The telecom sector has gone through a really tough patch over the last four years. The poster boy of Indian reforms and Indian innovation has become a tired horse, overburdened with debt.
The initiatives of the Indian telecom sector starting with government regulation, a unique operator business model and affordable handsets from brands like Nokia helped India achieve a digital infrastructure that is unparalleled. This digital infrastructure can be the backbone of a lot of opportunities for India.
As it happens with any success, success breeds complacency, success breeds arrogance and success attracts taxes and duties. The telecom sector was no exception. We saw fresh licences were issued to shore up Government revenues, we saw rules being imposed on the sector and we saw VAT go up on handsets. We started killing the goose that laid the golden egg.
What are the lessons from what we have seen and what should we do in 2013?
Competition is good up to a point; hyper competition in most industries is destructive. In a high capital expenditure industry, this must be managed, else, debt mounts up, consumer services suffer, industry employment suffers and eventually economic viability is a question. We have 17 operators; there is no place for more than 5 operators. So, how do we come to five viable operators and what’s the time frame is something to think about in 2013.
Allocation of scarce resources like spectrum cannot change with every government. There must be an agreed methodology and we should give the telecom sector confidence of a long range spectrum plan. India took time to go to 3G; we might be jumping the gun in pushing for 4G. We should not rush 4G as the ecosystem is not fully ready.
We have a lot of sub-standard handsets coming into the country. The Government must establish some standards and protect consumers from poor quality products. The government must encourage local manufacture of handsets and related products.
The mobile ecosystem can be used by the Government in a number of ways, money transfer being one, the spread of internet, the opportunity to provide low cost digital education and health services. This will mean the development of new business models in each industry.
The Government must simplify the rules and regulations that act as a hurdle today for the development of these new business models.
Consumers in India log onto the Internet from a mobile phone and not a desktop. Facebook, Twitter and many more of the social applications will be mobile led. There are two concepts the government must clarify in a digital social world. The first is freedom of speech and the second is privacy.
The telecom sector will be one of the big drivers of employment and GDP this decade. It is in national interest to have a healthy industry that contributes to India’s success. It is time to make the goose healthy again with pro industry policies.
(The writer is Vice-President, Nokia India, Middle East, Africa)