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National Development Apart from blunders in the licensing process, telecom growth in the country was hampered by the authoritarian attitude of the DOT with regard to choice of technology. While private companies had almost no choice in what technologies they might adopt, the DOT family had complete freedom in technology selection. It was only in 1999 that these e-mail service providers were grudgingly allowed to migrate to TCP-IP. The same guidelines imposed a starting licence fee of Rs. 25 to 50 lakhs per annum on e-mail service providers. Bulletin Board Service (BBS) operators, typically run by students who allowed users to dial into their computers and leave messages for each other, were asked to pay an amazing Rs. 15 lakhs per year for permission to run a free service! VSNL paid no licence fees for a service that offered far more than just e-mail. Similarly, cellular operators were forced to use GSM technology, although cheaper alternatives might have been far more popular in a poor country. When MTNL started to offer mobile telephony, it was not bound by this restriction, and chose Code Division Multiple Access (CDMA) technology. A wireless local loop system called corDECT, which reduced the cost of connecting a new subscriber to the telephone network from Rs. 35,000 in urban areas and Rs. 75,000 in rural areas to a figure close to Rs. 10,000 could not be used. While only one per cent of the population could afford conventional technology without cross subsidies, the cheaper corDect technology could have been within reach of 15-20 per cent of the countrys population. Yet, DOT dragged its feet in providing wireless and other clearances. Another grievous technology choice made by the government was the ban on Internet telephony, another means of low-cost telecom access. VSNL even blocked access to Internet sites offering information on the technology. Internet telephony and corDECT technology were both eminently suited to a new paradigm for telecommunications. Instead, similar to the Internet model, a large number of small to Figure 1: Cables became a problematic issue. medium players could connect to national and international optic-fibre backbones, but the DOT recipe for privatisation only allowed large players, since each needed to be in a position to cater to a circle, typically an entire state. Besides the high licence fees, private operators faced other problems. It took them many months to get spectrum clearance to use wireless. Spectrum allocation was (and still is) a terrible mess in the country; the available spectrum had been parcelled out to several government departments and ministries, each of which managed the spectrum in its own domain. “Internet telephony and corDECT technology were both eminently suited to a new paradigm for telecommunications.” Anyone wanting clearance to use wireless also needed clearance from dozens of government departments. This forced each department to manage the spectrum in their bands, which they were not equipped to handle. In other countries, information pertaining to all broadcasting antennae is fed into a single computer program. Anyone wishing to use wireless provides information pertaining to the antenna, direction, height, power, frequency, etc., which is also fed into the computer program, which then clearly indicates whether or not this new antenna would interfere with existing equipment. While departments made wasteful use of spectrum, by far the worst culprits were the defence services. All over the world, defence services do occupy large segments of spectrum. To bring this in check, the NATO countries have uniformly adopted the so-called NATO Band. that allows equipment from different countries to inter-operate. India purchases equipment both, from NATO and non- NATO countries, and therefore uses far more spectrum than other countries. Other government departments are also blocking more spectrum than needed because of past indiscriminate purchases of non-standard equipment. This approach cost the government the substantial revenues it could be earning from spectrum fees. If wireless was hard to use, laying cables was no simple task for the private operator either: "The National Highways Authority of India (NHAI) demanded it be paid Rs. 75,000 per km if the cables were being laid along the nation highways the DOT pays only reinstatement chargesa fraction of this in each case, the operators had two choices — petition the government and wait out the delays, or just bribe the authorities." It was hoped that the formation of the Telecom Regulatory Authority of India (TRAI) in 1997 would increase the confidence level of the private operators. TRAI was established to regulate, oversee and promote competition and growth in telecom. The substantial investment needed for growth, about 50 billion dollars in the next five years, is beyond the governments or DOTs fiscal capacity and has to come mostly from private and foreign sources. These investors need to be assured of a level playing field and a pro-competitive regime. Hence, the need for a credible and strong independent regulator, to enable new entrants to compete against a giant government owned incumbent that owns the existing network. The Telecom Regulatory Authority was established, as well, to prevent anti-competitive behaviour such as cross-subsidies, establish terms for non-discriminatory interconnection, administer universal service obligations, and transparently administer licensing, radio frequency allocations, 18
P o l i s h Y o u r C o n n e c t i o n s Broadband and Content: From Wires to Wireless 16 –19 January 2005 Hilton Hawaiian Village Beach Resort & Spa Honolulu, Hawaii USA Program Themes • The Value of Content • Transformational Applications • New Approaches to Development Issues • New Technologies • Mobile Applications and Users • Access • Security and Privacy • Predicting Demand • Global Networks • Regulatory Issues • Whither Plain Old Telephone Service (POTS) •Enabling Change PTC’05 Conference PTC’05 will be a milestone conference addressing key shifts in telecommunications as the issue of broadband availability gives way to content, access and use. The PTC’05 conference will focus on the value of content in broadband networks, the market forces that drive demand for content, the players positioning for new revenue opportunities — and the rising importance of content delivery over mobile networks. Call for Participation Anyone interested in the critical issues facing the future of telecommunications should actively participate in PTC’05! Seize this golden opportunity and maximize your total participation in PTC’05: • Register Early & Save • Sponsor, Exhibit & Advertise • Full Time Student Volunteer Opportunities PTC members enjoy a 40% discount on the conference fee. If you are not a PTC member and are interested in joining, please email Justin Riel at justin@ptc.org. For more information, visit: www.ptc05.org For detailed information on PTC’05, visit www.ptc05.org Pacific Telecommunications Council 2454 South Beretania St., 3rd Floor, Honolulu, HI 96826 www.ptc.org Tel: +1.808.941.3789 Fax: +1.808.944.4874 E-mail: ptc05@ptc.org
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