Commit to communication convergence

Telecom growth and convergence very much depend on stable and forward-looking regulatory polices which are implemented in tune with technology deployment, writes Varadharajan Sridhar in The Telecom Revolution in India: Technology, regulation, and policy (www.oup.com). He cites research findings on how one of the primary factors driving the exponential growth of mobile services in India is competition.

The book mentions examples from around the world, such as the US telecom market wherein the Telecommunications Act of 1996 introduced competition and spawned the development of new technologies such as digital subscriber loop and cable modem by erstwhile monopoly operators in their fight for survival; and the UK scene, where British Telecom, the government operator, is proactive in the deployment of next-generation networks. The author, therefore, opines that with policies directed towards healthy competition in the marketplace, we can definitely hope for another revolution in the country, that is, growth of broadband and convergence.

Blurring divisions

For a start, ‘convergence’ is explained in the book as the blurring of dividing lines among traditionally distinct products and services, technologies, industries, and markets. Reminding that the Internet is a powerful medium which has embraced convergence quite effectively, the author outlines that the Net provides: (a) communication services such as e-mail and Internet telephony; (b) broadcasting services such as web-casting and electronic community services; (c) publication services such as publishing electronic journal, e-books, and electronic manuals on the Web; and (d) electronic commerce and electronic business services.

Sridhar elaborates that technology convergence has enabled broadband Internet connectivity and video-on-demand (IPTV) to be provided through normal telephone lines; video sharing over mobile phones; and Internet connectivity through cable TV networks and DTH satellite antennas. An instructive visual in the book depicts communication convergence through a series of concentric circles mapping the many players and products, but at the centre is the consumer who uses the different devices such as telephone, TV, computer, and cell phone.

Single bundle

The author also points out how, in today’s convergent market, products and services are being bundled. “Most of the telecom companies have bundled telephone connections with Internet connectivity – the LCO has bundled cable TV with Internet service, and mobile service providers have started offering Internet access and broadband content along with voice services.”

With the convergence of information and communication technologies, available as a bundle, it becomes possible for consumers to bank on a single service provider for all their requirements; and, as Sridhar visualises, it would be possible for consumers to access different services from anywhere through a single intelligent device. “The day is not far off when we can all instruct our intelligent home washing machines connected to the Internet, to start operation right from our desktop office computer.”

While such a scenario can be enticing, a sobering thought in the book is that our regulations and policies can be lagging. “The Convergence Bill created in 2000 recommended the creation of a ‘composite telecom licence’ and the setting up of a super regulator called the ‘Communication Commission of India.’ However, the Bill was never tabled in Parliament,” observes Sridhar. Though unification has been achieved to some extent between basic telecom service and cellular mobile service through the implementation of the UASL, removal of restriction on the Internet telephony service to be provided by the ISPs, unbundling of the local loop, and other such regulatory interventions are required to bring in true communication convergence, he adds.

Network economics

The opening chapter in the book is devoted to network economics in telecom. “Some goods and services generate more value when more users consume the same goods and services. The consumers using these products constitute networks in which the utility derived from consumption of these goods or services increases as additional consumers purchase or use the same goods and services,” the author begins.

He traces how, after the first cellular licences were issued in 1995, the subscriber base shot up from nothing to more than 3 lakh in just a year, because the cellular subscribers could connect and talk to the then existing 12 million landline users. “Therefore, critical mass was achieved almost instantaneously resulting in a good growth in the cellular service adoption in the country. If we had a policy imposing the restriction that cellular subscribers could only talk to other cellular subscribers, the industry would have died instantly due to the absence of critical mass.”

Group effect

In a section that discusses the different models of network effects, the author makes a reference to David Reed, who stated that in networks like the Internet, group-forming networks (GFNs) are an important additional kind of network capability. A ‘GFN,’ one learns, has functionality that directly enables and supports affiliations such as interest groups, clubs, meetings, communities, among subsets of its customers.

The author informs that group tools and technologies (also called community tools) such as user-defined mailing lists, chat rooms, discussion groups, buddy lists, team rooms, trading rooms, user groups, market makers, and auction hosts, all have a common theme – they allow small or large groups of network users to coalesce and to organise their communications around a common interest, issue, or goal. “Sadly, the traditional telephone and broadcast/ cable network frameworks provide no support for groups.”

While Reed concluded that the GFNs create a new kind of connectivity value that scales exponentially with N, some researchers are of the view that the growth tends to be S-shaped (Gurbaxani, 1990), with three distinct phases. In the initial stages, as Sridhar describes, growth is less as subscribers are not fully informed and aware about the utility they derive by joining the system. “However, as the number of subscribers attains a ‘critical mass,’ the number of subscribers in the system is large enough for the growth process to become self-sustaining. Growth increases near exponentially in the second phase. The last stage indicates stability in growth as the saturation level of subscribers is reached…”

A book that chronicles the history of a game-changing industry, and punctuates the narrative with insights for policymakers.

Tailpiece

“Our customers have started asking for bilingual solutions such as…”

“Why this EngTam craze?”

“No, a mix of high- and low-level computer languages!”

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