'We Fully Own this Policy' - Anil Kumar, secretary, DoT.

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What was the need for a fresh telecom policy? Was

NTP ’94 bad or inadequate? Or was there a problem in its implementation?

NTP ’94 was a good policy.

It was formulated with the best of intentions at that point of time. (But) in a dynamic

situation, new developments keep taking place. Since 1994, there have been significant

changes. TRAI was set up in 1997. Also, the country got its priorities set–we want to

be an IT superpower. All these suggest one dimension of the change. On the other side,

there have been new technological advances. Today, we see the phenomenon of convergence.

Internet is spreading phenomenally. Taking into account the changes that are taking place

and the anticipated scenario that would emerge in the next couple of years, I think, it

was very appropriate for us to go for a new policy and equip ourselves better to take the

challenges of the new millennium.

In 1994, we were one among the first few to

try out reforms. Many countries have liberalized their telecom markets after we did it.

Has NTP ’99 taken any cue from the experiences and mistakes of those new markets?

While we have before us the

experiences of other countries to emulate from, we have to evolve our own model. Each

country has its own priorities and its own problems. The challenges that we have got in

India are unique. While we claim to have the tenth largest network, our teledensity is

two. Half the villages are still uncovered. Today, we have reached a stage where we are

adding about four million lines a year, but we still have miles to go. If on one hand, we

have the priorities of expansion, connecting the villages, tribal areas, remote areas, the

North-East areas, on the other we need to have a world-class data network–a

high-speed data network for the IT sector.

If you see the new policy

regime–the licensing policy and the further liberalization in NTP ’99–you

will see that there have been major changes to meet these challenges. The World Bank is

also having a look at our policy framework. International experience will also be

available to both our government and the industry.

 

Speaking of international experience, one

constantly comes across the indigenous versus foreign debate. Has that impacted the NTP

’99?

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reforms, initiated by the NTP ’94. It has done so by opening up new opportunities for

investment.

In the telecom sector, India can

be proud of the fact that we do have our own technology. We have indigenously developed

technologies like the C-DOT technologies, designed specifically for extreme Indian

conditions. We have also seen the best of the global technologies coming to India. The

companies who own these technologies are setting up their manufacturing bases in India.

Therefore, there is a fast technological upgradation.

I feel we have a nice blend of

both indigenous and foreign technologies. It is a good balance.

 

How do you see the positioning of DoT? A framer

of the policy, an implementor, or a player?

I guess what you are referring to

is the involvement of DoT in the policy formulation process. The formulation of the new

telecom policy was done through a wider process of consultation, involving many

departments and ministers. We are fortunate that in October last, the Prime Minister AB

Vajpayee was also the minister for communications. And therefore, we got this opportunity

to have the Group on Telecom (GoT).

The setting up of the GoT was a

very thought-provoking step. I would say a very innovative idea. It involved all concerned

departments and ministers. We also involved the bankers–ICICI–so that meaningful

discussions could take place. Yes, it is DoT’s responsibility to prepare the telecom

policy and also to implement it. But it does not mean that today, we can do anything on

our own. That is why, today any matter that concerns more than one department, either goes

to the committee of secretaries or to the cabinet. GoT was a very high-powered body, set

up by the Prime Minister to take care of all such matters and push things in a time-bound

manner. It must be remembered that GoT was set up on 20 November 1998 and within a period

of four months or so the new policy has been announced and that too in consultation with

the industry. If you are aware, we had put the discussion paper on the Web and had

thousands of responses. For all this, we are grateful to the GoT.

We were part of the GoT and you

know that it was suggested by DoT. We fully own this policy. This is our policy. So, I

think, it is not at all right to have the perception–or even support the

perception–that there was no convergence of DoT and GoT.

 

A good section of the industry thinks more

radical reforms were not spelt out, because of the resistance from DoT ...

GoT was set up on 20 November

last year. And within five days, we (DoT) prepared a discussion paper on the new telecom

policy and placed it before GoT, for the latter’s consideration in its first meeting

on 28 November.

When discussions take place, many

bright ideas come up. Some of our ideas would also be bright. But when we have discussions

on those, consensus becomes important. After all, DoT is responsible for the telecom

policy and we have our experiences in the sector. Therefore, if we have suggested

something and that has been accepted by GoT, I think, there is merit in the argument.

Similarly, if some good points have come from outside, it has been accepted. Now, if

certain content of the policy has not come up to expectation levels, it is a different

matter. Whether it is the restructuring of DoT, opening up of the long distance, or the

role of TRAI, the policy is very clear on that.

But as you will appreciate, in

the telecom sector, the economic reforms have to be at a measured pace. And therefore, it

is very necessary to operationalize only the right idea. For example, there could be

different viewpoints on whether the long distance should be opened on 1 January 2000 or

immediately; or should Internet telephony be allowed or not. It is not a question of only

DoT having a viewpoint. It is not that we do not have good ideas. But when you see it in

the context of the implications of (implementing) those ideas for the sector as a whole,

it is DoT’s responsibility to point that out. And therefore, based on that, the

decisions are taken by GoT or the Cabinet.

The issue here is of the perception in the

industry, not that of right or wrong. The question is how would it be possible for you to

smoothly implement the policy, if the industry is pointing fingers at you for not

implementing it in the spirit in which it was formulated?

I do not think that is the right

way to look at it. After all, it is a policy, which has been approved by the government as

a whole. As the minister has said we are committed to the policy. And there should not be

any apprehension regarding that.

Last time, i.e., in 1994-95, a

lot of problems cropped up during the implementation, as many a decision was taken by DoT

at the last minute–like capping. Many fear, that might be repeated.

At hindsight, one can always say

whether a particular decision was right at that point of time or not. After all, even the

1994 policy was an open, market-oriented policy. The licensing policy at that time was

also formulated with the best of intentions and advice that was available then. If things

have gone wrong about the implementation of the licences, it is not because the government

reversed any policy decision. But maybe because, as everybody including the industry says,

the market has not developed as much as we expected. Now, we all have learnt the lessons.

Our new policy framework recommends a different licence regime.

 

Licence fees was considered the best method to

ensure total transparency and neutrality last time. This time, you are going for a

different structure. So how do you plan to select the operators?

As you must have seen in the

policy document, it is not that it has been opened up fully. It is a controlled

deregulation. Say, for example, in basic services, at present there is duopoly–one

private licensee and DoT. Now, the policy says there could be multiple operators. The

licensing structure could be a one-time entry fee and also revenue sharing. We would be

seeking TRAI’s recommendation on the number of licences.

Talking of the implementation of

1994 and 1999 policies, one big difference this time is that we are going to seek

TRAI’s recommendation. TRAI is going to see what should be the extent of competition.

When you have a limited number of players, there has to be some selection criteria. It is

not that somebody just comes, pays a fixed amount, and enters. We will seek TRAI

recommendation. One option could be we will charge a percentage of revenue as a licence

fee during the licence period and whosoever bids the maximum amount up-front as the

one-time entry fee, gets the licence–one, two, three whatever is the number. So based

on the selection criteria recommended by TRAI, the government will grant the licences.

 

What are the implementation milestones that you

have in mind?

There are two to three key

milestones. One is the opening up of the long distance. That, as specified in the policy

itself, will happen by 1 January 2000. The framework for it will be ready by 15 August. We

will seek TRAI’s recommendation before that. The second important milestone is that

of DoT restructuring. DoT services will be created as precursor to the corporatization of

DoT, which will happen by 2001.

 

Don’t you think that the terms and

conditions for licensing in vacant circles should come before the framework for long

distance opening up–by August 1999?

I do not see a problem there.

Maybe, those conditions will also come by that time.

 

You are not rigid about those time frames ...

No. We would like to do it at the

earliest so that investment opportunities are opened up at the earliest.

 

There is no time frame in the policy on finding

out a solution to the problems of the existing operators ...

One of the terms of reference for

GoT was to look into the problems of the existing operators. We know that they are having

problems. But there are legal issues. We are seeking the opinion of the attorney general.

Within the legal framework, we hope it will get clarified soon.

 

There were expectations that the new policy would

bail out the existing operators from the current problems. Do you believe this is

justified?

It is not a question of bailing

them out. The government never said it would bail them out. It only said we would look

into the problems. We would like to see that the existing licences are also implemented.

And if they are successfully implemented, we will get our licence fees. But one has to

work under the legal framework and find the best solution.

 

What is your personal opinion on the nature of

the problem?

Everybody agrees that the

prospects here are good. Problems will exist in the initial years, when the market segment

has not developed. But in the long run, these are profitable businesses.

 

There is a lot of confusion. On one hand, you

talk of trying to solve the problems. On the other, we hear of DoT encashing the bank

guarantee, threatening to cancel the licences, and so on. What is the correct position?

Let us not go deep into this

problem at this point of time, as the Attorney General has to give his views. But I just

want to make a point. The licensees quoted certain amount of licence fees. The obligation

of the department is to ask for the amount that is due to it. These amounts will not come

to DoT. It will go to the consolidated fund of India. Yet, we are under obligation. At the

same time, what we say, is that in case you have problems pay 20 percent. It is not as if

we have asked for a lot.

While you have the existing operators with one

set of terms and conditions, the new operators will have another set. Do you think it will

be level playing and fair?

Even now, there is a difference

in the licence fee structures in metro cities and the circles. Let us see whether there

will be fair competition or not. Let us wait for the TRAI recommendations.

Have you identified any specific problems within

DoT? If yes, as the chief of DoT, have you devised any plan for a time-bound eradication

of those?

I have been in this department

from September last. I have enjoyed working here so far. And I hope, I will continue to

enjoy it in the future. We are all working together. We have decided to restructure the

department.

DoT is expanding very fast. More

than four million lines are getting added every year. New posts are also being created. We

have to have our systems improved.

Telecom services in the country

cannot be managed only from Sanchar Bhavan. I am happy that soon after my

joining—around mid-September—we had a meeting of all CGMs of circles, where we

had good suggestions coming from the CGMs on how to expedite the procurement procedures.

So from 1 April this year, we have decentralized purchases of about 47 more items. We are

going in the direction of systems improvements. And this is one area that is important

because empowerment of field officers is very necessary. The decision has to be taken near

the customer. I think this will be our focus area.

Have you started the groundwork for restructuring

of DoT?

Yes. We are examining what

functions of the operator need to go to the new department. We have set up steering

groups. I am optimistic that we will be able to create the new department of telecom

services in about two months’ time.

Of late, the impetus for more radical reforms in

most sectors has been coming from the PMO, rather than the administrative ministries. As a

senior civil servant, how do you view this trend?

Without going too much into the

detailed discussion, let me tell you about telecom. You must remember that in October,

when GoT was set up, the Prime Minister was also the communications minister. Second, the

initiative to roll out the priorities in the economic agenda can come from the PMO. There

is nothing wrong in that. But at the same time, the administrative secretary in a

department and the minister concerned also take initiatives. Of course, the people in the

department who are experienced in the field also take the initiative.

Today, there is convergence of

technologies. It is no longer narrow domains. So all of us in different departments have

to work together so that there is convergence of interests, convergence of objectives. And

that is what we have been doing in the last four months with respect to formulating the

new policy.

How do you see the Indian telecom, five years

from now?

Indian telecom has a bright

future. I hope there will be a lot more telecom penetration and a world-class network

infrastructure. As you know, globally, the data traffic is growing. So one of the focused

attentions for DoT will be to build adequate infrastructure that will support the

requirement of all sectors. It will be our privilege to support the requirement of

tele-medicine and tele-education.

How will DoT be in five years from now?

In a very healthy shape.

Today, we debate on DoT’s point of view, the

regulators’ point of view, and the private industry’s point of view. But what of

the common man’s point of view, the consumers’ point of view?

Common man’s interest can be

for basic telephony. We have telephone advisory committee, parliamentary standing

committee on telecom. In almost all parts of the country, you will find STD PCOs today.

Communications has certainly improved. But quality of service definitely needs to be

improved. It will be our special endeavour in the implementing of the new telecom policy

to pay special emphasis on reliable media.

You have maintained a low profile all along at

DoT. At least that is the perception in the industry ...

It is not that I am shy of

meeting anybody. Certainly, not the industry. I, myself, have worked in the industry. But

as far as visibility is concerned, may be yes, by nature or by training, I am a

traditional civil servant. I believe that it is good enough to do your job well. But the

perception of maintaining a low profile is only a perception. It is not intended.

L Subramanyan and

Shyamanuja Das