Mobile telephony in India: Looking back, looking ahead

India’s mobile telephony journey, like elsewhere, has been that of convergence with telcos evolving as digital service providers. Here is the A to Z of the years gone by.

By Dr. Ishan Ranjan

Voice&Data has been witness to the remarkable journey of the telecom sector – from few months after the NTP 1994 when the magazine was launched to this date when the sector has emerged as the strongest pillar of India’s digital economy. Few months after the launch of V&D, India embarked on its mobile telephony path and the 25-year journey has helped it evolve from being a DoT-centric service to a customer-driven sector. Over the years, the sector has evolved from being a provider of voice-only service to offering everything-as-a-data service and becoming a digital service provider.

As India’s first telecom industry magazine, Voice&Data continues to focus on this convergence between telecommunications, computing, and broadcasting, a general trend that is now emerging as the new norm. And this got represented in different forms.

Technical convergence in the way information is communicated. Computing was the first to store information in digital form. Broadcasting was the last – High Definition Television (HDTV).

Functional convergence is the way services would be consumed. Back in 1995, there were three distinct networks. Today, 25 years later this functional convergence is clearly manifested in the cell phone – with voice, data, and video.

Corporate convergence in the way services are supplied. Already telephone companies are positioning themselves to be able to supply software (information content) as well as just supplying the hardware (information carriage).

Whether they choose to do so through strategic alliances or through outright mergers and acquisitions is a secondary issue that will depend largely on the regulatory position in the country. However, what is most important is to gain a piece of the action.

While the growth in mobile has been great, rural and remote areas

still need to be covered. The pandemic has highlighted its

importance even more.

Of course, convergence implies not only the entry of telecommunication companies into computing and broadcasting but also the entry of firms from these markets into telecommunication. And the impact of convergence has been positive – it has brought new ideas, investment, and innovation. No doubt then, cellular has been an important manifestation and has benefitted the consumer.

Here is the A to Z of India’s telecom sector journey.

A – Airtel

In an interview with Voice&Data 25 years ago, Sunil Bharti Mittal had said, “If the floodgates open, we are ready”. Bharti Telecom at that time had revenues of Rs 45 crore. But he promised that by the year 2000, Bharti would be a big company – with varied products and services. Today, Airtel is one of the key players in the Industry.

B – Big business

After years of protectionism and bureaucratic control, when the sector was opened for private participation – several big business houses – Aditya Birla Group, Reliance Industries, Tatas, RP Goenka – to name a few, showed keen interest. Bharti was not considered a big group then.

C – Chinese checkers

Even 25 years ago, we were tracking the Chinese. Officials at DoT used to say, do not compare us with the West, China maybe. China had 620,000 mobile phones then, we were starting out.

It certainly is not a question of numbers alone, it is a question of enabling a nation’s growth, that of access to the people. Today access has grown, but the COVID-19 crisis has also highlighted the divide.

D – Digital divide

Earlier, when the country was starting out on its mobile journey, the divide was with other Asian countries. Today, while the growth in mobile has been great, rural and remote areas still need to be covered. The pandemic has highlighted its importance even more.

According to recent reports, 39 school students in Tsuruhu village of Nagaland have been taking online exams inside a dense forest. While a moderator dictated questions to the students from a smartphone – one of the only three in the remote village – the students write answers on sheets of paper, which is then clicked and uploaded to the school.

E – Empowering

I was talking to DOT officials in 1995 and they said there is not much demand for phones. “There are some waiting lists, but we can meet them.”

Today, mobile is a means not only to see (reading the news, watching videos, and listening to music), but also to search (researching topics of interest – such as health tips, recipes, and ideas around home décor), socializing (interacting with others), selling (selling goods and services online, for personal or professional reasons), saving (managing personal finances through online banking, trading and investing), studying (accessing study materials and other resources and taking online courses), and shopping (through e-commerce).

In 1995, Dr. N Seshagiri had warned against bottlenecks and monopolistic tendencies of DoT, which would put hurdles in the way of private

sector participation.

F –Financing

In 1995, Dr. N Seshagiri, Director-General, National Informatics Centre had advised the industry to do an impact study on the conditions laid down by DoT for private sector entry into value-added services (VAS). Mobile was a VAS. The study would enable them to identify ROI – before investing in the sector.

He warned against infrastructural bottlenecks and monopolistic tendencies of DoT, which would put hurdles in way of private sector participation. It was also pointed out that the DoT network – a combination of digital and analog – would render difficult, superimposition of value-added networks.

While financing continues to remain an issue even today – the viability of mobile players – apart from a few, face challenges. However, the bigger irony is the viability of BSNL and MTNL in its current organizational form.

G – GSM

GSM was the European digital standard and was being touted as the most suitable technology for India as far as WILL (discussed under W) was concerned. It provided a very good speech quality, national/international roaming facility, and promised error-free transmission and encryption facility.

It also promised efficient spectrum usage and better handling of heavy traffic. So, it was considered better suited for metros like Mumbai and Delhi back then. However, despite its technical superiority, it was expensive. This was a concern for India. Balancing its technical advantages with economic ones was important.

GSM was the cellular technology being deployed by companies like Ericsson and Nokia.

The GSM handset in 1995 was priced in the range of USD 800-1,000, comparable to what was available in other Asian countries like Thailand and Malaysia.

H – Healthcare

In August 1995, Dr. Mahesh Mangal, Consultant Plastic Surgeon in Delhi, in an interview said, “In our profession – pagers and cellular phones are a must. It is a question of saving a life if the doctor can be reached faster. We just can’t do without these”.

Back then, mobile phones were an urban phenomenon – more for the metros. Today, that has changed. The integration of medicine with mobile – telemedicine is a key driver for strengthening the healthcare infrastructure in the country.

I – Infrastructure investments

In 1995, investments for infrastructure were being planned for the two western states, four southern states, and NCR. Significant private sector participation was expected to happen in the coming year, including over USD 22 billion investments by 2000. The industry expected USD 35-40 billion in revenues from services. The optical fiber transmission system was meant to be a major area of growth.

Today, the question is – bandwidth or mobility?

Reliance had been involved in the industry, right from the early days.

It had submitted an ambitious proposal in August 1994 –

Project Win 2000 to DoT.

J –Jio

Reliance had been involved in the industry, right from the early days. It had submitted an ambitious proposal in August 1994 – Project Win 2000 to DoT. This was to build and operate a nationwide telecom network. The company aimed to provide 10 million telephone lines over the next ten years that would have helped meet 60% of the country’s demand for new telephone lines within three years.

Reliance has always demonstrated ambition. With Jio today, it is the company to watch – not only its services across the spectrum but also the stock price.

K - Knotty challenge

Mobile communication networks have always been a knotty challenge. Communication networks have been new railways.

Kabuliwala is a reference one reads a lot in Tagore’s works. It was the railways set up by the British that allowed traders from as far as Kabul to come and conduct business in Calcutta, the hub of commerce at the turn of the 20th century in India.

Communication networks are the new railways. As the services sector is driving the economy, phones are required to drive the increasingly digital economy, in the global marketplace. But putting up that network is no mean task. There are many balls in the air. Untying the knots is imperative even now.

L – Leap into the future

Twenty-five years ago liberalization brought a leap into the future. From a telephone density of 0.8 per hundred, India was planning dramatic improvements. The country intended to add three million lines every year for the next three years. In other words, from eight million lines in 1994 to 17 million lines in 1997.

The focus was that if India is to stay globally competitive, its communication infrastructure needs a quick fix. Just providing a connection was not enough and it was important to a basic level of service to the customer.

Value-added services – of which mobile is a part – would help in greater call competition, and therefore, more revenue for DoT. But there was silence on this in 1994-95. There was talk of a higher license fee for these services, which would eventually be passed on to the consumer.

M - Metamorphosis

The launch of cellular services 25 years ago was the beginning of a metamorphosis. It brought in competition – which means choice for the Indian customer. It encouraged the entry of Indian, foreign, and JV operators – which brought in new technology, embraced entrepreneurship, and professional management. And most importantly saw Indian telecoms, not as an end in itself – but important to power India’s economic growth.

Cellular phones have been getting smaller and smaller – technology has enabled “miniaturization”.

N – Network economics

Network economics have driven the implementation of mobile. There have been two divergent trends having a major impact on the nature of supply and demand mismatch. -

• The mobile communication system was initially developed as a complement to the fixed-link network, but increasingly as a substitute or competitor to it.
• Increasing investment in fiber in the basic transmission network, initially in the international and long-distance network, but increasingly now in the local loop – delivered directly to home or desktop.

The evolution of these two trends fundamentally changed the nature of the supply-demand equations in several different ways – network access, network provisioning, and network pricing.

O – Optical fiber

Transmission systems represent the major fixed asset of most telecommunication network operators, and therefore their main source of competitive advantage.

Increasing use of fiber optics within both public and private networks that started at the inter-exchange and international level trickled down over time to the backbone networks and to the local loop.

One sees an increasing deployment of optical fiber as data exchanges and the number of subscribers increase – cellular/mobile and the internet.

P – Policy

The Government of India (GoI) had with the new policy tried to promote growth, from a culture of monopoly to a culture of competition, from a culture of scarcity to a culture of plenty.

In our country, the focus was to try and utilize our resources in an optimum and appropriate manner. Try and avoid waste

GoI continues to be a major factor – it does control the clock – Tik Tok, Tik Tok. But Indian consumers are emerging as major influencers.

Q - Quality of service

Even when there was general agreement on much-required reform, nothing worthwhile was done by DoT to improve the quality of services, and facilities offered to the consumers. The poor bill collecting system of the DoT caused great inconvenience to the consumers. The long queues of people lined up for paying their phone bills spoke loud and clear of the inconvenience.

R – Regional developments

Balanced growth has been GoI’s favourite concept. In the future, as in the past – it is likely to remain just that – a concept. In 1995, the government continued to talk about balanced growth. Back then when we were fast changing into a market economy – we must accept the realities – prices, shortcomings, or whatever one might call them. The fact was that some states had much more unmet demand than others. It was not surprising that private operators were all vying for those states – Maharashtra, Gujrat, Karnataka, Kerala, Tamil Nadu, Andhra Pradesh, Punjab, Haryana, and the National Capital Region.

Today, twenty-five years later, the regional imbalances are more urban and rural.

S – Supreme Court

Cellular Services experienced several stumbling blocks – areas of operation, tariff and revenue sharing, manpower, technology, and quality of service. In August 1994, a three-member bench comprising Chief Justice MN Venkatchaliah had asked the government to reconsider the licensing scheme for operating cellular services.

Sterling Cellular and BPL Systems in New Delhi, Usha Martin in Calcutta, Skycell in Chennai, and Hutchinson Max in Mumbai were shortlisted. Bharti had an interesting case. Their bid for Mumbai was challenged by Tata Cellular on the basis of their experience claim. But they were hopeful of eventually getting the license for Delhi.

Courts had been the catalyst in moving the process along. And it holds true to date.

T – Technological change

Changes in the telecommunication equipment sector characterized by digitization of exchanges, new transmission techniques, computerization, and miniaturization has greatly enhanced the capabilities and capacity of communication networks.

As a result of technological advances, new services – value-added services, cellular services, and image-based services have become available. Infrastructure costs have declined – due to increased capacity and functionality. This has benefitted the customer.

U – Unauthorised calls (Spams)

India was the fifth most spam-affected country in the world in 2019 according to a True-caller Insights Report 2019. However, the number of unwanted or spam calls has gone up 15% in two years with users receiving 25.6 additional calls per month.

Nearly two-thirds of these unwanted calls are from telecom operators. Interestingly, telecom operators happen to be the biggest spammers globally. The rest include telemarketing calls (17%), communication from financial services (10%), and scams (6%).

This was obviously not something one had to contend with, back in 1995.

V – VSATs

January 1995 saw the launch of the VSAT network in the country. DoT conditions limited VSAT data network usage to a closed user group – with further limitations on voice. It also insisted on allowing VSAT operators access only to the extended C band frequency – the direct result of idle capacity on INSAT 2 series – A and B satellites.

Launching a satellite in 1995 cost USD 300 million, while a shared hub VSAT network service cost Rs nine lakh per remote site. Key demand drivers were the financial services sector and corporate users.

Today VSATs and their smaller cousins, USATs, have proliferated.

W – Wireless in Local Loop (WILL)

The shift from fixed wire systems to wireless networks can be compared to the shift from gaslight to electric bulbs, and from trains to airplanes. In WILL, the wired connection between the telephone exchange and the subscriber’s instrument is replaced by radio links.

But WILL is not synonymous with radio links. Most of the communication is through the wire, just like an ordinary phone call. It is only in the last mile – that the call is transmitted via radio. Demand was getting identified in industrial clusters in states like Maharashtra, Gujrat, Karnataka, Tamil Nadu, and Haryana.

These systems also played an important role in providing access to phones in rural areas. Their importance continues.

X – Factor

N Vittal, the former DoT Secretary was a key influencer in driving the liberalization process. The 1994 Telecom policy was a vindication for what he was trying to achieve, although a partial one.

The policy was a logical extension of the structural reforms initiated by the Narsimha Rao government to revamp the Indian economy – and integrate it globally. If India wanted to compete – a state of the art communication infrastructure was mandatory.

In that respect – the policy was a letter of intent - a welcome beginning

The policy was about bringing in liberalization – and Vittal was seen as a friend of the Industry.  He wanted to quicken the process, while the Minister wanted to go slow. He was keen to corporatize DoT, bring in competition and professional management.

Today the numbers speak for themselves. For example, from April to December 2019, the public-sector BSNL recorded a loss of Rs 39,000 crore; two and a half times more than the corresponding year.

If only Mr. Vittal had not been dispensed with, when and in the way he was – the path and pace might have been different.

Generation Y and Z

With elevated awareness and usage of the internet, mobile devices, and social media – they will drive mobility to newer heights. And help introduce and improve new services.

The next 25 years

Digital connectivity has been an enabler of multiple kinds of mobility – social, economic, and informational. Companies in the mobility ecosystem have done tremendous service during these COVID times.

The next 25 years will be about IoT connectivity, low latency connectivity, 5G enabled network across the country, ensuring that digital payments, online activities, e-commerce, health services, agricultural services, government subsidies going into mobile accounts are all effectively done through a robust mobile network.

The network will get better. And so shall mobility.

The author Dr. Ishan Ranjan is Vice President, OzAsia Solutions (IBM Ecosystem) and the first Editor of Voice&Data

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