Articles
The Telecom Regime Must Change
Dt: 7/10/21
The Telecom Regime Must Change
-Dr T H Chowdary*
The news ( Ind Exp 6-10-21) that government’s Department of Telecoms (DOT) is considering withdrawing legal cases related to the controversial one time spectrum charge (OTSC) involving disputes of about Rs. 40,000 crores is indicative of sanity and wisdom and fairness in forming DOT as befits a just and caring government. Since and during the progressive end of its monopoly from 1992 over different telecom services in the country defined by the historic National Telecom Policies (NTP) of 1994 and 1999. The DOT took a hostile attitude to the entry of private telephone companies (P- Telcos) and severe competition from them to its own corporatized ((as MTNL and BSNL) services. A licensor competing operator and regulator even initially the DOT put numerous disabling even crippling and extortionist conditions in the licenses for the P-Telcos. That class of telecom engineers, who smarted under the loss of their monopoly have retired during 28 year period since 1992. That is why not vengeance but wisdom seems to trigger the corrective and ameliorative /corrective measures like revisiting the obnoxious levies like spectrum charge. This is not the first time for license conditions s to be reconsidered.
2. In 1998 –‘ 99 Atal Bihari Vajpayee government taking note of the imminent collapse of the nascent P-Telcos, boldly and wisely migrated them from upfront heavy license fee payment condition to revenue sharing . That honest government ignored the swam- song of communists and their dupes and fellow- travelers’ criticism that the government was bailing capitalists for a consideration. The migration (changing the license conditions during the operative period ) resulted in the realization of the vision I propagated since late 1960s.
· Postalisation of telecom tariffs i.e, distance - independence of rules.
· Telephone call cheaper than the postal card.
· Haath haath mein telephone; gaon gaon mein Internet
· Communicate for work : Commute for pleasure (realized during the COVID-19 pandemic
3. Some of the obnoxious conditions that the deprived DOT imposed on its rival P-Telcos are listed at the end of this article. The ones that cry for removal are:
· Government auctioning
· Government usage charges
· AGR even from services not requiring license.
4. The fierce capitalism brought new technologies, new services, affordability of telephone service even to beggars ( in 1994, we had one phone per 100 people; annual cost of telephone was equal to annual per capita income ; now these are 90% and 1/18th l (0.059) respectively. But this competition has led to inevitable ill consequences too:
· 9 P-Telcos folded up leaving there only and
· State owned MTNL and BSNL are incurable loss- makers kept on government’s money ventilator.
· Of the three… “live” P-Telcos Vodafone -Idea is in so much debt and losing customers at such a rate that it’s survival is doubtful.
· Bharti- Airtel is valiantly trying to be alive; near future will tell whether it can survive and thrive
· R-Jio has immense resources -financial, businesses and intellectual.
5. We may see a near private monopoly which is undesirable.
Prudence suggests that there must be a radical regime change in telecom/information Services. Poet Laureate Tennyson r wrote,
“The old order changeth yielding place to new
Lest one good custom should corrupt the entire world
6. The telecom resign should change.
· Government auctioning spectrum: The spectrum is not created by the government nor by god. It created by the private telephone companies. It can be any band in this spectrum can be used again and again in a cell that is an area after area by spacing these two areas sufficiently apart . This is done by a computer program. That is spectrum is limited quantity is not because unlike coal or oil , it can be used again and again is created and controlled by the private telephone company. Government auctioning a resource which it does not created and own is not ethical. It may require money should government make money by any means ? So that the same spectrum is not used in the same space by more then one company calls for regulation. The cost of regulating can be recovered from the licensed companies.
· Spectrum usage charge: Government is selling the spectrum the P-Telco is paying for it. But it uses it government is saying a Telco must pay usage charges. This is just lie a seller of a building getting the money from the buyer requiring that you should pay if uses the building .
· AGR from services not requiring licence. The P-Telcos can sell telephones and create and sell applications. They may even do insurance but DOT said that elicencee P-Telco has signed that it gives a share of the revenue, the revenue from non-licence requiring services is also insisted to be shared by the DOT. This is unjust.
7. The desirable long term solution is to restructure the industry. The infrastructure comprising of cell towers, terrestrial microwave radio links and underground optical fiber cables should be deemed to be competing infrastructures on which different companies can provide various services. This is like the state -owned national highways and airports using which different companies competitively provide different kinds of services. Rail tracks and signaling equipments are beginning to be used by private passenger train service providing companies.
8. The emerging giant R-Jio with an inexhaustible financial resource from RIL may be separated into two companies, one for the infrastructure and other for services. This restructuring requires extensive consultation and deep thinking so that a proper solution for the long term health of the telephone companies and for affordable service for the poorest of the poor continue to be available as at present. That the current situation is inexorably leading to higher prices and near -monopoly is undesirable and harmful to the nation. Just as the NTP-1999 saved the companies and services, so should there be a new fundamental re-organisation and restructuring of the telecom companies and services. (976 words)
END