Progress Assured

The NTP ’99 was one of the major developments that

happened last year. It is being said that it will turn the fortune of the Indian

Communications Industry. Voice & Data discusses with Dr Mrityunjay B Athreya

what NTP ’99 holds in store for the Industry.

Why do you think the telecom

business has not taken off the way we expected it to? Are the reasons sector/policy

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There are two broad categories of

reasons. One, errors in the process of deregulation of the telecom sector. Two, the

slowdown in the total restructuring of the Indian economy. We are more concerned here with

the first category. The single most crucial failure has been of the Ministry of

Communications (MoC) to completely hive off its telecom service business and focus only on

policy.

The Indian Telecom Service, the

techie wing, has been misleading the successive administrative civil servants and

ministers. Thereby, sabatoging the reform process and protecting its turf in the name of

the sacred cows of rural telephony, security, etc.

All other good steps, such as

setting up of TRAI, cellular, paging, and basic licensing have been poisoned by this

cancer in the system.

As an Indian do you still hope

things will be fine in a definite time frame?

I am, of course, still hopeful.

The logic of multiple stakeholders, especially the customers, the economy and the people

will compel corporatisation of the operator DoT, and cure the Department of the

schizophrenia of being both the player and the regulator. If Sitaram Kesari had not

foolishly toppled first the Deve Gowda ministry, and then the Gujral ministry; and if the

President had not precipitated this election, the change might have happened by now. We

may expect progress in the fiscal 2000-01.

Is progress assured?

Yes, progress is assured. The

policy seems to be moving towards a broad bipolar governance, with coalitions led by one

of the two leading parties–the BJP or the Congress. Whichever formation comes to

power, further liberalization and globalization will accelerate. The government in power

will want to catch-up on the lost years. There is, already, some discussion on the

second-generation reforms.

There is a new feeling in

business circles in the last few months that business is becoming more and more

independent of the government. People have to find ways to do business amidst the

political uncertainty. How do you react to this view?

The whole purpose of economic

reform is to make business less dependent on the government. We achieved it first in FMCG,

then in durables, commodities, components, and services. The most difficult areas have

been infrastructure, including telecom, power, roads, ports, etc. The neta, babu,

inspector raj drags on. Still, business has been getting more degrees of freedom.

Is there any way by which we can

grow despite political instability?

There is no political

"instability" in India. It is one of the most stable political systems in the

world. Military, administrative, religious and other organizations are subordinate to the

elected government. There have recently been some political delays, with change of Prime

Ministers and mid-term elections. But there is emerging multi-party concensus in many

areas of reform.

Do you think a strong

manufacturing and/or research base is a precondition for overall development of telecom

facilities in India?

More local manufacturing, in the

form of more value-addition will take place naturally, as the volumes go up. This will

require full deregulation. The production may be substantially by MNCs and their JVs in

India. Still, the investment, jobs, and multiplier benefits will accrue to the Indian

economy. As the network expands, replacement and modernization demands build up, one can

expect some serious Indian players with technological, manufacturing, and cost competence.

How sensitised is the Indian

business user to the role of technology in his business? At what stage will his demand

push up things in the technology industry in India?

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The Indian business user’s

awareness of global technology, products, and services is increasing. He is probably more

worried about the quality, reliability, and sustainability of such services in India. Once

the assurance is high, the latent demand will materialise.

Will you elaborate a bit?

IT users from the Indian

corporate, home, and other sectors have been travelling across the globe for two decades.

They are much more itinerant since the liberalisation of 1991. Many of then have their MNC

headquarters, affiliates, relatives, and friends abroad using the latest IT equipment,

systems, and software. They have great jigyaasa. They are pining for the day when

such access will be available in India. As long as the DoT is the dominant long-distance

provider, and VSNL has a monopoly of gateways, line availability, uptime, call completion,

quality of transmission, speed, bandwidth, etc., will all be below international

standards. It is similar to the criminal damage to Indian capital equipment from the

atrocious voltage fluctuations and cycle variations of State Electricity Boards (SEBs)

transmitted electric power.

The following steps need to be

taken before this latent demand becomes a major driving factor. The DoT has to be

corporatised into one or more entities. GoI stake in VSNL, MTNL, and the new PSU telcos

should be brought down to 49 percent or less. There should be free entry and competition,

at the entrant’s risk, into international and domestic long-distance services! Then

the system capacity, reliability, quality, and service innovation will go up. Demand will

explode. In infrastructure, capacity creates demand. All this, I hope, will happen in the

next three years. The year 2002-03 may see an exponential takeoff.

Are you satisfied with NTP

‘99?

Partly. It suffers from not

having completed the triangular restructuring model, recommended by the Athreya Committee,

1991, namely,

• The GoI, MoC, DoT to be only in the policy vertex
• TRAI as a respected, independent, quasi-judicial
  
  regulator
• All telecom operations in a pluralistic,
  
  competitive market, with non-sarkaari players

So, the NTP ’99 could not go

far enough to release the telecom energies of India.

How do you see the future of

Internet business in India? Will the "no entry barrier" strategy work?

In principle, the Internet

business has a massive future in India. If telecom density reaches 15 percent for a

population of 1.2 billion by 2010, it means a mind boggling 180 million line network.

India Internet will be a world in itself. It will, of course, be also linked to the GIIC.

The interactive volumes will be stupendous. The "no entry barrier" strategy will

run its course–overcrowding, shakeout, and workable competition.

There will be costs of

competition, innovation, and failures. But they may be worth paying for the benefit of the

customer and the global competitiveness of the Indian economy.

hspace="4" vspace="4">In succesive governments

since 1991, the initiative for radical reforms have been coming from the

PMO/finance/commerce ministries rather than the administarive ministries. How do you see

this trend?

This is unfortunate, but has been

necessary, in the national interest. The MoC and secretary, (telecom) have been

partly misled by the sarkaari operator DoT into a parochial position of defending

its turf, rather than serving the wider national purpose. The Prime Minster should choose

a minister with the mandate, competence, and passion to liquidate his own inherited legacy

dunghill, so that the country’s IT sector can surge forward.

How do you see the DoT in 2005?

By 2005, the DoT will be a slim,

efficient policy body. It will respect, consult, and support TRAI, as a partner in the

renaissance of Indian IT. It will play a facilitator’s role in enabling the

Indian telecom sector to optimize domestic and global opportunities. One could also see

convergence between telecom, broadcasting, and information.

Last year, a number of states

released their IT policies. Many state governments are now taking steps to take technology

to the common man. How do you see this trend?

This is a healthy trend. India,

including her telecom sector, is too large to be managed from Delhi. These state

initiatives will move telecom closer to the power sector type of variety—flexibility,

healthy competition, transformation, and emulation of better practices.

What, according to you, will be

the opportunity areas for Indian technology business in the next few years?

At the broader level of the

Indian economy, Indian firms have the opportunity to develop technologies in pharma,

agro-inputs, agro-processing, and several areas of manufacturing. The scales will expand

to justify critical mass R&D investment, as India takes her place among the top four

economies of the world. In IT, we can make a significant contribution to software

technologies. Indians are already doing it abroad, especially in the US. They are

innovating both in independent start-ups and inside large firms.

What technological changes do we

need to succeed in the new business environment globally? Are you hopeful about these

changes taking place?

We need a whole range of

technological changes across the value chain—technologies relating to materials,

components, energy and other inputs; processing; process control; packaging; distribution

logistics; service; management systems for planning, information, decision, control,

learning and knowledge management. I have no doubt, whatsoever that the Indian promoter,

manager, worker, vendor, dealer, and customer are capable of embracing these changes. The

sarkaari system of 1950-90 was wrong. We are correcting it. India will fly.