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All
over the world the erstwhile monopolies, especially if they are
either government departments or government—owned
corporations, have been stubbornly opposing the restructuring of
the telecom sector the chief aims of which are promotion of
competition, customer care , and informatisation of society and
economy.
Only a determined and
convinced political leadership can effect the reforming. This
has been proved in the UK, the European Union, Australia, New
Zealand, and Japan where the Prime Ministers and the
communications ministers acted as the prime movers and mentors
in their departments–educating and orienting bureaucrats and
the monopolies to implement the de-monopolization programmes.
Unless the minister acts
as the mentor, reforms cannot be effected . This is being amply
proved in our own country also . Sukhram had a mandate to
restructure the regime but he wanted to profit by the process,
profit for himself as well as the party. He acted as a mentor
but with an ulterior motive. The distortions in implementation
have been many but a beginning was made for the
de-monopolization of telecom.
Jagmohan as the minister
for communications was a disaster. The techno-bureaucrats found
in him a champion and that too a moralist. His tenure saw the
maximum damage inflicted on the private telephone companies by
the DoT techno-bureaucrats. The Prime Minister himself had to
intervene, divest him of this portfolio and take over that
ministry himself with all the attendant mudslinging. Now we have
a new set of ministers. It is necessary that they fully share
the vision of the Prime Minister and the country in our
aspiration to become IT superpower. The fulfillment of this
vision totally depends upon ubiquitous and inexpensive
telecommunications all over the country. Many of the
liberalizing policies will come to naught unless the private
telephone and Internet service companies are helped during their
birth and growth. Unfortunately, the information that the
ministers are being furnished does not appear to be objective .
A number of biased views and statements are already afloat. A
few of these are commented below:
Village Public
Telephones (VPTs)
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Tapan Sikdar,
the minister of state for communications, was reported to
have taken the p-telcos seriously to task for their default
on the commitment to open VPTs. The p-telcos are thus
portrayed as profiteers and garners of licences without any
concern for service, especially in the rural areas. But let
us see the DoT’s own record in this regard. In
the last five years, the DoT has consistently failed to
achieve the target it itself set for opening the VPTs. Who
in the DoT has been held responsible and how this default
can be indicative of its service and not money-making
mentality? If the mighty DoT with more than Rs 8,000 core of
annual surplus, 25,000 exchanges, and with a claim for vast
technical experience and rendering services day and night,
has failed on its own commitment, how can we expect the p-telcos
who don’t have more than two or three exchanges in the
states for which they are licensed to open VPTs where they
don’t have any network and significant investment in
networks has been made impossible by their having to pay the
mobilized money as licence fee even before they can put any
network on the ground?Another thing
noteworthy is that the DoT consistently outperformed its
targets in the urban areas. Obviously, this is because the
urban public telephones produce lot of money; 30 percent of
DoT’s revenues come from towns and cites. When the
presumably service -minded DoT gives such high importance
and priority to lucrative sectors, how are we to expect the
embattled and financially crippled p-telcos to fulfil the
VPT commitment? -
It is far
less expensive and less investment -requiring for the DOT to
install the VPTs rather than wait for the millenium to come
to bless the villages with public telephone by the
non-starter basic p-telcos which are only in a handful of
states. If the DoT allows mobile p-telcos to open VPTs, we
will have more of them in less time. Let the DoT keep a
separate account of how much they are investing in VPT’s
provision, how much is the subsidy they are giving and let
all these deficits be made good from the future revenue
share from P-Telcos from the licence and entry fees and
revenue shares from the p-telcos. This is far more
honorable, responsive and people-caring measure, than simply
defaulting on the VPT targets by the DoT itself and then
blaming the p-telcos for not doing their bit.
Telecom
Revenue Sharing
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That some
members of the TRAI differed from the majority
recommendation that the p-telcos may share 5 percent of
their revenue with the government, holding that the revenue
share could be around 15-16 percent is amazing. Firstly,
revenue sharing is unwarranted. Private couriers who compete
with the perpetually deficit-ridden postal department do not
share their revenues nor do they have an entrance/licence
fee. Similarly, the private airlines and independent power
producers do not share their revenues with Indian
Airlines/Civil Aviation Authority and the State Electricity
Boards or the NTPC respectively. Why is it that the p-telcos
alone are required to share their revenues or pay licence
and entrance fee? It is educative to note that the revenue
sharing by p-telcos is proposed by the operator-licensor DoT
but it itself does not share its revenues. In the 15-member
European Economic Union, the p-telcos share mere 0.08
percent of their revenues and the share is utilized to cover
the costs of licensing and regulation and for nothing else.
In Thailand, there was a revenue sharing agreement but five
years into the business, the p-telcos have moved the
government to convert their revenue share liability into
equity of the government because they find that with revenue
sharing of a significant amount, their business is not
financially viable.The NTP’94
and NTP’99, as well as the ISP’98, and the
pronouncements of various ministers, envisage that
telecommunications services, just like electricity should be
affordable to ever larger number of India’s people. Why
then should costs like revenue share (and entrance fees),
not at all related to the provision of network and services,
be imposed on the p-telcos, making the services offered by
them costlier than what they could be? The argument of the
minority of members in the TRAI that even with 15-16 percent
revenue share, the p-telcos could be viable betrays the
traditional animus of civil servants brought up in a
monopoly, permit-licence-quota system, against
non-government enterprises. It is tragic that the TRAI is
consisting of retired and aged persons some of whom who are
least familiar with economics, finance, business, sociology,
consumer welfare and public policy making. It was expected
that progressive governments not rooted in the philosophy of
state capitalism equated to socialism, would at least have
regulatory bodies staffed with young, energetic,
liberalizing, progressive persons of eminence. Most of the
former bureaucrats are just by their very training, practice
and philosophy not equal to the task of a proactive,
consumer and company friendly and monopoly restraining
regulation. -
The TRAI and
the people of India should demand that revenues from telecom
usage should not be diverted to cover government’s
deficits but that they are utilized for the extension to and
support of telecom and Internet services.
ISP Gateways
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DoT has
constituted a standing committee for clearing the
applications of private ISPs for their international
gateways. The committee includes Department of Telecom
Services (DTS)–one of the Internet Service Providers–while
it excludes other private ISPs. This is discriminatory and
will be destructive and obstructive of the implementation of
the government’s most lauded ISP policy. Fairness requires
along with the DTS, the chief executive of the Internet
Service Providers’ Association (ISPA) should also be
included in the it. Coming closely on the heels of the
including a serving full-time member of the DoT/Telecom
Commission as a member of the TRAI, the nomination of the
DTS into the standing committee raises doubts about the
fairness and bonafides of the DoT in honest implementation
of the government’s policies. The action of the DoT
strengthens the demand that licensing should be removed from
the DoT as long as its telecom operations including Internet
Service Provision are not corporatized and its equity is
disinvested to a significant extent by the government.Internet
Service — Reduce Dial-up Access Charges-
End of
monopoly and introduction of competition in the provision of
Internet services is having excellent results benefiting
customers and the country. Prices have been falling (VSNL
cut them third time on 27 December 1999). Best lowest
tariffs are now as low as under Rs 11 per hour of usage in
contrast to Rs 40 and above per hour in the days of
monopoly. However, the cost of dial-up access at one unit
call charge of Rs 1.20 per three minutes amounting to
Rs.25.20 per hour is more than double the Internet usage
charge per hour! This is fantastic and such expenses do not
obtain anywhere in the world–Rs 25.20 per hour as
telephone charge as against Rs 11 per hour of Internet
accessing. The dial-up access charge must be brought down if
this country is to benefit from Internet more extensively.
Ultimately, competition in local telephone services will
have the same beneficial consequences of reduced prices for
dial-up access also, but in the meanwhile, the least that
the citizen-caring government is to do is to rule that
dial-up access should not be more than Rs 10 per hour for
all educational institutions, libraries, primary health
centers, and students from the high school and upwards. This
special rate may also apply to all rural subscribers to the
Internet, whether the service is from DoT, MTNL, VSNL or
private companies.
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