India: TMT Flash - August 2013

Last Updated: 23 August 2013
Article by PSA

1. Two telecom security bodies for shielding telephone networks

TSD and NTNSCB will frame standards and procedures for testing network gear and monitoring implementation of the telecom security policy. While TSD will primarily coordinate work relating to security policy and project execution, NTNSCB will suggest ways to address telecom security issues in future and also monitor implementation of the new standards. India is also readying a cyber security framework, a cyber security policy and a National Cyber Coordination Centre that will monitor metadata on cyber traffic flows. In addition, Department of Telecommunications ("DoT") is working with other concerned departments to establish testing standards and procedures for telecom gear and has even sought approval of the National Information Board on the draft telecom security policy.

PSA view - Pursuant to the concerns raised regarding Chinese vendors, this step seems to be a logical step also because India is the largest market for network gears and should have proper policies to ensure the quality of products. Earlier the DoT had issued directive to mobile phone companies mandating them to use equipment deemed safe by an authorized lab in India from November 1, 2013.

2. The Right to Information (Amendment) Bill, 2013

The government has recently introduced in Lok Sabha, the Right to Information (Amendment) Bill, 2013. The Bill proposes to amend the section 2(h) of the Right to Information Act, 2005 ("Act") and introduces section 31 to this Act. Post amendment, the expression authority or body or institution of self-government established or constituted by any law made by Parliament shall not include any association or body of individuals registered or recognised as a political party under the Representation of the People Act, 1951. Further, the new section 31 says, that the amendment will apply notwithstanding anything contained in any judgment, decree or order of any court or commission and will prevail over any other law for the time being in force. The amendment comes in view of the June 3 order of the Chief Information Commissioner ("CIC") to include certain political parties within the ambit of the RTI Act as they were public authority within the meaning of the Act. But this is not the first time that the CIC has passed an order which includes bodies or organisations within the meaning of public authorities under the Act. Earlier, Public Health Foundation of India, Indian Olympic Association, Pension Trust, and Chandigarh Club were also interpreted as public authority within the meaning of the Act. Once approved, this amendment will retrospectively come into force from June 3, 2013.

PSA view - The citizen has right to seek information from a public authority under the Act.  The public authorities under the Act are required to designate Public Information Officer, who disseminates information to persons seeking the information under the Act. The Act has not only empowered the ordinary citizen but has also has enabled to unearth several scams. This amendment bill, if allowed, will not only weaken the spirit of the Act but would also trigger a debate as to who should qualify the definition of public authority within the meaning of Act.

3. Telecom sector received INR 587.82 billion FDI

The country's telecom sector has received a cumulative FDI of INR 587.82 billion from April 2000 till May 2013, which accounts for 7% of the total FDI inflows of the country. The FDI inflow in the telecom sector was INR 90.12 billion in the year  2011-12. However, FDI in the sector, which includes radio paging, cellular mobile, basic telephone services, plunged 81.64% in 2012-13 to INR 106.54 billion  mainly on account of economic slowdown and tough regulatory environment in the country. The telecom industry at present is facing a hard time and, according to an industry body's estimates, the telecom industry's total debt ballooned to INR 2500 billion during 2012-13, from INR 1850 billion  in 2011-12. A large part of the debt had been taken by companies to fund the purchase of expensive 3G bandwidth through auctions in 2010.

PSA view - The government has recently approved 100% FDI in the sector which would help the industry get fresh funds to lower financial burden. The enhancement of FDI cap is expected to facilitate capital inflows as well as ability of existing service providers to access lower cost financing. Also, to augment the FDI in the sector the government is formulating clear policy regime, National Telecom Policy, 2012, to create an investor friendly environment for attracting additional investments and to address policy and regulatory issues to improve the health of the telecom sector.

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