Fiduciary Vs Rentier Interests

The group of ministers which is trying to resolve India's telecom tangle needs to take a 30,000-feet view of policy, rather than dance to petty corporate tunes

On Thursday, September 25, the government's six-member group of ministers (GoM) on telecoms decided that it had in principle decided in favour of the unified licence being proposed in the current form "� that is, covering just cellular and basic telecom services.

It also decided to spike the proposed Convergence Bill because it is "premature" and there are fears that the proposed Communications Commission of India could become too powerful.

To observers of telecom policy making in India, this smacks of one trait common to successive governments since 1992: bias "� intended or otherwise "� in favour of powerful corporate interests.

So, in the early 1990s, we had mantriji Sukh Ram taking decisions that one way or another helped a company "� Himachal Futuristic Communications Ltd or HFCL "� from his state.

The United Front and Bharatiya Janata Party-led governments laid the ground and oversaw the switch from a fixed fee to the revenue-sharing model of licensing, so helping the cellular industry come back from the brink of bankruptcy. (Although this decision had some flaws, I believe it largely helped Indian consumers.)

The same BJP coalition's Pramod Mahajan allowed newcomers entry into mobile phone services through a cunningly tweaked network architecture called wireless in local loop.

The beneficiaries are all over the billboards these days: Reliance Infocomm and Tata Teleservices.

In so much that the technology used was relatively new "� CDMA-based cellphones have really grown in the last five-six years only "� this decision would have been above board (especially given that the entrants have some four million subscribers to their service already), but for the opaque manner and hurry in which it was carried through.

And, today, we have a GoM which once again seems to be bending backwards.

What is amazing is that this GoM is packed with credible names: it is headed by finance minister Jaswant Singh, seen as a sincere and patriotic leader with some depth, and has as its prime mover the very visible information technology, telecoms and disinvestments minister Arun Shourie, a reformer in any sense of the term.

That such an eminent group "� including foreign minister Yashwant Sinha; Arun Jaitley, who holds the law, commerce and industry portfolios; information and broadcasting minister Ravi Shankar Prasad; and defence's George Fernandes "� has been influenced by mere corporate interests is difficult to imagine, but its decision seems to indicate just that.

The forces that be in New Delhi "� ministers, policy mandarins and regulators "� need to understand the fundamentals of the telecoms and convergence (driven by information technology, communications and broadcasting technologies) industries: change is a given variable.

We are a good decade or more into the current generation of mobile phone telecom technologies and it is only a matter of time before it gets morphed dramatically or/and gets replaced by new, emerging architectures that present a giant leap forward in terms of value for consumers.

Basic telecom and carriage (long distance) networks are already feeling the heat from voice over Internet protocol (VoIP) technologies that deliver the same functionalities at a fraction of old costs.

Including just cellular and basic telecom services in a unified telecom licence is being incredibly daft.

As I've repeated time and again since the beginning of this year in these columns, there are new technologies on the horizon that present a very substitutable service when compared to mobile phone "� or WLL "� services.

If you are new to TechTalk, let me quickly recap: wireless VoIP (also called mobile VoIP or voice over wireless LANs or voice over WiFi) options are beyond their beta testing stages and making a mark in matured data markets like the US.

Companies such Telesym and VLI have software ready to impart voice functionality to WiFi "� a high speed wireless data offering "� enabled devices and others like Symbol and SpectraLink have independent hardware that complete mobile 'phone' calls.

The costs of such services are really low, especially when implemented in a corporate environment, and offer other soft benefits like productivity gains.

So here's my earnest appeal to the GoM members and their advisers. Please remember your fiduciary responsibilities and do a Google search for wireless VoIP technologies, the companies working on this and plan a medium-term telecom policy.

No one can predict what will happen in the next 10 years in telecoms, but it is rather daft to ignore a technology that is reality (wireless VoIP revenues are forecast at $500 million in three-four years) and focus just on today's mobile phone and basic telecom services to resolve a petty fight among even pettier companies that will surely try to block out new entrants in future too.

Josey Puliyenthuruthel works at content company perZuade. His views are personal and may not be endorsed by his employer, the company's investors, customers or vendors. Comments may be sent to josey@perzuade.com