Don’t kill the telecom revolution

Don’t see telecom as a gigantic ATM that brings huge gains by revenue generation, but as the enabler of all-round economic growth and prosperity...

My family and I moved to Gurgaon from Delhi 14 years ago. I was advised at the time to not apply for a new telephone connection in Gurgaon — it would take years to get one. It would be smarter to apply for an OYT (Own Your Telephone) connection in Delhi, get it in a couple of years and then apply for its transfer to Gurgaon.

The transfer would be effected in less than a year’s time. Which is what I did. The first took about 24 months and the second seven months. The entire process took about 30 months and endless running around. Today, I could walk into the sales outlet of any among a host of different service-providers and walk out with a mobile connection.
Of all the myriad initiatives that go by the name of economic reforms, if there is one that has singly made the whole liberalisation process worthwhile for every Indian citizen, it is the opening up of the telecom sector. Nothing has revolutionised the way we work, live, play and learn the way telecom has. Nothing else has worked as well for the rich and the poor alike, not forgetting the middle class in between.
Thanks to the enlightened telecom policies adopted by successive governments and hyper competition between players, there are over 930 million mobile connections in the country today and users pay some of the lowest and most innovative tariffs for services in the world. Mobile telephony has energised the economy and given a fillip to social and family ties in ways and to a degree that are not fully comprehended or acknowledged by most of us. From sadhus to kabadiwallahs, from schoolchildren to senior citizens, from itinerant vendors to self-employed skilled workers, everyone uses mobile phones to stay in touch with whomever they need to.
But the best is yet to come. In voice, the rural market has barely been tapped. The growth in rural tele-density is a relatively recent phenomenon. Going beyond voice, mobile broadband (with any number of apps and services on 3G and 4G technologies) has the potential to very quickly usher in a second telecom revolution in the country. From farmers to students, from aam aadmi to businessmen, from housewives to professionals, everyone stands to profit from what will be on offer. Money transfer, retail, e-governance, entertainment, distance learning, farm aid, healthcare delivery — there is potentially no end to what can be accomplished on mobile, not to speak of wireline, broadband.
And yet, the telecom revolution is in danger of being killed if the government does not play its cards adroitly. Prompted by an auction-favouring Supreme Court, and aided by a market-insensitive regulator, the easiest thing to do now is to seek an immediate bonanza from the fees and charges and throw the baby out with the bathwater. The money will come in handy for the government to reduce the budgetary deficit. On the other hand, it could send the industry on a downward spiral.
Surely, the government does not want to kill the goose that lays the golden egg. The smartest thing to do would be to see telecom not as a gigantic ATM that brings huge gains by way of direct revenue generation, but as the great enabler of all-round economic growth and prosperity that brings in very substantial indirect revenues for years to come. According to one study, an increase of just one per cent in wireless broadband penetration could increase GDP by as much as Rs 162 billion in 2015. Clearly, the direct and indirect economic impact of wireless broadband, as with much else in telecom, is immense. Wisdom would, therefore, lie in doing nothing that will drive up industry costs or inhibit rollout.
If the political environment makes it difficult for the government to reject the telecom regulator’s (Trai) recommendation on spectrum pricing, it should adopt aggressively innovative ways of pricing and payment in order to mitigate the burden on operators. More importantly, it should optimise spectrum availability (which is far from the case now) and expeditiously adopt ways of spectrum management that are state-of-the-art. Some of these have already been recommended by the regulator. The most important of these is re-farming (which is jargon for redeployment or re-purposing), which will ensure that the most efficient use of spectrum is made. Re-farming will contribute very significantly in bridging the digital divide and promoting digital inclusion.
The government must discourage spectrum hoarding by putting in place a system of periodic spectrum audit to ensure that holdings are in line with the actual needs of the operators. It should also offer allotees the option to return spectrum that is not being used. Dynamic (as opposed to dedicated) spectrum allocation is another way to circumvent spectrum scarcity. There are more such technologies that can be inducted to maximise spectrum usage.
There is a reason why many countries of the world have recognised broadband as a fundamental right. It will be the basic wherewithal of the social and economic life of tomorrow. Can India afford to miss the bus? We will do so if policymakers do not move diametrically away from the mindset of the late C.M. Stephen who, as communications minister, had famously told Parliament in the early 1980s that telephones were a luxury and not a right!

The writer is a public affairs analyst.

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Even though I now live in

Even though I now live in Canada, I agree wholeheartedly with Vivek's suggestions. When I lived in Mumbai back in the 1980s, it took me Rs.5000 and 5 years to get a telephone connection under the OYT scheme!

A couple of months ago on a visit to India, I travelled by train from New Delhi to Jabalpur, Jabalpur to Mumbai, Mumbai to Ranchi and Ranchi to Kolkata and was astounded that there was mobile connectivity throughout: almost everyone in the train was constantly either on their mobile phones or surfing on their laptops via mobile internet services! Even Canada lacks that kind of connectivity!! India should be proud of what Sam Pitroda set in motion so many years ago.

When my friends call me from India they do not bat an eyelid as they dial out from their mobile devices....I dread to use my cellphone here in Canada for international calls because of the prohibitive charges.

I say, "Way to go India....!" As Vivek rightly puts it, do not kill the goose that is laying the golden eggs.

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