Memoranda for Submission to the Chief Ministers of the Two Telugu States.


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)