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July 1-15, 1999 My CT Almanac Column |
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TELECOMMUNICATIONS Don't Turn Around Now The ban on IP telephony (Internet telephony) is an anti-customer act. If IP telephony is going to be one-tenth the price of circuit switched telephony, the ban means depriving the Indian consumers of the benefits of technology. T.H. Chowdary
DOT started packing the TRAI with the DOT people, young and old, who, unfortunately, are totally opposed to liberalisation, competition and any measure conducive to the welfare of the consumers. Putting such people in this crucial regulatory body, would be doing grave injustice to the involved private sector companies. It is as unjust as a referee for any game being from one of the two playing teams. The induction of Sri Jagmohan as Minister of Communications has been one of the greatest calamities that has befallen on the telecom sector. The Prime Minister and the government had realised that there is something seriously wrong with the licence fee regime in telecom. That is why they wanted a new telecom policy to remove the ills in the implementation of the NTP-94. Sri Jagmohan completely ignored this very serious issue, and embarked upon a one-point agenda, namely, insisting upon the P-telcos to pay the licence fees first and then only talk-exactly like telephone clerks telling subscribers to pay the bills first and complain later. Jagmohan' exit as Minister of Communications is therefore a great relief. The competition from P-telcos to DOT in basic services in a few states has begun to have a very salutary effect on the DOT's operations. Firstly, DOT pulled itself up to provide 3.8 million new connections in the year 1998-99. In the "Phone on Phone" scheme, i.e., DOT officials are themselves going to the residence of the person calling for a phone connection and installing a telephone within two to three days. That is a great response. The P-telcos have started giving discounts for heavy users. DOT could be losing its large users. Competition is compelling DOT to authorise its general managers in the states to respond with different service-price packages. The computerisation of some of the services and management information is being speeded up. DOT is now conscious of the loss of certain lucrative lines of business like mobile telephony and Internet service in response to competition, it is now wanting to become a full-service provider. One of the greatest outcome of the relook into the NTF-94 and the ISP policy is that the Indian Railways, the Power Grid Corporation, the State Electricity Boards and oil and gas companies are permitted to build communications infrastructure (mostly optical fibre-based) for resale or lease to any service providers. It is only with the existence of a number of competing infrastructures that the communication costs can come down and IT can be fully utilised in order to informatise society, electronify the government and extend all the benefits of inexpensive communication to all sections of the people. The ban on IP telephony (Internet telephony) is one of the most anti-customer, anti-national and senseless acts. Firstly, it cannot be enforced. Secondly, if IP telephony is going to be one-tenth the price of circuit switched telephony, the ban means depriving the Indian consumers of the benefits of technology. I am convinced that this Tughlakian order of the DOT will not be obeyed because it is unjust. Consumers and companies must frustrate the DOT in this regard. What the Prime Minister, while holding charge of telecoms should do is: Suspend collection of licence fees from the so-called defaulting P-telcos. Pronounce no judgement upon them now. Request the TRAI to suggest the one-time entry fee and revenue sharing formula quickly. Also tell them that the government does not view the liberalisation of Indian telecoms and the licensing of competitive private telephone companies as an instrument to raise revenue resources to the Government of India by sale of licences. It should tell TRAI that it is looking for easy and healthy entry of sound P-telcos into the sector and the only consideration for their entry is the promotion of consumer welfare. Withdraw all the DOT officers from TRAI. Remove licensing from the DOT as long as it is also an operator and is not corporatised. The TRAI should call a meeting and clearly convey to all the P-telcos that the government is intent upon treating them as a national resource and not as enemies even if they be competitors to the DOT. Finally, all nation-caring political parties must spell out their policy and programme in regard to communication and information technologies and include them in their election manifesto for the polls to the 13th Lok Sabha. The writer is ex-chairman of VSNL |
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The most significant event in the past
twelve months was the Prime Minister constituting the National Task Force on Information
Technology and Software (NTFIT&SW). Propelled by a number of visionaries and
liberalisers, the Task Force's recommendations (accepted by the government in record
time!) laid the basis for liberalisation of telecommunications because communications
infrastructure is the essential pre-requisite for information technology to be fully
exploited. And this means internally as well as for gains in the international markets.
The IT Task Force was also responsible for getting the Department of Telecommunications
(DOT) to agree to the most liberal policy for Internet service provision (ISP) by private
telecommunication companies (P-telcos). In contrast to the anti-customer implementation of
the National Telecom Policy 1994 (NTP-94), the ISP policy prepared the ground for a total
bypass of the DOT's infrastructure and service. ISPs can now pick up customers through
radio, bypassing the DOT's and others' customer access networks which are the costliest
and also the least dependable. The lSPs can set up inter-city long distance transport
network; and gateways for interconnecting with the international backbones of the global
Internet network. There is no licence fee inolved and there is no limit pegged on the
number of ISPs allowed. One does not need DOT, not only for ISP but also E-commerce,
telemedicine, distance-learning and schooling and such IT enabled services. The policy is
people-oriented and is designed to be least expensive. 
The Telecom Regulatory Authority of
India (TRAI) has, after a number of public consultations released an order for revised
rental and call charges for fixed and mobile telephony, radio-paging and leased telecom
circuits. The reduction in domestic long distance and international and leased circuit
charges had been long overdue. The increase in rentals both for wired and mobile services
is however unwarranted, at least for some more time. The TRAI wanted to orient prices
towards costs. But, the costs that it took into consideration are, however, totally
unrealistic and unjustified. The possible reduction of revenues because of reduced STD and
ISD tariffs could be offset by increased call volumes. The TRAI should have left the
rentals untouched till the effect of STD/ISD tariff reductions for an year are measured. 
