What's holding back telecom growth? - Rekha Jain

Mobile services in India, much as in the rest of the world, have driven economic growth, made business more efficient and effective, led to emergence of large enterprises that generate tax revenues for the government, employment, and wealth for their shareholders.

However, India was a late starter in licensing out mobile services. While licences had been awarded in 1994, it was not until 1999 that several policy and regulatory issues were sorted out and mobile services took off. During this time, China had reached a teledensity several times higher than ours. Despite the claim of Indian policymakers regarding the “success” in the sector, it is a story that needs to be compared with other countries. A large number of Asian countries in the region have teledensities above 70%, compared to our nearly 30%, and have licensed out 3G, through auctions several years ago.

Everyone recognises that future of telecom is wireless. And competitiveness of countries, especially the service sector will be determined by developments in their telecom sector. Countries such as the US, UK and Malaysia, among others, explicitly recognise this and are publicly funding R&D in wireless technologies, deployment of broadband and roll out in rural areas. In India, while there is an overt recognition of this fact at the policy level, there is little effort in planning how we as a nation wish to achieve growth in the sector. While it can be argued that India needs to focus on physical infrastructure of roads, ports, power, etc, rather than on telecom, it is imperative that the focus is simultaneous, because without the latter, the benefits of the former can not be leveraged to the fullest extent.

The most critical resource for wireless services is spectrum. India needs to address the lack of strategic planning for spectrum urgently. That there is no national initiative to review the strategic aspects is a matter of great concern. What is worse is that even the operational aspects of managing spectrum are poorly handled. For example, for a variety of reasons, the government has not been able to auction 3G spectrum to date, despite nearly two years since the first announcement regarding its intention to make such spectrum available. 3G allocations had already occurred in both developed and developing countries (e.g., Philippines, Sri Lanka), so it was something that could have been undertaken easily by the government as so many precedents existed. At the strategic level, there is a need to develop a national spectrum policy that comprehensively examines and identifies the following:

Institutional mechanisms for managing spectrum:

For example, while spectrum management is a technical issue, it has long-term economic and commercial value. Therefore, it is not necessary that DoT is the only body that should be involved in strategising for future use. This requires considering a review of the organisational structure of wireless planning and coordination wing of DoT. For developing a strategic blueprint, besides DoT, we need to have institutional mechanisms to involve industry, broadcasting sector professionals, public safety agencies that use spectrum, maritime and aviation bodies, commerce ministry, defence agencies, technology institutes, public policy experts etc. Once there is a blueprint, DoT could manage the operational aspects of allocation and monitoring.

Approach to manage spectrum:

While it is true that rapid technological developments in this field make it very difficult to predict long-term uses and make appropriate allocations, it also points to the need for adoption of a flexible management approach. The new approaches to managing spectrum adopted by several leading countries indicate moving away from a “command and control” method to permit more market-based, flexible uses in terms of services that may be offered, sharing of spectrum, trading etc.

Review and audit of exiting spectrum usage:

Several developing and developed countries have moved from analog services that are extremely inefficient with regard to spectrum usage to digital usage (for example in broadcasting). This has made large amounts of spectrum available (“digital dividend”) that may be used to provide a host of wireless services. This band has extremely good propagation characteristics and is commercially valuable as the experience in the US has shown. In India, we have a golden opportunity to adopt this approach, as our TV penetration is only 55%. The new TV sets can be mandated to be digital, so that new users benefit from the digital switchover. The digital TV sets in the replacement market will ensure that complete switchover can be managed over time. Thus, proper planning for the switchover needs to be done as was also shown in the US case.

There is a need to have a dialogue and debate at the national level regarding the issues identified above, that should involve senior decision-makers at the highest level. We are already running behind in a rapidly changing world, and if we do not take action now, we would have denied our citizens and industry early growth paths and a competitive edge.

(The author is executive chair, IIMA Idea Telecom Centre of Excellence, IIM, Ahmedabad)


http://economictimes.indiatimes.com/articleshow/5108002.cms