India unveils draft telecoms policy Published duration 11 October 2011

image caption The use of mobile telephones has increased greatly in India

India has unveiled a draft telecoms policy, which reforms how mobile licences are sold and boosts consumer rights, the first such move since a corruption scandal rocked the sector.

The policy proposes to allow cellular carriers to share air waves and make mergers and acquisitions easier.

It also proposes to remove roaming charges on mobile phones and provide broadband on demand.

It comes after a multi-billion dollar scandal over the sale of 2G licences.

India may have lost as much as $39bn in revenue, a sum equivalent to the annual defence budget, the state auditor has said, when mobile phone frequency licences were allegedly sold for a fraction of their value.

Ministers and several top company executives have been arrested in connection with the so-called 2G case.

The new draft policy will "facilitate consolidation in the converged telecom service sector while ensuring sufficient competition," telecoms minister Kapil Sibal is quoted by media as saying when he announced the initiatives.

Analysts say that such "consolidation" will be welcomed in the troubled sector, which has seen stiff competition between mobile providers affect company performance and lead to an overcrowded marketplace.

India has the world's fastest growing mobile phone market, with about half-a-billion subscribers and it is thought to be the second largest mobile phone market in the world. It has 15 operators - compared to three in China.

The new policy also proposes to sell bandwidth at market-determined prices and plans to allow consumers to retain their mobile phone numbers across service providers and states.