Opinion | One Step Forward, two steps back for telecom sector

Policy uncertainty is not good for investment, it is said. Yet, despite that caution, the Indian telecom sector has been the beneficiary of vast amounts of investments from both domestic and foreign sources. The magnitude of foreign investment in the telecom sector since the 1995 liberalization move stands at a whopping $40 billion. An alternative thought experiment will be to ask how much more the sector could have benefited from a robust and stable policy environment.

The National Telecom Policy (NTP) of 1994 acknowledged for the first time the need to create a world-class telecommunications infrastructure, and the centrality of private investment to achieve that aim. But inviting private investment without an independent regulator was flawed thinking. The Department of Telecommunications (DoT), which was the regulator, had also devised a regime that was skewed in its favour, and was essentially anti-private sector.