Computers Today, May 16-31, 1999 Chief Guest

May 16-31, 1999 CHIEF GUEST

"Nowhere has GSM grown as rapidly as in India"

Just being the senior vice president and general manager, India, ICO Global Communications, doesn't qualify Bishnu D. Pradhan, 55, to tackle the challenge of bringing the next generation satellite phone services to India's rural millions. Earlier, he headed the Centre for Development of Telematics, and was also an executive director with Motorola India. Talking to Sudhir Chowdhary, Pradhan portrays the state of the comms mart-in India and abroad.

Bishnu D. Pradhan Why is it a perennial stop and go syndrome with the Indian telecom sector?

When we are able to stop at any given point of time on a process and assess what we have done, and find that maybe we haven't done so many things that we initially thought of and are able to change tracks, that's progress. I had a lot of reservations when the telecom policy was initiated in 1994. However, I would also admit that anything that really happened in the country has been in the telecom arena. The manner in which the cellular industry has taken off here in spite of all the problems is truly amazing. In fact, in no other country has GSM grown as rapidly as in India. So despite all hurdles, we have moved forward. My only regret is that we didn't go forward far more even though the market potential and capabilities exist.

There is widespread apprehension that telecom policies have not been uniform and on the technology front too we have not made much progress. I realise that there can be a drag in the implementation of the technology. This happens because of lack of understanding and preparation when it comes to establishing policies and regulations. But today there are far more people in the Government and policy makers who have realised the short-falls in the earlier policy. So, it's a learning process and the Government as well as the private sector both have to take the blame for the present scenario.

Why did the Iridum service not find acceptance in India? Your reading?

India is not the only bad example, there are many other countries where Iridium's was a lacklustre launch. It's clear that they had a limited supply of user terminals initially from only one manufacturer. They had problems of reliability and also satellite problems. They're still debugging the system. In fact, the first commercial launch was delayed from September to November.

I would like to bring the focus to ICO Global. If there is one organisation that really understands and has the experience of global mobile satellite services, it's Inmarsat. It goes back to the late 1970s when they started providing maritime communications on a global scale. They went from generation to generation and I think the hand-held version is the fourth or fifth generation they are coming out with. So when they conceived and designed the architecture of the ICO system, they used all the inputs they had gathered over time. Having been in R&D for 30 years, I would say that any new system is going to have bugs. Iridium, being primarily software-driven, is going to have multiple bugs. It should have taken adequate measures to debug these systems before rushing with the commercial launch.

Has the Iridium launch prepared ground work for your service?

Yes. Certainly on the regulatory side, there have been some benefits. Iridium has been very active worldwide and they had to push for licences. I suspect that in some cases, that has resulted in a compromise that Iridium had to settle for licence terms and conditions that they themselves did not like. We are also faced with the same burdens arising from pushing a little bit too hard too fast. What worries us is that the provisional licence fee granted to Iridium is burdened with a significantly high of 16 percent of the total revenues. But we are optimistic that there will be further discussions with the Government and the fees will be lowered when commercial services are offered in the latter half of 2000.

Don't you think global satellite service is too costly for the Indian market?

Let's look at the cellular industry. I think this industry has suffered in India because of the perception that it is only for the elite and services are extremely expensive. This has frightened a lot of people. It should have been left to the people to realise for themselves how much value and mobility it gives to a businessman.

Regarding the exorbitant prices for these services, enormous amount of investments has gone into the deployment. The window of exploiting that investment is limited. Therefore, the need for generating the revenues to pay for the investment is very high. Clearly, as a monopoly today barring Inmarsat, Iridium's strategy would be to get as much as they can before competition hits them and they are forced to reduce prices. Worldwide, analysts have compared Iridium, Globalstar and ICO Global services and have said that ICO Global services are the least cost solution. Even otherwise, I feel that with all the players in by 2002, which also includes regional players, prices will fall and services will become affordable.

What is the ICO's marketing gameplan?

Remember the fable of the hare and the tortoise. The tortoise carried the day because, above all, it understood how long the race was and what it would take to win. Of course, ICO is no tortoise, and the world of global personal communications is infinitely more complex. A global communications service isn't just a matter of satellites and ground stations. Several layers of regulatory permission are needed from every national government in the world, and service and product distribution arrangements unprecedented in scope and complexity must be in place. At ICO Global, we are looking towards launching the service in 2000, while putting planned, systematic effort in winning the rights and developing the ability to offer service to end-users all over the world from day one.

ICO will deliver digital telephony, data, fax and messaging services to cellular users travelling outside terrestrial coverage, to other mobile people permanently outside cellular coverage, to specialised business segments like shipping, aviation, trucking and the media, and to fixed type communications in rural and remote areas. Our system will comprise 10 satellites in middle earth orbit. We have also signed up a joint venture deal with VSNL for distribution of ICO's services in India.

Do you have any India-specific focus?

VSNL is the largest investor in ICO Global after Inmarsat and has put in $150 million in the equity of ICO Global, amounting to seven percent of the global equity stake. VSNL is also providing the satellite access node from South Asia at Chattarpur near Delhi. The satellite node is a unique facility which also incorporates the in-orbit testing facility for the ICO satellite constellations.

In India, we have identified four market segments-cellular, basic mobile, speciality and semi-fixed-and will address them via our national and regional service partners. Handheld phones are aimed at existing cellular users and at people who need mobile communications, but who live outside terrestrial coverage. Other terminal types will be developed for data communications, for commercial vehicle, shipping and aviation applications, for automatic supervisory control and data acquisition. Almost 3,00,000 villages in have no telephones. Our semi-fixed terminals are an excellent means to meet rural demand without major infrastructure costs. Subscribers can pay only for local calls and the rest of the cost could be adjusted within the existing networks.

Issue Contents Write to us Subscriptions Syndication