Business: Satellite Phones; Out of the loop

India Today
October 5,1998

SATELLITE PHONES
Out of the Loop

The Government's inexplicable feet-dragging keeps India off the global Iridium telecom network.

By Shefali Rekhi

It is a leap as big as ONE from a cordless phone to the cellular. While the cell phone works within a terrestrial system -- it may not carry your calls if you are visiting your aunt in the country -- for Iridium's handheld global mobile communications system, the sky is the limit, literally. It enables its member to call home in say, Mumbai, from the cabin of a Concorde while flying across the Atlantic, or even further afield, from the polar ice-cap, if he'd like to be there. And all that, with one telephone number and a composite bill in a single currency.

All that would have been here and now if the Government hadn't bungled over critical clearances. On November 1 this year, when the world witnesses the inauguration of the Iridium network, India will remain blanked out of its reach. This, despite being an investor in the $5 billion (Rs 21,500 crore) project of Iridium Inc of the US, which brings worldwide voice communication and paging, into the palm through 66 low-orbiting satellites. India cannot connect because the Department of Telecommunications (dot) is still to issue a licence to Iridium India Telecom Limited (IITL), the Indian arm of the project where public-sector firms hold 80 per cent stake, Motorola Inc of the US owning the rest.

The licence denial puts out of the "satphone" range all countries in the neighbourhood entitled to use the special gateway for the project set up in Pune except Pakistan which has tied up with Saudi Arabia. The gateway, one of the project's 12 around the globe, was scheduled to be commercially available on September 23. But India has missed the deadline. In January this year IITL won the bid to route traffic in the South Pacific region through the Indian gateway and earn a million dollars (Rs 4.2 crore) every year plus billing income of up to $2-2.5 million (Rs 8.5-10.5 crore) over the next couple of years. These revenue possibilities are now on hold. IITL has only been issued a "provisional" permit on September 23, which is irrelevant in global telephony agreements.

The primary author of the fiasco is the dot which, after having accepted the project in 1993, failed to formulate a policy for Global Mobile Personal Communication System for five years. But a large share of the blame must go to the Defence Ministry which is stalling the project on grounds of security. As former dot secretary R.K. Takkar says: "Even cellular and paging services got delayed because of the Defence Ministry's objections." In the process, the fate of the total investment of Rs 500 crore is in doubt. Besides, by failing to meet the September 23 launch deadline, IITL will attract a punitive levy of $30 million (Rs 127.5 crore) from Iridium Inc. If it had honoured the commitment, it would have received 4,000 incentive warrants in the global company, whose current worth is $12 million (Rs 51 crore).

Telecom experts do not find the security argument convincing because it is possible to trace a criminal caller in the wireless system as easily as in a wired system. T.K. Chowdary, director, Centre for Management of Telecom Studies and former vsnl chairman, says that Iridium gave a positive reply to each of the Defence Ministry's seemingly anguished questions on whether the system would enable a terrorist to escape being located. The reply was a clear "no" because the Indian gateway would be there to track his movements.

In 1993, when India decided to partner Iridium, the concept was new. Now there are rivals, notably ICO Global Communications, part-owned by Microsoft, and, more significantly, the Afro-Asian Satellite Communications, promoted by Subhash Chandra of Zee Networks, a local player wielding considerable political influence. For all its preparedness, Iridium may have to overcome more stumbling blocks to succeed.

Issue Contents | Write to us | Subscriptions | Syndication