Calling The Bluff

The headlines of a DoT paid advertisement in the newspapers
that gave rise to front page news in local and vernacular papers ran as
"Village Hobar gets a public telephone. Honourable minister to
inaugurate". Villagers were excited at the prospect of being connected to
the world. There were more than three lakh such inaugurations, with much fanfare
and newspaper headlines. The joy was short-lived as the telephone went dead
after a few days. More than two lakh village public telephones (VPT) met the
same fate but this did not make even one newspaper headline. With such media
coverage, DoT (now BSNL) can certainly gloat of being the only agency connecting
villages. With privatisation and the provision of VPTs under USO Service Obligation>, DoT will lose this rare title of being a benign service
provider.

India has 607,491 villages. National Telecom Policy (NTP) 99
is an ambitious policy and envisages provision of low data service to 2.9 lakh
villages by December 2001, i.e. all village phones would actually be Public
Tele-Info Centres having Internet capability in accordance with the IT
policy. Not only this, it also proposes to upgrade the existing 3.17 lakh VPTs
to PTICs by 2002. NTP 94 had laid down great emphasis on rural communication and
USO was built in the license itself in the form of direct exchange lines and VPT targets that a private basic service provider was obliged to meet on quarterly basis. As the goals set out in NTP 94 for VPTs have not been achieved so far, it was recognised that neither DoT, as a monopoly telecom service provider, nor private operators, would fulfil the obligations under normal commercial considerations. Hence NTP 99 stipulated raising of resources for this purpose through the imposition of a universal access levy, which would be a percentage of the revenue earned by the operators under various licenses.

UAL : Resources for meeting USO will
be raised through a percentage of the revenue earned by all operators. This
percentage will be decided by the government, in consultation with TRAI. UAL is
required for providing village public telephones and should cover both capital expenditure and
recurring expenses. USO for rural and remote areas would be undertaken by all
fixed service providers who would be reimbursed from the funds raised from UAL.

Dot had been collecting huge revenue surplus for the last
fifty years, being the monopoly service provider and with abnormal STD call
charges. Teledensity stagnated at one percent and the majority of villages
remained without any telephone. It is only in 1995, when the service was opened
to the private sector, that it awoke from its slumber and the waiting list for
telephones in the capital disappeared and the teledensity moved up marginally.
During 1998-1999, DoT earned a revenue of Rs 10,320 crores and utilised only 20
percent of the surplus in rural and backward areas. Of the 4.5 million new
connections provided in 1999-2000, less than 30 percent were outside the 12
largest cities–most of these were in the constituencies of powerful
politicians.

If 5 million telephones were added by DoT every year (as
claimed by some senior executives of DoT), the country would have had 250
million telephones and a teledensity of 25 percent. It is on record that the
country has only 28 million telephones as on date, with a teledensity of less
than three percent.

DoT did provide 163,167 VPTs on landlines and 211,313 VPTs on
Analogue MARR systems. The functioning of these telephones is a big question
mark. Billions spent on An-MARR have gone down the drain and these villages will
have to be reconnected. This is an example of DoT’s commitment to the people
of the country, meeting its obligations and quality of work. There has been no
inquiry into this scandal. Being the monopoly operator, DoT could play with
resources at will and impunity, without accountability. Isn’t this reason
enough for the policy makers to lose faith in DoT’s intentions and ability to
implement the national telecom policy?

Decrease in revenue surplus is being attributed to revised
STD tariff and its effect on new VPTs and rural telephones. Every one knows the
truth i.e. the cause for fall in revenue despite 5 million additional
telephones. It is rampant corruption in tendering and work contracts,
inefficient operation and the likely impact of free telephones to serving and
retired employees.

Cross subsidisation of local calls and ‘low calling’
urban subscribers is another myth created to collect revenue for ‘dead
telephones’ and charge a high STD tariff. A majority of these subscribers,
unable to pay ‘hafta’ to telecom staff, have to be content with a dead
telephone for more than fifteen days in a month. Monopoly, revenue from dead
phones and low volume at higher rates, made DoT arrogant, complacent and blind.

Simple business economics in the service industry - more
usage gets more revenue, was lost sight of. The opening of PCOs and STD / ISD
booths increased the revenue manifold and established the business principal:
`more income with high volume at lower rates.’

Universal Service Fund is at the centre of NTP 99, for
linking villages and rural population. The total revenue of telecom, cellular
and other allied services is today around Rs 25,000 crores. Five percent of
this, if paid by everybody, will yield only Rs 1250 crores. To provide 4.5 lakh
village public telephones by Dec 2001, Rs 2500 crores are needed for this fund
(yearly), excluding the expenditure on rural exchange lines. DoT has resorted to
a new strategy–sabotage the USO fund management. The modus operandi is simple–subscribers
in urban areas making up to 500 calls per month to be brought under USO and
compensation to be claimed for the VPTs already installed. The fund will be
frittered away with nothing left for village telephones. Result: CONNECTING
VILLAGES IS MISSION IMPOSSIBLE.

If MTNL and VSNL performed well as corporate entities, why
fear corporatisation? With years of exposure to communications, Bharat Sanchar
Nigam should be able to provide tough competition to private operators. It is
advantage BSNL–corporatised DoT, against private operators. The new avatar has
all the pluses required to start the venture. With a lead-time in starting
operations, it has acquired vast real estate across the country at a nominal
cost. With networks in place and the telecom license in hand to provide basic,
long distance communication and cellular services, unlike private operators who
have yet to apply for different licenses, it has to launch value-added services
only.

Trained manpower is another advantage. The biggest asset is
the consumer base of 28 million and the only challenge it has to face is
preventing private operators from winning them over. It is a formidable task
that can only be ignored at peril. The prescription is simple–change your work
culture. The sky is the limit for profits and revenue. Strikes will agitate
customers and hurt its roots.

Since the provision of free telephones, retired DoT / DTS
employees, though not consumers but claiming to be and protecting their
interests, are more vocal against opening of NLD, corporatisation and
contribution to UAL. All shed crocodile tears about VPTs. To relieve DOT from
UAL, they want the consumer to be billed with additional levies under the USO
instead of operators paying a percentage as laid down in the NTP 99. TRAI too
has bitten the bullet and proposes the same under the pretext of ease of
collection. They want to educate the consumers to pay more for the slot.

Quality standards of service, with provisions for monitoring
and penalty for deficiency in service, is a firm NO as it may hurt the DoT
revenue. Never did they say ‘Hold the free largesse for employees till every
village is connected.’ O.P. Gupta, secretary general, National Federation of
Telecom Employees, stated in a conference ‘If you close your eyes to the
scandal of millions in contracts by seniors, why grudge a few rupees taken by
the line man.’ This sums up the work culture of the department. As regards
efficiency, DoT manpower per hundred lines is five to six times the standards of
other developing countries.

Going back to technology alone will not prepare DoT for the challenges of future. Change in mind set, better work culture, accountability and pride of profession are the key to success. It is high time that DoT stopped the deception.

Col S N Agarwal

is telecom consultant to the ‘Voluntary Organisation in the Interest of
Consumer Education (VOICE)’.