One of the major bottlenecks is the lack of direct interconnectivity among Saarc countries

The Indian telecom sector has shown phenomenal growth. The tele density,
which grew only by 5.1% in fifty-five years (1948-2003), grew by 21% in the past
five years. As on August 31, 2008 the tele density stood at 29.83%. Thanks to
several steps taken by the government, telecom regulator and operators, the
mobile subscriber base in the country is growing by about 8 mn per month. During
2007-08, listed telecom companies have reported EBITDA margin in the range of
36-42% despite the decline in ARPU. Minutes of Usage (MoU) in India continues to
be the highest after the US.

Nripendra Misra, chairman, Telecom Regulatory Authority of India, has
played a vital role in bridging the digital divide. He feels telecom systems are
pivotal to the development of an economy. The developments in the
telecommunications sector have multiplier effects on the country's economy and
its contribution to national GDP is estimated to be about 3%. He says the main
focus of service providers in the Saarc region needs to be to provide
connectivity at affordable rates to the rural population, improve quality of
services particularly with respect to coverage, network congestion, customer
care and billing complaint resolution. Excerpts

What role is mobile technology and broadband playing in reducing the
digital divide in the country?

The introduction of mobile telephony has changed the communications scenario
in India. It has penetrated from metro areas to the villages, from the rich to
the common man in small towns and villages. The growth of mobile services has
also created a large market and generated considerable employment opportunities,
particularly in delivery of services, manufacturing of handsets and telecom
equipments, IT enabled services such as BPO and telecom software development,
etc.

The mobile subscriber base which was 0.34 mn as on March 1997 increased to
261.07 mn by March 2008 and to 296.08 mn by August 2008. The effective charge
per minute for mobile, which was Rs 15.32 in March 1998 is less than one rupee
as of now. The tariff had started falling with the introduction of WLL services
and the entry of third and fourth mobile operator. Currently, the mobile
subscriber base is growing by more than 8 mn per month and India is now the
second largest network in the world, after China, and our rate of growth is the
fastest in the world. Indeed the landscape of the telecom industry has
significantly changed with the introduction of mobile telephony.

Wireless technology is seen to have the potential to penetrate telecom
services in rural and remote areas in a cost effective manner. The deployment of
Broadband Wireless Access (BWA) technology is expected to increase the
penetration of Internet and broadband in the rural areas. These efforts will
lead to bridging the digital divide in the country.

What is the outlook for the Indian telecom industry?

The telecom operators in India have a lot of scope of development, keeping
in view the low tele density especially in the rural areas. Value added service
is another emerging area. With increasing popularity of multi-media services and
migration to Next Generation Network, broadband penetration is also likely to
grow. Because of the entry of new operators who have been licensed recently, the
telecom sector in India is poised for the second phase of intense competition
and this will benefit the customers by way of further reduction in tariff and
improved quality of service. Thus, there are opportunities and challenges for
telecom service providers and equipment and handset manufacturers.

What are the major issues and challenges facing the Indian telecom
industry?

The major issues and challenges before the Indian telecom industry is
universal access, penetration of telecom services in rural areas with affordable
tariffs and viable incentives to service providers to achieve these goals.
Internet and broadband penetration, equitable distribution and efficient
utilization of spectrum are the other major challenges. There is an urgent need
to frame a long-term spectrum management policy, which is fair, transparent, and
predictable.

What should be the main focus of service providers in bringing down the
digital divide in the Saarc region?

The main focus of the service providers needs to able providing connectivity
at affordable rates to the rural population, improve quality of service
particularly in respect of coverage, network congestion, customer care and
billing complaint resolution. Mobile penetration, broadband wireless access and
Internet penetration are basically the key inputs for development of rural
economy and socio economic development. Low penetration is mainly on account of
high cost of equipment. Sharing the experience and benefits of wireless
broadband technologies like 3G, WiMax, etc would be useful for wireless
broadband deployment in rural areas. Another emerging area is Next Generation
Network (NGN). A lot of development in this regard is taking place in the
developed countries and therefore there is a need to share these experiences and
expertise for large scale deployment of NGN in the Saarc region.

What is blocking cooperation among the service providers in Saarc
countries?

There is a need to have closer cooperation among service providers of the
Saarc region for connecting international telecommunication links. The lack of
direct connectivity through fiber is leading to high tariff structure in Saarc,
as the international traffic through satellite link/submarine cable continues to
be in high proportion. There could be many other socio-political issues which
need to be deliberated upon at the government level to remove the bottlenecks.

What are the major telecom issues in the Saarc region?

The Saarc region is characterized by high rural population and a difficult
geographical terrain. The penetration of telecommunication, services is
considerably increasing in urban areas but still the penetration of telecom
services in rural areas is not matching. This has created the so called digital
divide, which is increasing even with the phenomenal growth of mobile telephone
services. Low penetration of Internet and Broadband is also one of the major
areas of concern. The efforts need to be taken for standardization of low cost
customer premises equipment such as modem, handheld computing devices and
computers. The Saarc region has a high roaming tariff structure which needs to
be rationalized through mutual cooperation and understanding. One major
bottlenecks is the lack of direct interconnectivity among Saarc countries.
Presently, large volumes of telecom traffic is handled through satellite links
in absence of direct fiber connectivity. There is need for a hub/international
gate way on sharing basis for handling telecom traffic among Saarc countries.

What would be your suggestion to solve some of the burning issues in the
Saarc region?

One of the burning issues is penetration of telecommunication services in
rural and remote areas, ie, to provide access. Lack of infrastructure support
such as non-availability of electricity and bad roads continue to hinder the
growth of telecommunication services. Therefore, there is a need to promote R&D
activities particularly for developing low power consumption telecom equipments
that can run without air conditioning. Similarly, solar and wind energy could be
used as an alternative means of power for telecom equipments.

In addition to above, there is a need to evolve technical solutions for
technical problems through bilateral/ multilateral dialog and sharing of
experience and expertise. There is need to have an information super highway
connecting various Saarc countries. This will virtually lead to the benefits of
a collapse of boundaries for handling telecom traffic and connecting the people
in the Saarc region. Multi pronged strategies could be evolved through
facilitation at the political level and also telecom regulators in the region
can play a strategic role with regard to telecom development.

Baburajan K and Prasoon Srivastav

baburajank@cybermedia.co.in