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| June 1998 TELECOM LINE | |
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SAY-SO "Finally, the Bubble of Privatisation has Burst" Shashi Ullal, 63, president and managing director, Hughes Escort Communications Ltd., expresses to Sudhir Chowdhary his concerns about the '"crisis"" faced by private telecom sector.
With cellular industry in the intensive care unit, pagers lying unattended in the out-door, and basic services stillborn, these are trying times for the telecom sector. What was once considered the showpiece of infra-structure reforms effort, is now in a state of crisis. The continuing legal battle between the independent watchdog, the Telecom Regulatory Authority of India (TARI'), and the policy maker-cum-operator, the Department of Telecommunications too, is further entangling the cross-connections between the regulator, the policy-makers, and the private operators. As a result, telecom investment is now on hold and even after three years since the Government first invited tenders for basic services in 21 circles, not a single circle is operational. The six expected basic telecom operators-Essar Telecom, Tata Teleservices, Hughes Ispat, Telelink India, Reliance Telecom, and Bharti Telenet-already troubled with hefty licence fee payments, now have an additional problem in not being allowed to lay cables in national highway lands. Almost all the cellular service providers are incurring losses. The case of other value-added service providers is also same. These are not usual troubles of a nascent industry. Also, you cannot put all the blame on DOT, since the private operators were aware of the grey areas while signing licences. They were merely interested in grabbing licences. They had also overestimated the market. The net result is that the entire telecom privatisation programme is sending out conflicting signals. It's sad to see telecom majors like Bell Canada and Bezeq pulling out of their ventures in India. What about the stand-off between TRAl and DOT? It is like two elephants engaged in a fierce battle for supremacy. Only ants, which are the private operators like us, get trampled in the fight. The powers of TRAl have been drastically curbed. It has been designated as an independent, statutory body, built doesn't have many of the powers that even their less-autonomous counterparts abroad have. The regulatory authority is responsible for setting tariffs, ensuring interconnection between different service operators, regulating revenue-sharing arrangements, protecting consumer interests, settling disputes, and facilitating competition. But the DOT-TRAI imbroglio is not allowing the watch dog to carry out its functions. Is the powerplay affecting the VSAT Industry too? Ever since the licences for operating shared hub VSAT services were granted in 1994, the private VSAT industry has been plagued with difficulties. The scarcity of transponder space in extended c-band has become acute. Some VSAT service operators would close shop unless emergency measures are taken. We are even prepared to utilise a foreign satellite by investing further in hardware and other related equipment. But that needs clearance from the DOT. There is a strong demand from the industry to enable small, paging and other value-added service operators to utilise VASTs for their own data transmission. But interconnectivity is not allowed, though DOT's Own VSAT network, HVNAT, is interconnected to all other DOT and VSNL networks, including the PSTN and Internet gateway. Still, they talk about a level-playing field. How has HECL fared in such a murky state of affairs? Don't expect me to reveal my marketing strategy, as it's a small and fiercely competitive industry with just nine service operators. But being a service operator as well as an equipment supplier has boosted our business. Of the total 6,300 VSAT nodes installed all over the country, HECL owns 2,200. It is also generally told that only multinational companies setting up shop in India are availing VSAT networks. On the contrary, 70 percent of our clients are Indian corporates. Multinationals based in America and Europe are hardly aware of VSATs, the terrestrial networks being so reliable there. Last month, we received a huge order from the banking sector. Under their internetworking project, the Reserve Bank of India (RBI) and 27 nationalised banks have placed an initial order for 450 VSATs with us. Of these, 33 will be for the internal use of the RBI; the rest have been ordered by individual banks for their respective segments of the network. The VSATs will be installed to operate in either the TDM/TDMA or hybrid mode, and will be operational by next year. |
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What exactly has gone
wrong with India's telecom privatisation process? 
