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Indian Telecom again in turmoil

NK Goyal President, CMAI www.cmai.asia

The globe is round and so the Indian telecom sector. We are back to square one in India as regards telecom. It all started when we realized that getting telephone connection takes several years, Government opened up the sector to private investment in 1994. Several companies came in and invested heavily. Then it was realized that due to heavy cost of bidding, the operators are not able to invest and grow. A large number of legal cases were pending in various Court. The Government realized clearly that the purpose of Government is not to earn revenues from telecom sector but to provide connectivity to all at most affordable prices. Then came the historical decision for the first time in NTP 99 to do away with the committed payments from operators and turn up all of them into revenue sharing. At the same time all out cases were withdrawn and also difference between Fixed line and Wireless was removed and concept of Universal Service known as UASL came in. The applications for licenses were made open as and when applicant desires and licenses were to be given regularly. Licenses were also issued actually on various dates from 2001. Earning of revenue for Government had never been an agenda during all these years.

The Government introduced new telecom operators in order to bring competition, the success of which has been seen by all in tariff getting to as low as one paisa for nine seconds, the cell phone available as low as Rs 700/- and in reach of every citizen on road. STD concept has been vanished due to recent BSNL initiative as also low tariffs on mobile.

Now suddenly everybody including media, so called experts, consultants saying from rooftop that Government should have earned huge revenue. There are several figures making round form Rs 33,000 Crores to Rs 1, 76,000 Crores. Nobody is talking of the NTP 99. Nobody is talking of need to reach the poorest citizen in country. Airs are blown to cancel the licenses already granted. Nobody is concerned that investments have already been made and there are specific provisions in licenses relating to cancellations. We are again heading for litigations and turmoil and bad name world over affecting the FDI and investments.

While talking all this, it is lost that spectrum is always given free to operators and only some revenue share charging 2-6% or so. The 1600 odd Crores is fees to secure license, after which one is free to provide fixed line service wireless service or ISP. We have lost the shift that successively the Government on popular demand has reduced the revenue sharing charges year after year with the sole purpose of making service affordable to all.

One view that hold good even today. If Government as also people at large, parliamentarian and media is concerned with revenues for the Government, then simply why not to increase the revenue sharing to may be as high as 50-60-70%. Government can earn billions of Crores. Who is bothered if service is available to poor man or not? At the same time why not to charge full fare in Delhi Metro. Who is now bothered for service to poor….the sole aim should be to earn profit. Also let there be 100% FDIO allowed to operators. The Government can earn other billions of dollars by awarding licenses to foreign companies.

We have lost of the sight that another set of litigations, another controversies is not good for telecom sector for investment and growth. Will some Bank now touch Indian telecom sector for investment?
When people talk of 2G auction, they fail to bring out the fact that nowhere in the world 2G auctions have been held till date. 3G was auctioned everywhere in world and no where learned media and citizens have questioned their Government as to why 2G was not auctioned. India is unique in its diversity, democracy as also controversial hypes.

Down the line, the poor customer. Hardly anybody is concerned for him. We have lost the sight that there are some essential services like railways, hospitals, infrastructure, defense, security where revenue is not the consideration. And NTP 99 provided telecom in the same line. Of course the people of India has right to change the policy now and bring all railways, hospitals, telecom etc. in revenue earning machineries.

So perhaps way out is that all people of India, media, parliamentarian take a conscious decision as to what is that we want. A growth and connection for ordinary citizen or revenue to the Government and then policy can be made out accordingly.

Also nobody is sure if we want indigenous Research and Development and manufacturing in the sector. If yes let us introspect as to what we have done and what is needed.
Till then let us welcome turmoil in telecom sector once again.

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