Performance of Telecommunications Ministry written about

12 Feb

This ministry is not in service

Anandita Singh Mankotia Posted online: Friday , Feb 12, 2010 at 0128 hrs

From the outside it might look like the country’s telecom sector is bustling with activity. Seven to eight big operators, 17-19 million net subscribers added each month, the sector’s resilience to the financial meltdown last year — though the tariff wars certainly took some of the sheen off — and of course the irrepressible Communications Minister A. Raja, a man always in the news for all the wrong reasons. However, if one looks at the sector from up close a painful reality dawns on you: for the last two to three years the big idea, the vision for the sector, is missing. There are only talks by the minister or his team on spectrum (both 2G and 3G), big tenders for BSNL and on how tariffs are set to come down further. There’s complete silence on important technological issues, on which big idea the government is working towards next, on issues relating to broadband growth or Internet telephony. Nobody seems to be even thinking about which areas could be important in the days to come.

There’s another disturbing trend noticeable: while the private players are doing well in the sector, the performance of government-owned operators is sliding. MTNL is barely able to keep its head above the red mark (allegedly with some accounting jugglery), BSNL — once a major challenger to the likes of Bharti Airtel and Vodafone-Essar — is fast racing towards being a BIFR case, and manufacturing units are no better.

In the last three years it appears that the department of telecommunications (DoT) has only worked or is working on spectrum-related issues or licensing matters. True, they are important — but so are issues like mobile number portability, internet telephony, and mobile virtual network operators (MVNOs). Do they ring a bell? Yes, we all have heard or read about these; recommendations on them have been submitted to the government by the sector regulator, the Telecom Regulatory Authority of India (TRAI). The DoT has even come out with some policy statements from time to time on them but has stopped short of a final word. However, in recent times everything has come to a standstill.

The idea of a uniform licence fee for mobile operators, long-distance service providers and internet service providers (ISPs) has also been awaiting the minister’s attention. Prime Minister Manmohan Singh declared at the India Telecom Summit, two years ago, that MVNOs — who provide mobile service, but without using their own infrastructure or frequency — would soon be allowed to operate in the country. Since then the UPA has returned to power, the telecom minister retained his post, but not a single file seems to have moved on this. As a result, operators keen on this model opted for a franchise route.

Portability, which enables mobile users to change their service provider while retaining the same number, is desperately needed, as it would improve services — and in a true sense make the consumer’s needs the true focus of the market. Sadly, deadlines have been missed and there doesn’t seem to be much urgency to have it implemented in a time-bound manner. Either the operators aren’t ready or, this time around, there are some bizarre security issues. Ideally, the telecom minister should be losing sleep for not being able to fulfil a simple need of the consumers to whom he is responsible; but the harsh reality is that it is far too low on his priority list.

A uniform licence fee is important from the industry’s perspective: it will clean up the sector, end the current system which divides licence fees into different “slabs” paid by different sets of operators — leaving too much room for arbitrage. At a time when the Budget is round the corner, one does not find any activity on this front either.

MVNOs would allow the not-so-competitive telecom operators to sell bulk airtime to others who would then sell it to the end-consumer — thus ensuring that those operators who aren’t very efficient users of spectrum may use the services of another company which can market better, or improve the service provider’s business model. Despite the PM’s assurance no one has a clue as to whether this would ever see the light of the day.

Internet telephony was supposed to give a big push to the penetration of broadband services in the rural parts of the country. But urban consumers too, would benefit from making cheap calls through the internet, which would allow calls originating through a computer to terminate on landlines and mobiles. The ostensible reasons for delay are court filings alleging the lack of a level playing field between the mobile operators and Internet service providers. But is it so difficult to resolve that a year has passed and nothing has been done?

The telecom minister should know that there are issues which may not be glamorous but still need to be implemented for the well-being of the sector and in the interest of the consumer. And even if one accepts that spectrum-related issues are very important and have kept Raja’s entire team busy, then at the very least 3G spectrum auctions should have taken place on time! Of course, here as well the result is a big zero. The same is the case with the allocation of 2G spectrum, which has come to a standstill because of a lack of policy. Currently TRAI is working on a set of recommendations on the issue — but any prizes for guessing how much time the DoT would take in finally formulating a policy after having received the recommendations?

The writer is special correspondent, ‘The Financial Express’

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