"Affordability of the consumers is the core of our policy," Communications Minister Kapil Sibal said after a cabinet meeting chaired by Prime Minister Manmohan Singh approved the National Telecom Policy (NTP) 2012.
"Target is one nation full mobile number portability and work towards one nation free roaming."
The minister said the new policy will replace the older regulation which has been in effect for more than 12 years now and provide a predictable and stable policy regime for a period of nearly 10 years.
The policy envisions providing a "secure, reliable, affordable and high quality converged telecommunication services anytime, anywhere for an accelerated inclusive socio-economic development".
The policy will be operationalised by bringing out detailed guidelines, as may be considered appropriate, from time to time.
It envisages increasing penetration of telecom services in rural area from current level of around 39 to 70 percent by 2017 and 100 per cent by the year 2020.
Broadband speed has also been increased to minimum of 2 megabit per second (mbps). This change will come into force with immediate effect.
Also, under the new policy, licences will be delinked from spectrum which has been bundled with the licences so far.
The NTP 2012 will also allow operators to provide services based on any technology by using airwaves and will not restrict them to use it for particular service using any specific frequency band.
At present, there are frequencies which are specifically used for providing GSM or CDMA services as per the permit given to the companies.
There are five changes in the policy compared to the draft policy that was released last year. These changes are related to revenue generation objective, Spectrum Act and TRAI Act.
The policy favours encouraging domestic manufacturing of telecom equipment.
"Till the time we will not set up industry here... India will not be able to become global. It is very important because along with this prices of device will also come down," Sibal said.
"Spectrum Act has been deleted as a policy matter we don't intend to have a spectrum act any more," he said.
On giving more power to TRAI, the cabinet decided that policy making function would remain with government and the regulator will not make policy.
The cabinet also substituted the point which mentioned "direct revenue generation" as secondary objective of new policy with "availability of affordable and effective communication for the citizens is at the core of the vision and goal of NTP 2012" at two places.
The government has also replaced a sentence related to spectrum allocation to migrate its users to different frequency bands to make way for services based on new technologies.
Sibal said that any major changes in the policy in future will be brought to the cabinet for approval.
The union cabinet also approved introduction of unified licence and authorised the Department of Telecommunications to finalise the new unified licensing regime with the approval of minister of communications and IT.