The Hindu Business Line : Tracking the buzz

It is with a reassuringly positive thought that my interaction with Rahul N. Saxena, Managing Director, Verizon Data Services India P Ltd, Chennai, began on March 24. India is best positioned to weather the global downturn, because of two reasons, Saxena says. "One, we have a strong internal demand, and two, we enjoy an unbeatable competitive advantage in offering world-class talent when it comes to external demand."

A Ph.D and M.Phil in Economics from Columbia University, New York, and an MA and BA (Hons) from St Stephen's College, Delhi University, Saxena is one of the founders of Vodafone-Italy (Omnitel), a Verizon joint venture with Vodafone in GSM wireless, and is a Director on its Board since 2000.

Starting his career with AT&T, he worked for a British management consulting firm, PA Consulting Group, before joining Bell Atlantic/Verizon. He has 25 years of experience in telecommunications ranging from operations to business development and strategic planning. During the last two decades and more with Bell Atlantic/Verizon, Saxena has played key roles in start-up operations in Czech and Slovak Republics and international business development in Venezuela, Greece, Portugal, Denmark, Indonesia and Korea.

"As an observer of telecom developments, what are your thoughts on the way the telecom revolution has happened in India, vis-…-vis other emerging economies and the developed world?" I ask Saxena.

In India, we have seen a positive convergence of public policy and private initiative in the sector of telecommunications, he replies.

"The Government has, on its part, been very wise to embrace the idea that telecommunications is a critical part of the nation's infrastructure and that private sector has a significant role to play in ensuring that this infrastructure gets deployed rapidly and its services made available to all Indians," he observes.

While one can always debate how much Government regulation is optimal, he sees a very fruitful partnership between our public policymakers and private enterprise.

Our conversation continues over e-mail.

Excerpts from the interview:

?Which of the three verticals - viz. residential, business, and wireless - is witnessing the fastest growth, globally and in India?

Telecom trends that are being witnessed in the US and elsewhere in the world exhibit varying patterns. Mature markets such as the US and Europe are looking at stagnation in fixed line voice telephony but continued growth in fixed broadband services, including data-enabled video services. In the same mature markets, wireless, however, continues to grow but more in the data services area; wireless voice, on the other hand, is closer to saturation.

So, from an overall telecom services' standpoint, what mature markets are seeing is a change in the composition of services, with broadband and wireless eating into the traditional domain of copper-network based services.

However, in lower tele-density markets, such as India, we have had the choice and advantage to leapfrog fixed-telephony stage and enjoy the rapid deployment of wireless networks and the services enabled by them.

We are witnessing unprecedented growth in wireless voice and non-voice services, such as text-messaging, and this growth should continue until we reach market saturation - and, that saturation stage is still some years away.

In parallel, I expect business and institutional segments in markets such as India to increasingly rely on broadband and other fixed-network based services to increase productivity and efficiency, and manage costs and security.

For businesses and institutions that are geographically spread, such as banks, insurance companies, conglomerates and public institutions such as hospitals and governmental agencies, reliable and secure interconnectivity is critical.

With an increased reliance on computer-aided automation, e-governance and e-commerce, large-scale business-to-business and institutional backbone networks that are fibre-based are highly likely to play an important part.

These will co-exist and in fact enable and extend the capabilities of the wireless networks.

Voice, data, audio, video, TV, and two-way. What more can we expect connectivity to achieve in the next about a decade?

In terms of communication mode, we started with one-to-one communication in the era of basic voice telephony and have now progressed to data-enabled networks of large interconnected communities and businesses, such as those we see on the Internet. The revolution of digitisation has helped us build capabilities beyond voice on these platforms and we can now have richer multimedia experiences for communication messages and entertainment.

Against this backdrop, I see two significant developments that should stand out over the course of next decade. One is video services enabled by telecom networks and the other is machine-to-machine communication. (For instance, in 16 US states, Verizon's TV and broadband are delivered over a fibre optic network all the way to the customer's home.)

In machine-to-machine communication, I am not referring to the data communication between computers, as already exists in large business networks. I am referring to the ability of our everyday electronic devices to communicate with each other and be enabled by a network which is managed and controlled by individuals, such as households.

While in the public domain, telemetry is an example, in the personal domain, you could have your refrigerator communicating with your neighbourhood store to order milk or certain vegetables when the household's supply begins to run low. This kind of communication will, in large part, be enabled by wireless networks.

In the world that we would see post-meltdown, what, according to you, will be the sectors and industries that will be driving growth?

It is easier for me to take a shot at answering this question in the context of less developed economies, such as those of India and China - in these economies, consumer and infrastructure-oriented sectors would show a strong return to rapid growth. However, in the developed economies, it is more difficult to identify any particular sector that would uniquely drive growth. I believe growth in mature economies would be more evenly spread across a wide range of sectors and industries as they re-emerge from a very widespread and deep economic downturn. Also, those developed economies that are more export-oriented will find it easier to climb out of the current recession.

From your perspective as a Ph.D in Economics, do you feel that the common people and businesses are getting economics right in their own micro spheres? Or, is a lot of misconstruing happening all round, right up to the national policy-making levels?

I respond not as a professional economist because I am not one, but as an individual with a background of economics.

I believe individuals at their micro-level do indeed make more or less rational choices on a daily basis. In general, businesses too at their own level make sound decisions, especially if they have a good governance and management structure.

The difficulty for both, individuals and businesses, comes in when the economic environment has significant uncertainty and rapid change. This, I believe, happens both in the times of rapid growth or rapid slowdown. It is during such times, that normal decision-making begins to get displaced by a herd mentality. And, since free markets work on the basis of individual decision-making, during times of rapid change they tend to overshoot - up or down - what would otherwise be a long-term steady trend.

In response to your question about national policy, this by definition relates to some collective wisdom of an external body, such as a national government, that relies not solely on private decision-making and the market but on a social and economic vision that it embraces for the nation. I do believe that such external moderating forces, such as national governments and policies, have a very constructive and complementary role to play in what are largely free and private-enterprise based economies.

The greatest contribution that a wise national government, especially in a less economically developed economy like that of India, could make is in two areas: one is in developing infrastructure and this encompasses both physical and non-physical, such as education and health; the other is in strengthening the critical softer institutions of law enforcement and delivery of justice. The latter contributes to a socio-economic structure in which there is a relatively increased certainty for an individual and a business that an action has a predictable consequence. When this link is strengthened, uncertainty of results is reduced and individuals and businesses make rapid and better economic decisions, and the economy as a whole grows.

dmurali@thehindu.co.in

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