The Birth of a Corporate

Last fiscal the erstwhile Government-run   
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

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.

Status of Telecom Service
Mar 98Mar 99March 00Target 00-01
Total DEL (telephone connections) 178.02215.94265.10320.9
Total switch capacity in terms of DELs 225.31




Total No. of TAX lines 12.6114.67 19.4724.62
OFC network size76,254108,025149,271271,290
Microwave network size135,262 149,271169,152179,152
(Inclusive of MTNL data)

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

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

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

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

The Socialist Perspective

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

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. 

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