for a range of activities including but not limited to research, design, prototyping, use cases, pilots, and concept testing.
To support these objectives, the scheme plans to provide grants to Indian entities, fostering the emergence of indigenous technologies suited to domestic needs.
Current Status of India’s Telecom Sector
India’s telecom industry is the second largest globally, boasting a remarkable subscriber base of 1.17 billion people as of 2022. The country’s overall teledensity is measured at 85.11%, indicating the extent of penetration of telephone connections for every hundred individuals living within an area. The industry’s substantial growth over the past few years has primarily been driven by affordable tariffs, broader availability, the Mobile Number Portability (MNP) roll-out, expanding 3G and 4G coverage, and the changing consumption patterns of subscribers.
The Telecom sector has been ranked as the third largest in terms of Foreign Direct Investment (FDI) inflows, contributing 6.44% of total FDI. Its direct and indirect employment contributions are estimated at 2.2 million and 1.8 million jobs respectively. Over the years 2014-2021, the FDI inflows into the telecom sector surged by 150% to a colossal USD 20.72 billion from USD 8.32 billion during the period of 2002-2014. In a progressive move, 100% FDI is now permitted in the telecom sector under the automatic route.
By 2025, India is set to become the second-largest smartphone market worldwide with approximately 1 billion installed devices. Predictions also suggest that there will be 920 million unique mobile subscribers which will include 88 million 5G connections.
Regulatory Oversight in the Telecom Sector
In India, regulatory oversight for sectors like telecommunications, insurance, electricity, etc., is provided by independent bodies. This includes Standing Committees and Ad Hoc Committees set up by the Parliament. While Standing Committees are recurrent or appointed periodically and operate on an ongoing basis, Ad Hoc Committees are established on an as-needed basis and cease to exist as soon as they complete the task assigned.
For instance, the working of regulators within their respective departments may be reviewed by Ministry-specific Department Related Standing Committees. Similarly, Ad Hoc Committees set up by the Parliament may examine the working of regulators. The Finance Commission and NITI Aayog play advisory roles and do not review independent regulators, while the Financial Sector Legislative Reforms Commission (FSLRC) was formed to comprehensively review and restructure the legislations governing India’s financial system, without any role in reviewing the independent regulators.
