The Hindu Business Line : The 100 million club

The telecom story continues to be the best evidence of the efficacy of the reforms process. In just six years, the number of mobile subscribers has gone from just about one million to 100 million, a subscriber base that only four other countries — China, the US, Japan and Russia — can boast of. None can doubt the correlation between this explosive growth in numbers and the steep decline in the cost of the mobile phone and of its usage. Effective tariffs have dropped from over Rs 14 a minute to Re 1, bringing the phone within reach of people even below the middle-class.

And there is as clear a link between the lowering of tariffs and the play out of a constructive policy regime. Extortionist licence fees were replaced in 1999 by a more reasonable arrangement of revenue sharing with the service providers. The competition levels were heightened in 2001 with the introduction of more players. With private operators challenged all the time by an energetic and resourceful Bharat Sanchar Nigam, there have been few occasions for the regulator to intervene on behalf of the customer to bring tariffs down. The pressures of the competitive market have been more than enough to deliver results. Yet it was not price alone that set off this rush. One will have to concede the attractions of the mobile phone — its handiness and portability, and the all-round value it offers its owner. How else do we explain the concurrent decline in the number of subscribers of the fixed telephone to just 47 million? Even at the current low tariffs, mobile calls are still pricier than those from fixed lines, and despite steep tariff cuts, BSNL has not been able to stem the flight of fixed line users to the mobile.

The Government may have, therefore, landed itself a winner in the mobile phone, but the task of taking telecom to the other 90 per cent of the population will call for even greater innovation in policymaking, technology and marketing. Still three-fourths of the land mass is not illuminated by a cellular signal and the price of the instrument is beyond the reach of a substantial section of the population let alone the charges for its use. The inadequacy of the frequency spectrum is still a sore point for service providers, causing as it does dropped calls and delayed delivery of messages especially in the metros. These issues, of course, can be resolved by decisive policy action, such as a creative use of the Universal Services Obligation fund that now has over Rs 7,000 crore, releasing adequate spectrum to operators in the metros, and a proactive investment policy that invites many more equipment manufacturers to set up base in this country. The road to the next 100 million can then be even faster.

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