Much more to telecom than 2G

Amidst the gloom on the industrial front, the Union Cabinet recently ratified the National Telecommunications Policy 2012 (NTP 2012).

In the past months, much water has passed under the telecommunications bridge. And, we forget that India has achieved a revolution.

The number of Indians connected by wireless communications is nearly 1,000 million. India has topped the world in something! We did not believe that it could be so. India recorded the fastest rates of diffusion of any technology in recorded human history.

India is the most voluble democracy on earth, with a billion connected Indians. Diffusion of wireless communications has achieved democratisation of communication, permitting cheap talk.

Such feelings breed a sense of security and self-control over one's destiny for millions of Indians.

Positive energy

Let us evaluate the positive energy released. Mobile telephones make life easy, processes efficient and generate benefits of, say, Rs 5,000 per person per year, a tiny sum. Assume these benefits persist for 10 years, yielding total benefits of Rs 50,000 per person. The total benefits of Rs 50,000, enjoyed by 1,000,000,000 connected persons, work out to Rs 50,000,000,000,000 or Rs 50 lakh crore!

Against such evidence, the brouhaha caused by the 2G scandal is childish. Inordinate resources were expended in tackling flawed 2G spectrum allocations issues. But, that is past. It is time to move on.

Emerging Technologies

3G has arrived. It is deployed in India. With 3G, spectrum is utilised to provide advanced voice, data and media services. The hand-held phone is an educational appliance. It is an economic appliance, since cell-phone commerce is an emerging phenomenon. Such imaginative appliance usage transforms life's options for India's millions.

Even 3G technology is passé , because 4G is in play. Evolving wireless communications standards promise that the next standard, called Long Term Evolution (LTE), is ready for roll-out. LTE extends Universal Mobile Telecommunications Standards (UMTS). LTE allows download of data at 100 mbps (megabits per second) and uploads at 50 mbps. There is no waiting. Activities are instantaneous.

LTE uses multiple input and multiple output technology (MIMO), requiring multiple antennae since MIMO can handle large amounts of traffic. The provision of multiple antennae, the creation of LTE networks and the associated extensive software development, yet, are extremely expensive tasks.

The 2G saga had everyone barking up the wrong tree. The fact is — Indians are connected. It is time to educate them totally. LTE technologies can help achieve that. New LTE standards can radically alter the services to be provided to the nearly 1,000 million connected-wirelessly Indians.

Companies need appropriate policy frameworks in which to plan deployment strategies. Does India have policies encouraging large investments? The National Telecommunications Policy 2012 ratification is a tiny step forward.

Features of NTP

The key components of NTP 2012 are:

Accessibility as the primary objective, not revenue generation for the treasury: this is an estimable goal to make India a low cost economy.

Achieving high rural tele-density: this is equally estimable if rural India is to be brought into the mainstream, and the feelings of inadequacy and helplessness in rural India are reduced by the spread of modern technology.

There will be full all-India charge-free roaming, and

Number portability : These policies assume India is one entity, and they can encourage greater all-India usage, greater services generation, handsets diffusion and network infrastructure investments.

Lessons for Trai

Though cross-subsidies are involved, politically these policies enhance national integration by making all-India residence easier.

India can become a manufacturing hub for communications equipment: this is critical, since China has made a major leap in this game, with Huawei, the Chinese manufacturer, commanding a 50 per cent world market share.

At best, India can play a late catch-up, and she has to, since manufacturing value-added contributes to the quality of a nation's sustainable economic growth.

Some features must be understood regarding telecom policy.

The Ministry is there to make policy, not regulate, and

The TRAI is there to regulate, not make policy: these are excellent ideas; however, the Telecom Regulatory Authority of India is not a constitutionally-independent agency, such as the CAG, the CEC and the UPSC, but a statutory, independent office.

Though established by a Parliamentary Act, much depends on the TRAI Chairperson to avoid the ‘moral suasion' ministers provide.

A nimble Chairperson can avoid ministerial ‘suggestions,' but the lack of constitutional cover is a key disincentive for investments in a sector where sunk costs are notoriously high. Plus, a retiring Telecommunications Secretary's incarnation as a TRAI Chairperson is least likely to signal regulatory freedom from ministerial suggestions.

The TRAI is mandated to provide policy advice. Advice creates a conflict of interest for TRAI. It can influence the Ministry's policies, which lead to regulations drafted by the Ministry. If generation of policy inputs by TRAI continues, so will ministerial regulatory interventions.

Administrative reform is crucial. Unless a constitutionally-mandated fully-independent TRAI, shorn of its policy advisory role, is established, regulatory independence will be a pipe dream.

This governance conundrum could be Achilles' heel for the sector.

NTP 2012 components are incontestable; the ideas sound, outcomes far-reaching and the positive expectations feasible. But, poor execution can botch it all up.

(The author is Professor of Technology Strategy, University of Texas)

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