Last fiscal saw the beginning of
the end of the indispensability of the Government in the sphere of communications in the
country. Consider this. Time was when there was too much dependence on the political
framework of the Central and State Governments. Time was when one lived in the perennial
fear of one’s equipment business going into doldrums because of a single small
decision taken in the conference rooms of the Sanchar Bhavan. Time was when it took the
better part of a decade for a telephone connection to be installed at one’s home.
Now consider this. The Central
Government has changed four times in the last three years, with a fifth time pending
currently. And this has not in the least affected the telecom scenario in the country. The
wheels of liberalization did not falter and the basic telephony and Internet services got
deregulated. The infrastructure equipment vendors who, till now, were restricted to only
three customers—DoT, MTNL, and VSNL—got the taste of a broad-based market-place
with the opportunity to sell to more than those three outfits. The consumers are
experiencing the availability of more alternatives to buy their telephone connections
from. So on and so forth.
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This change is bringing about a
big shift in the dynamics of India’s communications business. For one, the formation
of Group on Telecom (GoT) is shifting a lot of the policy making burden away from the DoT.
The latter is purported to be corporatized in the coming years. Second, the DoT, MTNL, and
VSNL are just one of the outfits in the service industry, as opposed to being the only
ones. Third is the introduction of competition in the telecom industry, with the
government outfits being forced to become more customer-service oriented, and thus
behaving in a more corporate manner.
In the enterprise segment, there
was this big boom in networking witnessed last fiscal. Despite cries of recession,
corporates stepped on the accelerator, as far as connectivity was concerned. If in the
previous years, computing took precedence over networking, it was the reverse case last
fiscal. This was mainly due to the attitudinal change of management toward IT. Fueled by
applications such as ERP, intranet, extranet, networking attained the status of being
corporate infrastructure, equal to computing in importance, if not more.
These factors have fueled the
dormant hope in the communications industry. Hope that got stymied in the aftermath of the
Sukhram episode; hope that got crushed with the cellular operators’ imbroglio with
the DoT; hope that got frustrated with the Government’s emphasized focus on software
exports leaving the communications industry orphaned. This hope got revived last fiscal.
Although last year would not reflect many of the things mentioned here in actual monetary
terms, it built the foundation for future revenues.
Thus, last year paved the road to
the redundancy of the Government in all the spheres of communications. The era of the
Government being the "Be all and the end all" is getting over. That the
indispensability that the Government enjoyed is over can be seen in the way the DoT and
the PSU telecom companies reacted during the end of last year and the beginning of the
current year. For one, the DoT announced that it would add a whopping 18.5 million lines
by 2002, which effectively means that the Department would be nearly doubling its existing
base (19.45 million direct exchange lines as on 30 November, 1998). MTNL announced its
intention to enter into cellular services and has already entered into Internet services.
VSNL spun off its Internet services business as a separate subsidiary. These were clearly
reactionary measures dictated by the emerging competition in the industry.
All these contributed to the
revival of hope in the economy regarding the future of communications. And the dream: A
smart communications industry driven more by entrepreneurial ability rather than
bureaucracy.