The Hindu Business Line : Telecom: A revolution in progress

As we celebrate the World Telecom Day today (May 17), it is good to think through what the end of monopoly, the entry of foreign companies and the corporatisation of the government-provided telecom have wrought since the enunciation of the National Telecom Policy (NTP) in 1994.

Telecom facilities interlinking our cities and India to the world, especially to the US have expanded and improved immensely. Competition in the provision of the telecom infrastructure by way of broadband connectivity using underground Optical Fibre (OF) cables and communication satellites have brought down the price for long-distance bandwidth by over 80 per cent and is expected to fall further. .

Building bandwidth

Private companies have aggressively built tremendous international bandwidth by laying submarine cables and acquiring assets. Within the country, besides these companies, the state-owned RailTel, Power Grid Corporation (PGCL) and Gas Authority India Ltd (GAIL) have expanded their Optical Fibre transmission system so much that beyond captive use they are able to sell capacities to telecom service companies.

This has helped India's software companies to reduce the telecom linking cost as a proportion of sales from over 30 per cent to under 20 per cent, thus augmenting their competitiveness. Competition and new technologies have brought down costs for companies and prices for consumers. There is a phenomenal growth in the number of mobile telephones and as expected near-stagnation in fixed traditional plain old telephone subscriptions. There are nearly 100 million mobile telephones in the country, and additions are at the rate over four million per month, and fewer than 45 million fixed telephones, many of them in the last few years using wireless in the local loop.

The demand for telephones in the rural areas is exceeding that in urban India. In several countries such as Sweden, Norway, Israel, Italy, France and Hong Kong, mobile telephones per hundred people is over 90, that is, except infants and those too old, every person has a mobile phone. The annual average spend for a year's telephone service in relation to the per capita income has come down from 2.5 times in 1951, 0.6 in 2006.With the price of the instrument falling steeply, from Rs 8,000 in 1996 to Rs 1,500 now, and the charge for a minute of mobile telephone call falling from Rs 16 in 1996 to Re 1, the cell phoneis no longer a businessman's or the rich man's privilege but a common man's instrument of daily use.

It has become a key tool for self-employed people such as carpenters, masons, plumbers, and electricians as also land-owning farmers. .

There are scores of service-price packages to suit different classes of users. One of the impressive service packages, first mooted by the Communications Minister, but introduced by private companies, even before the state-owned Bharat Sanchar Nigam Limited, (BSNL), is India One. In this scheme a call from anywhere to anywhere in India is priced just at Re1 per minute.

Such revolutionary price service package is not available anywhere in the world, not even in the US. This is the result of competition.

Age of Internet

Internet is also becoming less expensive to access both because of competition and the prices of PCs coming down. With the government evangelising Information Technology, Internet-based services are permeating at every level.

The e-mail has all but replaced the conventional postal mail, and banks are becoming accessible anywhere, anytime. While businesses and industries are finding telecommunications indispensable to give them the competitive edge and to cut the cost of transaction, government too is taking to e-governance.

Now that the expansion of the network and its use are furiously extending, the development and production of equipment required for the information infrastructure and communications devices (cell phones, RFDs, palm-tops, VSATs, etc.) in India must be promoted.

The first requirement is, just as in China, Malaysia and Korea, we must have think-tanks for an Information Society and as a first step, there should be ICT Universities. ICT majors must come together and establish these learning centres with the proactive support of the government.

BSNL as a state-owned company and with the largest amount of talent and experience ought to lead this initiative.

The Chinese Communications Ministry has two universities and it is through them that it has provided the talent required for its world class ICT companies, Huwai and ZTE . These companies are taking on the well-known European and American companies in their home turf and global markets.

As companies are furiously promoting the use of mobile telephony and the Internet, issues of security for users, their messages, and even money are cropping up.

These concerns need to be addressed and the people educated on usage etiquette, especially of cell phones in public places.

(The author, a former CMD of Videsh Sanchar Nigam Ltd, is Director, Centre for Telecom Management and Studies. He can be contacted at hanuman.chowdary@tcs.com)

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