The Birth of a Corporate

Last fiscal the erstwhile Government-run  Â

monopoly DoT was split into two–DoT and DTS–to differentiate the policy

making and services aspect of its functioning. It was also an attempt to

corporatize DoT in tune with the demands of times.

In the very first year of the corporatization process, DoT

was faced with two challenges–technological upgrade and new business

paradigms. Its telecom network had to be upgraded to carry higher bandwidth. New

equipment capable of not only voice but also data and multimedia transmission

needed to be put in place. Something had to be done to make its massive 4-lakh

workforce more lean and mean. In addition, it realized that it desperately

needed to learn the art of customer care.

Times have changed. Mere realization will not suffice. DoT

must stop being a department and move on to become a resurgent communications

company.

The advantage definitely lies with DoT–one of the largest

networks in the world; several types of communications services that can

complement each other; technical preparedness to implement backbone technologies

like WDM, ATM, and Frame Relay; and access technologies like DSL and fibre in

the local loop.

Here is an analysis of DoT role in three communication areas

of high potential. You can then judge for yourself whether DoT can become India’s

answer to NTT, BT, and AT&T.

DoT, the ISP

The upcoming National Internet Backbone (NIB) can be the

trump card for DoT’s Internet services plans. But it needs to be revamped with

multiples of giga bytes as its throughput rather than the stingy capacity that

it is currently being built for. It has to be equally proactive and probably set

up its own international gateways for international traffic. As a business

strategy, DoT can try to be more aggressive in areas where the "A"

Category ISPs do not have effective presence.

As of today, DoT services about 75,000 subscribers in 65

cities and towns in India. It does so by linking up to VSNL’s gateways in

Bangalore, Calcutta, Chennai, Delhi, Mumbai, and Pune. It was operating

literally with no backbone until the NIB nodes became operational. The already

existing voice transmission links were used as makeshift backbone links. Its

subscriber base is less than that of VSNL and private players like Satyam

Infoway and Bharti BT Internet. It is popularly perceived that DoT is providing

services in remote parts due to compulsion than opportunity.

But will NIB be DoT’s elixir? Will it enable DoT to tap

newer cities and towns? Will it help DoT to gather the largest Internet

subscriber market share? The answer at present is, no.

The objective of NIB is to provide convenient and easy

Internet Access Points (IAPs) in 549 cities and towns across the country. Out of

the 549 points, 45 nodes are already operational. Out of them 5 nodes are of A1

type which are connected to each other in a mesh formation on a trunk line

capable of 8 Mbps (E2) and upgradable to 34 Mbps (E3) and 155 Mbps (STM1) at

later stages. The other 40 nodes are of A2 types each connected to two A1

stations via a link of 2 Mbps (E1) upgradable to 34 Mbps (E3) at a latter stage.

These throughputs appear insufficient for an ISP wanting to

become the most dominant of all the existing players. The planned capacity of

NIB is just 3,00,000 subscribers. This when the nation already had a booming

subscriber base of close to 1 million by the end of last fiscal. This becomes

further questionable considering a recent NASSCOM report, which says that on the

national trunk routes and a few other routes the domestic bandwidth capacity is

already 34 Mbps and yet inadequate.

International bandwidth crunch is another chink in DoT’s armur>>>>>

International bandwidth crunch is another chink in DoT’s

armour. VSNL has just 325 Mbps catering to 1 million subscribers, which includes

ISPs and other bulk Internet customers. This is pathetic considering the number

of ISPs already operational–some with multiple E1 links. The result is a

bullock cart Internet access speed. Without its own gateways and large chunks of

bandwidth at each point, the DoT Internet Access Service (DIAS) will not be any

different.

On the other hand, good bandwidth planning will make DoT

unparalleled as an Internet backbone provider. With its A1 level nodes

functioning as National Access Points (NAPs), DoT will be able to sell bandwidth

to both ISPs as well as corporate customers in addition to catering to its own

ISP subscribers. By putting in Internet exchange equipment, the six A1 levels

can also be transformed into domestic Internet exchanges to ease out the traffic

jam at the international gateway junctions.

On the infrastructure side, DoT has to start thinking in

gigabits and terabits. Where does it stand on the content side? DoT has made a

beginning by putting up its web site and directing its telecom circles to

expedite their individual site preparation. This process can be speeded up to

come up with more national and regional level content so as to develop an ISP

portal with several regional sub-portals.

Mobile DoT

The total subscriber base in the country, presently growing at 85 percent, has crossed the 2 million. The average industry

growth has been 50-60 percent over the last three years. Handset price and

airtime rates are falling drastically. Cash card subscribers can be seen in

every nook and corner of the country. And Caller Party Pays (CPP) regime will

further boost the usage.

Currently, about 6.7 percent of total phones are mobile. It

is projected that by end 2000, it will be 10 percent and by 2010 every alternate

phone would be mobile. Hence, it makes common business sense for DoT to enter

the fray sooner than later. It has to participate in the mobile revolution.

DoT can easily become the first truly national mobile service

provider by setting up a national network. By doing so, it will effect an

economy of scale that will be hard to match by other telcos. Naturally, it will

also be able to take mobile telephony to the remotest areas via its incomparable

transmission links.

Technologically, it can establish proper cellular networks in

the most potential circles while integrating wireless support into its existing

switching system to provide personal communications services in areas without a

cellular network. In fact, C-DOT is known to be developing various mobile

sub-systems to support DoT’s cellular expansion.

The strongest business case for DoT to go mobile is that the

per line cost of setting up and running a mobile network, in terms of equipment

and manpower cost, is far cheaper than fixed telephony. While the former costs

about $600, the latter is pegged at $25,000-26,000. The manpower needed for

maintaining a



cellular network is also negligible compared to fixed services.

DoT cannot remain a silent spectator to the wireless data

revolution.

DoT, the Carrier

Can DoT remain the incumbent and yet become a competitive

carrier? Yes, if it restructures efficiently and makes the right moves and

rapidly.

One, it should stop worrying about losing revenues. The

Indian communications industry is still a green field. The harvest is far away.

India’s current tele-density is around 2.6. As per NTP ’99, it will be 7 by

2005 and 15 by 2010. It means a Herculean effort. We have added 26 million

telephones over the last century; now we are trying to add 146 million in the

next 10 years. The job at hand is to prepare the ground. The harvest will come

on time. Obviously, DoT alone cannot afford the kind of mega investment and

effort required.

Two, while DoT tries to fill the gap in fixed lines, it

should not forget that telephone lines of the future will require high bandwidth

for multimedia transmission in addition to mere voice calls or data calls. For

this purpose DoT will need to revamp its existing facilities–be it in the

trunk network, exchange, or the local loop.

The quality of service–in both voice and data

communications–needs drastic improvement. The leasedlines that DoT currently

provides are replete with problems like poor throughput and frequent faults and

downtime. If DoT wants to prevent large migration of its subscribers when an

alternative emerges, it has to take precautionary measures by building up an

infrastructure that can support various corporate access services.

DoT can play active role when international communications

open up. Its massive domestic traffic and subscriber base will undoubtedly help

it to deal with international carriers from a position of strength.

But first it needs to build a network that can provide

information, communication, and entertainment. An Information Communication

Entertainment (ICE) network is the need of the hour. For this, avoiding

proprietary technologies and going in for standardized technologies is a must.

The key is to use convergence technologies like voice/fax over IP and be open to

new kind of services like Internet telephony, video-on-demand over DSL, free

telephone services that come with advertising jingles, etc. DoT needs to stop

doing the ostrich act every time a radically new technology hits the Indian

shores.

The Socialist Perspective

Suppose it does become one in not-so-distant future, then

what?

The question really loses credibility in the new liberalized

economy. Even otherwise, how can it lay cables and build networks in rural and

remote areas unless it has enough money for the expansion.

Also, the feeling that rural and remote areas are not lucrative may be

unfounded. As has been proved by the cellular service providers in Bihar and UP,

the rural belts of India are waiting for the elusive telephone connection.