Challenged, the telecom sector rises

No one had visualized the ubiquitous nature of mobile telephony; despite the odds, the sector leapfrogged to transform a billion lives and the economy.

By Pradip Baijal

Mobile technology was introduced into the world in the mid-1980s, but our experts opposed it because they thought the technology was very expensive for the poor Indians. Hence, initially, mobile telephony was not introduced in the country. Ultimately the technology was introduced in the mid-1990s for fixed-lines only, since such installation did not involve any digging, etc. Later mobiles were introduced around the same time. They could not connect with other networks since there was no regulation or regulator to enforce interconnection between the private and public networks.

The work only started after the promulgation of the TRAI Act 1997 and the appointment of a regulator under a court order. Even then they were expensive due to heavy taxation and connectivity charges till 2003. The Act also had problems with regulation, dispute resolution, and appeals. They were sorted out through an amendment of the Act in 2000. But the numbers did not grow due to high tariffs promulgated by the Regulator, who favored the incumbents’ heritage networks, charging a heavy rental for their old networks. Consequentially, the number of mobiles only grew to 10 million by 2003. In a similar backward country China, the number of mobile users had crossed the 300-million mark during this period.

Till 2003 India had only 10 million mobile subscribers. In a similar backward country China, the number of mobile users had crossed

the 300-million mark.

The Regulator introduced Unified Access Service Licensing in 2003, and drastically reduced connectivity and other charges. It also decided to make tariffs forborne – to be fixed by operators in a competitive regime. This resulted in the tariffs coming down 50 times and massive growth in mobile subscribers, from 0.2 million to two million per month in 2004, six million in 2005, and 20 million in 2010. India’s overall mobile subscriber base crossed the 1,000 million mark by 2010. This also led to a jump in India’s global ranking on the mobile front: from 122 in 2002 to number 2 in 2010. The monthly growth of 20 million a month was three times that of China.

All good things come to an end and the telecom sector’s dream run too ran into some rough weather. The industry faced many ups and downs after 2010 but continued to invest in new technologies like 3G and 4G and we are now on the threshold of adopting the 5G. However, many problems continue, like the non-introduction of converged licensing in India, despite the new networks being digital. This problem has been dealt with by converged permissions being given for all new technologies through regulations, including broadcasting services. With all kinds of data also moving on to telecom works, another problem is data security, particularly on foreign networks. The government is seriously working out solutions for data security and privacy issues.

Telephone services were revolutionized in the period starting with 1950 with the Industrial Revolution 3.0. This revolution also led to higher GDP growth rates in backward countries. The new communication technologies are also working on the same medium. The networks therefore now carry most information and served as an infrastructure of growth. If these networks are handled intelligently, these services, operating on the same wire/wireless may lead to huge growth in GDP in backward areas. China has shown a great growth rate up to 2017, overtaking the USA’s PPP gross growth rate.

India is still catching up but the future has a huge potential for the country. The country has done it in the past with its excellent service in the IT sector, and it can lead the way in driving the digital economy again.

The author Pradip Baijal is former Chairman of TRAI and Secretary, Divestment with the Government of India

feedbackvnd@cybermedia.co.in