The Hindu Business Line : Rural telecom: Too many networks foil the booth

The call of exclusive bids for rural telecom operations has presented the country a situation in which one step taken forward is reversed by two in the opposite direction.

Sufficient thought does not seem to have been given while giving the go-ahead in this respect, according to Mr P. Abraham Paul, leading telecom expert with 40 years of experience in the field. He has served as Director/ Vice-President (Technical) with Siemens Information and Communication Networks, among others.

According to him, implementing the concept of a pan India telecom service with unified licensing is a positive step that would set right a few of the earlier wrong doings.

In the case of rural telecom licensing, however, one will find that the business potential in all villages in any circle put together is not sufficient to make the business viable even for a single operator.

More operators within the circle means further division of wireless spectrum allocation and more individual numbering plans. This will only mean more anomalies related to spectrum usage, interconnects, call routing and charging and revenue sharing issues between networks.

Further splitting of the circles for carving out and segregating villages into small and non-contiguous operational areas is impractical especially in the wireless services domain. Certain amount of overlap becomes unavoidable, which can cause technical, operational and administrative problems.

It will be next to impossible for new entrants to take on and sustain business in part of a major area already licensed and covered by many existing network operators.

In most of the circles, there are already four to five (fixed, GSM and CDMA put together) licensed service providers who would stake claim for village operations in their licensed area.

Then there are the all India licensed service providers to contend with.

As the rural areas grow into villages and small towns within the space of the circle, the country will be burdened with numerous operators and networks. There would be sufficient reasons to go to town with endless litigations.

According to Mr Paul, the number of networks needs to be limited. Given the low business volume in village areas, one way out to make it a viable proposition is to allow only a few service providers to keep the competition live.

Another factor to be wary of is that the differentiation between wired/wireless is fast disappearing at least from a business perspective.

Voice and mobile data/Internet characteristics in mobile systems are more or less similar to those in fixed networks. Differences are limited to access types, bandwidth limitations and device characteristics.

The critical differentiation is in the local loop. About 80 per cent of the cost of telecom in rural areas is that of the local loop.

With the cost of wireless technology systems heading southward, it would become more economical to adopt predominantly wireless technology in rural networks.

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