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November 10th, 2011, Vol:1

Editor's Words

By Sridhar Pai, ceo, Tonse Telecom

November 10, 2011

Flight of Bandwidth

At the Next Generation Wireless Summit organized by Qualcomm on Friday, Nov 04th one question that kept coming back to every speaker was – well,. What about this generation Wireless? The event had all usual trappings of a Qualcomm – CNBC TV 18 event etched into it but coming at a time when the entire telecom industry is mired in quicksand was quite striking. Having the current Telecom Minister Mr Sibal himself as chief guest did little to bring any clarity out of a rather confused political – industry situation where simply nothing seems to move forward.

Mr. Akhil Gupta, Deputy Group ceo and MD Bharti Enterprises (and Director Bharti Airtel) brought out clearly how the private sector contributed profoundly to create the first telecom revolution over the last 15 years and continues to be inspired to contribute to the second upcoming revolution – this time on data front – but there are certain things the government needs to do to allow that to happen. Firstly he was referring to allowing ICR – Intracircle Roaming to happen – and perhaps was seeking clarity on why Airtel –Vodafone –Idea 3G roaming deal be scuttled? He also referred to the wonderful policy document called NTP but wondered if all fibre story was fair and that somehow government should remove this 'inconsistency'... Mr Gupta closed his speech by mentioning that all societal good could only be done by businesses that are successful and unless they are profitable they could not be expected to contribute.


The Honourable minister then took stage and picked up exactly where the Bharti speaker left off....disagreeing flatly that if there was one reason for the current economic crisis in the globe it was simply because of overly profiteering motive of businesses. The Ministers speech brought out the following key points which perhaps represent the government's view of the industry:

  • Real broadband impact will happen in India only when the tiniest village (or Gram Panchayat) goes live over fiber to the Net
  • Any hope for digital economy can only be real when digital empowerment (read – land records, tax papers, statutory filings, birth death records, local agro produce pricing, rural education) becomes widespread
  • National fiber backbone is a crucial element of this digital vision and the only way the digital divide can be curbed
  • That fancy tablets at Rs 25k used for downloading Bollywood music is not the government's view of digital India but universal access to data from the remotest corner of India using devices such as Akash ($35 tablet) costing a user not over Rs 100 per month (USD 2)is closer to its vision.
  • Unless fibre criss-crosses the national backbone, spectrum will always remain scarce, expensive and coveted.

We are not expecting the industry and government to agree on everything but clearly the government has to take responsibility of the current level of dormancy in telecom sector. Just because a scam was uncovered where is the need to strap down all activity to zero for a good 18 months? A general sense of paralysis and overbearing suspicion on everything has pushed the sector to pause and put all activity on hold....

Coming at a time when billions of dollars in spectrum fee had already been paid most operators now have no choice but to belt-tighten all activity to ensure that they can stay live till things return to normalcy and services introduction can begin again. Perhaps the government would do better if they could isolate the erring functions or departments of those telcos and allow rest of activities to proceed. Protracted delay in releasing the Draft policy, unclear M&A norms, unclear spectrum sharing rules have not helped the industry either.

Not to mention the operators got it all right so far...not a single operator is clear about how to position 3G services and six months after launch they have not a single compelling service proposition to offer. Perhaps they should go back and ask their Investment banking advisors how the math could have gone wrong. And to top it all their BWA investments now are questionable too. No wonder some of the BWA licensees are asking if they can return their spectrum.

Something has gone terribly wrong with the second telecom revolution. While the government wants carpenter Raju to use a tablet in distant Mizoram so that his teenage son can learn about IIT courseware not paying over $2 a month, operators are worrying about mounting bank interest to be paid – in some cases several million dollars a quarter – for the funds raised to pay for spectrum. Meanwhile the vendors are waiting for a miracle in the wings. Only time will tell when this ugly telecom winter will thaw.

Sridhar Pai runs Tonse Telecom, a Bengaluru-based telecom research and consulting house that is a research partner to Light Reading India.


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About Tonse Telecom

Tonse Telecom is a research, consulting and advisory services organization focusing on the India telecom sector. Tonse Telecom enables telecom equipment vendors, ISVs, infrastructure developers and investors for success in the Indian telecom marketplace.

Tonse Telecom has onboard, a team of reputed senior industry executives and consultants who provide advisory services on specific projects. Tonse covers a broad spectrum of telecom technologies that include Wi-Fi /BWA / WiMAX, IMS, FMC and Triple Play, VoIP, Mobile VAS, End-device Applications and Mobile Content.

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