Centre for Internet and Society

India’s telecom success story turns sour

praskrishna — 2012-06-04T05:14:28Z

Over the past decade, the number of cellphones in India shot up from 6.5 million to 900 million, a prime example of how an industry could exploit the vast consumer market here to achieve breathtaking rates of growth and, in the process, help transform the country.

The article by Simon Denyer was published in the Washington Post on June 1, 2012. Shyam Ponappa is quoted in the article.

But that success story is starting to turn sour as a combination of greed, corruption and incompetence threatens to arrest that growth. Instead of being an advertisement for India’s economic potential, the telecom story has become an example for foreign investors of the perils of doing business here.

It also serves as a parable for the nation as a whole, of how India’s dysfunctional systems of governance threaten to undermine the private-sector success story of the past decade.

"There is a danger of snatching defeat from the jaws of victory," said Mohammad Chowdhury, an executive director and telecommunication specialist at consultants PwC India.

The first signs of trouble emerged in late 2008, when the boom was still at its height. In what became known as the "2G scam," an Indian journalist uncovered corruption and favoritism in the way that spectrum bandwidth — the radio frequency bands that companies use to transmit data — was being allotted to individual companies.

Accused of defrauding the Indian exchequer of billions of dollars and of accepting bribes worth hundreds of millions in return for spectrum allocation, the communications minister, A. Raja, and two senior bureaucrats were arrested in February 2011. More than a dozen business leaders also were jailed or charged.

But the slow response to the scandal has threatened the sector’s continued growth.

Last year, the Supreme Court canceled all 122 licenses that Raja had granted in 2008, even in cases in which there was no suggestion of corruption. Companies that had invested huge sums of money in India, many of them not even implicated in the scandal, suddenly found their investments under threat.

Norway’s Telenor, which is party owned by the state, stood to lose about $3 billion, probably the biggest foreign investment loss by a Norwegian company, Trade Minister Trond Giske said last month. "If it is forced to move out of the country, it would have further political implications," he warned.

Up for auction

But the biggest blow to companies came when the Supreme Court, in an attempt to foster transparency and fairness, ordered that all spectrum be put up for auction to the highest bidder.

The auction system had failed in many countries, including the United States and Britain, with companies often overreaching to bid for spectrum and ending up bankrupt.

Instead, India had decided — wisely, in the view of many experts — to sell the spectrum cheaply in return for a share in eventual revenue. That gave companies the financial headroom to invest in towers across the country and helped make calls affordable for hundreds of millions of poor people.

"There are very strong economic reasons for not auctioning spectrum in developing countries," said Shyam Ponappa of the Centre for Internet and Society.

To add insult to injury, the Telecom Regulatory Authority of India recently recommended that the spectrum from the canceled licenses be auctioned for a minimum price many times as high as in comparable auctions all over the world.

It also recommended that spectrum now held by other companies be re-auctioned when existing licenses come up for renewal between 2014 and 2025, estimating that that could earn the cash-strapped government $50 billion in extra revenue.

A cabinet committee will meet this month to consider the regulator’s recommendations. But the industry is up in arms.

The Cellular Operators Association of India called the regulator’s recommendations "arbitrary, regressive and inconsistent" and said they would prevent the industry from delivering "on the government’s vision of affordable communications, rural penetration and rollout of data services."

Telecom entrepreneur Sunil Mittal called the recommendations "catastrophic." Mittal is the chairman and chief executive of Bharti Enterprises, which owns Airtel, one of India’s largest cellphone-service providers.

PwC India estimates that the recommendations will push up average consumer tariffs by about a third, meaning price-sensitive consumers will use their phones less. The biggest losers will be the rural poor, he said.

Indeed, investment in new telecom towers has stalled, and any attempt to squeeze more money from the industry will probably delay what could have been the next chapter in India’s telecom revolution — the rollout of mobile broadband services across a country where 85 percent of the population lacks Internet access.

"It is a huge opportunity missed," said A.S. Panneerselvan of Panos South Asia.

Vodaphone tax case

As the ripples of the 2G scam widened, a separate tax dispute with British telecom giant Vodafone also has cast a shadow over India’s image as an investment destination.

In 2007, Vodafone bought a two-thirds stake in the Indian arm of Hong Kong’s Hutchison Whampoa for $11.2 billion, without paying tax. Vodafone says that the deal was conducted abroad and is not covered under Indian tax law — and that if anyone should be liable, it would be the Chinese seller rather than the buyer.

The Indian tax man disagreed. When India’s Supreme Court sided with Vodafone, the New Delhi government retroactively changed its tax laws and served Vodafone with a bill for $3.75 billion in tax, penalties and interest.

Governments around the world, including the Obama administration, complained that India’s tax laws were deterring foreign investment.

The telecom debacle stems from the government’s failure to set up an independent, autonomous and credible regulatory authority, such as the Federal Communications Commission, said former regulator Satya N. Gupta.

Instead, India’s Communications Ministry makes policies and implements them, its bureaucrats and ministers unwilling to surrender power — power that Raja is accused of abusing by changing the rules to favor his cronies.

Some experts say the industry has to take much of the blame, because companies constantly lobby for rules to be changed or decisions to be made in their favor.

Others accuse the Supreme Court of overstepping its mandate and entering the realm of policymaking. But Gupta says that was an inevitable product of the way the system was set up, that the court stepped in only because the institutions of government had failed.

"If the regulator was an independent and empowered body with executive responsibility, this would not have happened."

Rajeev Chandrasekhar, a former information-technology and telecom entrepreneur who is now a member of Parliament, said India’s governance has simply not kept pace with the economy’s transformation.

"The government as an institution is still in the 1800s, while the private sector is in the 2100s," he said. "There is nothing in India you can do without going to the government for some kind of clearance. There is always government in your life. These two worlds keep knocking at each other."

For more details visit https://cis-india.org/news/telecom-success-story-turns-sour

3rd IJLT-CIS Lecture Series at NLSIU, Bangalore

praskrishna — 2012-05-25T15:33:16Z

The Indian Journal of Law and Technology in association with the Centre for Internet and Society, Bangalore is organising the 3rd IJLT-CIS Lecture Series at the National Law School of India University, Bangalore. The lecture series will be spread out over the course of the year and will include eminent speakers who will talk with the students and other interested persons on their topics of expertise.

To kick off the lecture series, Professor Rohan Samarajiva will deliver the inaugural lecture on Tariff Regulation in South Asia.

Tariff regulation has in the recent past attracted the attention of the Telecom Regulatory Authority of India and the Telecom Dispute Settlement Appellate Tribunal, as well as the Department of Telecom at the Union Ministry of Communications. India has a burgeoning and competitive cellular services provider market, and tariff regulation has far-reaching impact on the industry. Moreover, as aware consumers of mobile telephony and data services, this is an issue that is relevant for all of us.

Prof Samarajiva is a pre-eminent figure in policy-making and academia on the subject of information and communications technology, and this is an excellent opportunity to get his insights on the crucial topic, not just from an Indian perspective but from a pan-Asian viewpoint. He has taught at universities in USA, Netherlands and Sri Lanka and is currently Chairman & CEO, LIRNEasia, an ICT policy and regulation think tank active across 12 emerging Asian economies. He is also a Board member at Communication for Policy Research - South, which is a capacity building initiative to develop Asia-Pacific based policy initiatives on ICT policy regulation among junior to mid level scholars. His full profile can be accessed here.

The lecture will be organised at NLSIU, Bangalore on Sunday, the 27th of May, 2012 from 5.30 pm to 6.30 pm. You are requested to take your seats by 5.20 pm. The hour-long session will include both a lecture and an interactive session with the speaker. Interested persons are requested to register for the lecture series by sending in an email to editorialboard@ijlt.in

The address of the venue is

National Law School of India University
Jnanabharati Road, Nagarbhavi
Bangalore - 560072
Google maps location: http://g.co/maps/ppwcr

Follow our event page ‘3rd IJLT-CIS Lecture Series’ on Facebook to remain updated!

Download the event poster [PDF, 57 kb]

For more details visit https://cis-india.org/telecom/ijlt-cis-lecture-series-nlsiu

Google Policy Fellowship Programme: Call for Applications

praskrishna — 2012-05-24T15:38:28Z

The Centre for Internet & Society (CIS) is inviting applications for the Google Policy Fellowship programme. Google is providing a USD 7,500 stipend to the India Fellow, who will be selected by August 15, 2012.

The Google Policy Fellowship offers successful candidates an opportunity to develop research and debate on the fellowship focus areas, which include Access to Knowledge, Openness in India, Freedom of Expression, Privacy, and Telecom, for a period of about ten weeks starting from August 2012 upto October 2012. CIS will select the India Fellow. Send in your applications for the position by June 27, 2012.

To apply, please send to google.fellowship@cis-india.org the following materials:

Statement of Purpose: A brief write-up outlining about your interest and qualifications for the programme including the relevant academic, professional and extracurricular experiences. As part of the write-up, also explain on what you hope to gain from participation in the programme and what research work concerning free expression online you would like to further through this programme. (About 1200 words max).
Resume
Three references

Fellowship Focus Areas

Access to Knowledge: Studies looking at access to knowledge issues in India in light of copyright law, consumers law, parallel imports and the interplay between pervasive technologies and intellectual property rights, targeted at policymakers, Members of Parliament, publishers, photographers, filmmakers, etc.
Openness in India: Studies with policy recommendations on open access to scholarly literature, free access to law, open content, open standards, free and open source software, aimed at policymakers, policy researchers, academics and the general public.
Freedom of Expression: Studies on policy, regulatory and legislative issues concerning censorship and freedom of speech and expression online, aimed at bloggers, journalists, authors and the general public.
Privacy: Studies on privacy issues like data protection and the right to information, limits to privacy in light of the provisions of the constitution, media norms and privacy, banking and financial privacy, workplace privacy, privacy and wire-tapping, e-governance and privacy, medical privacy, consumer privacy, etc., aimed at policymakers and the public.
Telecom: Building awareness and capacity on telecommunication policy in India for researchers and academicians, policymakers and regulators, consumer and civil society organisations, education and library institutions and lay persons through the creation of a dedicated web based resource focusing on knowledge dissemination.

Frequently Asked Questions

What is the Google Policy Fellowship program?
The Google Policy Fellowship program offers students interested in Internet and technology related policy issues with an opportunity to spend their summer working on these issues at the Centre for Internet and Society at Bangalore. Students will work for a period of ten weeks starting from July 2012. The research agenda for the program is based on legal and policy frameworks in the region connected to the ground-level perceptions of the fellowship focus areas mentioned above.

I am an International student can I apply and participate in the program? Are there any age restrictions on participating?
Yes. You must be 18 years of age or older by January 1, 2012 to be eligible to participate in Google Policy Fellowship program in 2012.

Are there citizenship requirements for the Fellowship?
For the time being, we are only accepting students eligible to work in India (e.g. Indian citizens, permanent residents of India, and individuals presently holding an Indian student visa. Google cannot provide guidance or assistance on obtaining the necessary documentation to meet the criteria.

Who is eligible to participate as a student in Google Policy Fellowship program?
In order to participate in the program, you must be a student. Google defines a student as an individual enrolled in or accepted into an accredited institution including (but not necessarily limited to) colleges, universities, masters programs, PhD programs and undergraduate programs. Eligibility is based on enrollment in an accredited university by January 1, 2012.

I am an International student can I apply and participate in the program?
In order to participate in the program, you must be a student (see Google's definition of a student above). You must also be eligible to work in India (see section on citizen requirements for fellowship above). Google cannot provide guidance or assistance on obtaining the necessary documentation to meet this criterion.
I have been accepted into an accredited post-secondary school program, but have not yet begun attending. Can I still take part in the program?
As long as you are enrolled in a college or university program as of January 1, 2012, you are eligible to participate in the program.
I graduate in the middle of the program. Can I still participate?
As long as you are enrolled in a college or university program as of January 1, 2012, you are eligible to participate in the program.

Payments, Forms, and Other Administrative Stuff

How do payments work?*

Google will provide a stipend of USD 7,500 equivalent to each Fellow for the summer.

Accepted students in good standing with their host organization will receive a USD 2,500 stipend payable shortly after they begin the Fellowship in August 2012.
Students who receive passing mid-term evaluations by their host organization will receive a USD 1,500 stipend shortly after the mid-term evaluation in September 2012.
Students who receive passing final evaluations by their host organization and who have submitted their final program evaluations will receive a USD 3,500 stipend shortly after final evaluations in October 2012.

Please note: Payments will be made by electronic bank transfer, and are contingent upon satisfactory evaluations by the host organization, completion of all required enrollment and other forms. Fellows are responsible for payment of any taxes associated with their receipt of the Fellowship stipend.

*While the three step payment structure given here corresponds to the one in the United States, disbursement of the amount may be altered as felt necessary.

What documentation is required from students?

Students should be prepared, upon request, to provide Google or the host organization with transcripts from their accredited institution as proof of enrollment or admission status. Transcripts do not need to be official (photo copy of original will be sufficient).

I would like to use the work I did for my Google Policy Fellowship to obtain course credit from my university. Is this acceptable?

Yes. If you need documentation from Google to provide to your school for course credit, you can contact Google. We will not provide documentation until we have received a final evaluation from your mentoring organization.

Host Organizations

What is Google's relationship with the Centre for Internet and Society?

Google provides the funding and administrative support for individual fellows directly. Google and the Centre for Internet and Society are not partners or affiliates. The Centre for Internet and Society does not represent the views or opinions of Google and cannot bind Google legally.

Important Dates

What is the program timeline?

June 27, 2012	Student Application Deadline. Applications must be received by midnight.
July 18, 2012	Student applicants are notified of the status of their applications.
August 2012	Students begin their fellowship with the host organization (start date to be determined by students and the host organization); Google issues initial student stipends.
September 2012	Mid-term evaluations; Google issues mid-term stipends.
October 2012	Final evaluations; Google issues final stipends.

For more details visit https://cis-india.org/internet-governance/google-policy-fellowship

The Coming Telecom Monopoly

Shyam Ponappa — 2012-05-24T07:36:55Z

The 2G judgment and Trai spectrum pricing recommendations have led to a policy that makes sense for only one survivor.

Shyam Ponappa's column was published in the Business Standard on May 3, 2012

The Telecom Regulatory Authority of India, or Trai, has delivered a stunning blow to the telecom sector in the form of its spectrum pricing and refarming recommendations. The sector was already reeling from scandals and misgovernance, and staggered by a confused Supreme Court judgment based on inappropriate assumptions (for details, see “Time for a review”, March 1, 2012, and “Open access is the future,” March 4, 2012). This will cripple an erstwhile sunrise sector that drove (and still can) India’s prosperity through productivity, enabling many factors to converge positively — such as its economic momentum, enterprise, resilience and, most important, a demographic bulge that could become a blessing or a curse. This convergence was (and is) possible because of the enabling ability of telecom and broadband to provide access to education, vocational training and continuing education; health care and other public services; and commerce, including the delivery of individual output, within easy reach. All this is stalled, as we deliberately disembowel ourselves, as it were.

If Trai’s recommendations are implemented, they will ensure that a lone survivor dominates the sector, annihilating all significant competitors – Bharti, Vodafone, Idea, Tata, and newcomers like Telenor and Sistema – through their having to pay exorbitant fees just to keep their current business going, even without expansion. That is, provided the lawsuits that are likely to follow don’t obliterate everything for the next 10 years.

Are these setbacks happenstance, heaven-sent, or acts of man? Analysing the components shows that much is attributable to the machinations of men, although rendered by different individuals or groups under varying compulsions. The afflictions that began with cronyism and misgovernance have been aggravated by a judgment based on misapprehensions regarding: (a) spectrum technology; (b) the economics of auctions and; (c) competition in network economies.

In trying to get at the corrupt nexus of corporations, politicians, bureaucrats, and just plain crooked people, indiscriminate zealotry is destroying legitimate enterprise. The judgment lumps the guilty with the circumstantially proximate. Coupled with defining auctions as best for the public interest, this set the stage for what has followed. The furore over corruption and the Anna Hazare movement ensure that any objective recommendation would come under fire, with a mobocracy baying for revenge.

Is being deprived of ubiquitous, reasonably-priced broadband so devastating? Yes, because of broadband’s great potential in India’s vastness for enabling people at relatively low cost, compared with, say, fixing energy supply, or sanitation and water, or roads, or growing food. All these are necessary; but broadband is much easier to achieve, at lower cost, and would bring it all more easily within our grasp, especially in rural areas.

Performance

Some question the beneficial effect of revenue sharing from the National Telecom Policy, 1999, (NTP-99) suggesting the sector might have done as well or better without the change. Pakistan is cited as an example for growth with auctions. Consider the performance of the sector in both countries.

Chart 1 - Mobile Subscriptions (Millions) 2003-2010

(The third line shows India’s numbers reduced to 70 per cent, reflecting an estimate of live subscriptions.)

Chart 2 shows the percentage of population served. Pakistan’s coverage grew

Chart 2: Percent Population Covered

Sources: India – TRAI; PIB; http://en.wikipedia.org/wiki/Telecommunications_Statistics_in_India
Pakistan - http://www.pta.gov.pk/index.php

rapidly until about 60 per cent, then tapered off. India started more gradually before accelerating to 60 per cent a couple of years later, and kept going. In March 2011, both were around 70 per cent. At the end of December 2011, India was at 76.86 per cent.

However, there are two major differences. One is the scale of India’s operations. Sheer magnitude makes for much greater complexity, and the achievement is therefore remarkable. The second is the significantly higher government levies in India. India’s telecom sector is perhaps the world’s most heavily burdened, with government collections higher than in Pakistan by 15 to 24 per cent of revenues.* (Compared with China,where government charges are only 3.5 per cent, India’s levies are even more grossly out of line.) Had Indian enterprises not had this burden, it’s conceivable they might have had the capacity and stomach to effectively address rural coverage, especially with the right incentives.

Achieving Ubiquitous Broadband

Now consider what needs doing for countrywide access to broadband, and what odds have to be overcome. First, there’s the addition necessary to rural and semi-urban networks, where almost three times the existing coverage is needed. Much of this needs wireless access. This is why spectrum pricing critically affects outcomes. Many people in India harp on a litany of sunk-costs-not-affecting-tariffs, oblivious to the vast deficiency in network coverage, ie, areas and people without access. It’s like arguing over pricing without any production plant or products. Without capital investments in network coverage, there can be no services, nor any tariffs, high or low. There is little doubt of the effects of high spectrum and licence fees: these needs remain unmet. Hence the low rural teledensity of under 39 per cent at the end of February 2012, with urban coverage at nearly 170 per cent, and overall teledensity at 78 per cent. Separately, there’s the issue of inadequate incentives for broadband delivery.

Statements from Trai and the Department of Telecommunications about the spectrum pricing recommendations being reasonable because of the revenue potential simply don’t add up. Their projections are based on a fantasy of booming growth (like the Budget projection of 7.6 per cent GDP growth, but even more exaggerated). Whereas the combined effect of the scam and its fallout, sentiment, momentum, and misguided efforts at tax-gouging will ensure that telecom revenue growth is no more than a stunted five to seven per cent, at best. No bank will lend seven-year funds in such uncertain circumstances to what was once a sunrise sector — but is now like heavy infrastructure, with a need for 20-year financing. Add the costs and difficulty of refarming the 900 MHz spectrum, and one has to wonder: who is going to bid, and why? It makes sense only for one survivor. All this is aside from the extension of subsidised non-performance at the PSUs, instead of transforming them into anchors of an open-access national network.

For more details visit https://cis-india.org/telecom/coming-telecom-monopoly

International ‘code-athon' in Bangalore

praskrishna — 2012-04-27T10:48:34Z

The Centre for Internet & Society hosted this event in Bangalore. The Hindu covered the event.

April 22 will be the second day of an international code-athon being held simultaneously in cities across the world. In Bangalore, this International Space Apps challenge is being held at the Centre for Internet and Society in Domlur. This event, coordinated by the U.S. space agency NASA, is part of the U.S.'s programme to promote Open Government Partnership.

The challenge is grouped into four categories: Software Development, Open Hardware, Citizen Science Platforms and Data Visualisation. The contest aims at addressing strategic space exploration needs, a press release from CIS stated.

Click for the full story published in the Hindu on April 22, 2012.

For more details visit https://cis-india.org/news/sms-feature-on-google-plus

Convergence India 2012

Yelena Gyulkhandanyan — 2012-03-30T05:46:41Z

The 20th Convergence India conference, deemed South Asia’s largest international ICT event, took place in the country’s capital from March 21-23, 2012. Featuring a grand exhibition of innovative products and industry players from over 25 countries as well as an assembly of prominent speakers, the three day event highlighted the importance of ICT growth and equitable distribution for the socio-economic future of India.

Yelena Gyulkhandanyan from the Centre for Internet and Society attended the event organised by Exhibitions India Group and shares her experiences through this post.

India Goes Digital

The opening panel discussion, “India Goes Digital”, initiated the three-day-long exchange of knowledge and experience centring around telecom, information security, mobility, cloud computing, cable, satellite, broadcast, media, and social services offered through ICT’s. A principle theme throughout the conversation was the significance of mobile penetration in India.

Stressing the tremendous opportunity for equitable service distribution presented by mobile service delivery, Rajiv Bawa, the Chief Representative Officer (Head-Telenor India), pointed to a study which found that mobile devices are more accessible in India than television sets and are proving to be the main mode of reaching people. Dr. J.S. Sarma, Chairman Telecom Regulatory Authority of India, who headed the panel, emphasized the importance of data and application services for the expansion of digitization in India. The application industry needs to be mobilized in the field of education, agriculture, banking, finance, and others. A. K. Bhatnagar, Doordarshan Engineer-in-Chief highlighted the advantages of digitization, those being superior quality, flexibility, high reliability, spectrum and power efficiency, as well as multimedia and Value Added Service (VAS) delivery. The growth of digitization has been enabled by techniques such as coding, modulation, and multiplexing.

While all speakers maintained that digitization will contribute to an inclusive and equitable growth in the country, no one denied the challenges lying in the road ahead. Out of the 900 million mobile subscribers accounted for in India, only 500-600 million are active users, remarked Pankaj Mohindroo, Managing Director, South Asia, NICE Systems. Many people are still left out of the telecommunications network. Extending mobile services to rural and remote areas and making hardware more affordable is a priority. As a step towards meeting some of these objectives, Mr. Mohindroo praised the National Optical Fibre Network (NOFN) initiative to provide broadband connectivity to all Panchayats. As well, the WiFi model needs to be leveraged to further extend coverage.

Long Term Evolution

Long Term Evolution (LTE) is a wireless broadband technology that enables roaming Internet access through cell phones and handheld devices. It seeks to provide excellent quality IP-based services such as VoIP and web site browsing. Compared to 2G and 3G technology, LTE has much faster download rates. Panel participants discussed the development of revenue generating business models for LTE deployment and some challenges for operators in India.

Skyware Global: ODU system provider

By 2014 the Asia-Pacific region is expected to be the biggest market for LTE, acquiring 40 per cent of the world market by 2016. Thirty-five countries have already launches LTE services; panel participant S. P. Jeyrath, Advisor, Tulip Telecom, is sure that India will add to this number, becoming a story of great growth. Nevertheless, to for LTE to succeed, some core challenges need to be met. Some of these include: high prices of smart handsets; limitation of spectrum and coverage area of existing operators; and the challenge of using current infrastructure to deploy mobile broadband. According to Jaswant Boyat, Technical Director-SP India & SAARC, Cisco, content management and the development of regional and national data centres is a priority when introducing LTE services in India. Other strategies involve decreasing tariffs to make the services more affordable and creating a solid marketing strategy.

Greet ICT’s

With the increasing spread ICT’s worldwide, green ICT’s are becoming integral for sustainable development. Green telecom networks and solutions for telecom in India were the topics of the next day’s conversation. Naresh Ajwani, Chief Regulatory and Corporate Affairs, Viom Networks Limited, pointed out that the matter of employing green technology concerns the telecom industry because India has a 33% electricity penetration, while the telecom penetration is beyond 65 per cent. It was also recognized that India’s carbon footprint is minimal, but that should not stop the implementation of environmentally-friendly solutions where it is feasible to do so.

The speakers highlighted a number of attainable solutions for greening the telecom industry in India. According to Jacob Mathews, VP – Network Services, Aditya Birla Group, regulators should set energy targets and embark on a strict monitoring program to ensure compliance. Sharat Chandra, Managing Director, TelEnergy Technologies Pvt. Ltd., stressed that Renewable Energy Service Companies (RESCO’s), the Ministry of New and Renewable Energy (MNRE), and telecom operators need to work together to achieve the set targets. Specialists in renewable energy solutions need to be given participatory space and be treated as partners in the process of innovation. Other key factors in reducing energy consumption are infrastructure and spectrum sharing, as well as optimizing solar and biomass technologies that are already available.

Mobile Service Delivery

Mobile Financial Services

With mobile penetration on a phenomenal rise, a cell phone holds the promise of reaching the most marginalized members of the population; facilitating an accessible and equitable service distribution; and ushering in a new era where a simple hand held device that fits in our pocket will be the bridge that extends through the vast digital divide. Panel members discussed and debated the potential of mobile-enabled services, in particular, mobile financial services, m-education, m-governance, m-health, and m-entertainment.

President and Country Head, Yes Bank Limited, Tushar Pandey, listed the three factors of financial inclusion: savings, insurance, and credit. However, the challenge in distributing these factors to all members of the population is that many citizens still do not have a bank account. Fortunately mobile phones have succeeded in reaching many of those that are left out of the banking system. This reality makes mobile financial services, such as money transfers, wallets, and banking a viable alternative. The mobile payments platform is for the bottom of the pyramid consumers, explained Dr. Sam Pitroda, Advisor to PM, because it gets rid of the middleman and hence reduces opportunities and incidences of corruption and money swindling. Through mobile money transfers, people can get government monetary assistance, such as subsidies, directly through their phone. All that is needed for mobile transactions are payee’s mobile number and the Mobile Money Identifier (MMID) which is a seven digit account number assigned by the bank.

Presently, it is possible to send up to Rs. 5000 over a text message. Nevertheless cash transactions are still predominant in India. Anand Bajaj, CIO, Yes Bank Ltd., compared India’s cash economy, which is approximately 50-60 per cent to Sweden’s, where it is around 4 per cent. According to Sonny Sannon, CEO, Transnet India, for mobile financial services to really take off, there needs to be a unifying brand much like ISIS in US, which is a joint venture between AT&T, T-Mobile and Verizon Wireless specializing in mobile payments. A significant investment in marketing, advertisement, and customer literacy is also required.

Mobile Service Delivery in India

As stated by Vinod Melarkode, Director – Qpass, Amdocs, the service industry contributes to 55 per cent of India’s GDP. Mobile services can further increase this percentage. Melarkode proceeded to outline the advantages of m-services: m-governance will contribute to a decrease in costs associated with service distribution as well as enhance social inclusion; m-learning will extend basic education, as well as enable the sharing of exam tips and result alerts; m-information will extend access to knowledge and entertainment; m-health will allow medical examinations and diagnosis to be done remotely. Several factors need to be in place for the success of the m-service model: cloud based solutions need to be implemented; the model needs to be easily assimilated with exiting mobile network operator systems; as well, the model should be scalable, secure, and high performing. Android phones are secure and affordable, and can further enable the proliferation of m-services.

Describing m-service initiatives that are already being implemented throughout the country, the speakers reflected on present challenges and solutions for the future. Sanjay Vijaykumar, Co Founder & CEO, MobMe, reflected on his observations on an initiative involving fishermen receiving information on their mobile phones about the whereabouts of fish obtained through satellite monitoring. According to Vijaykumar, for the past three years the only message that the fisherman receive is “cloudy, no service”. This case study was used to illustrate that m-initiatives often look good on paper, but do not work in reality. Hence constant monitoring and evaluation is necessary to maintain the service.

Anupam Varghese, VP – R&D, Eko India Financial Services Private Limited, spoke about a project in Bihar where ASHA (Accredited Social Health Activist) workers receive their pay through their mobile phones.Varghese pointed out that this is a successful case study, but such models need to be replicated on a large scale. Reflecting on the e-governance scheme, he was of the opinion that e-governance currently does not function as widely and efficiently as it could, because it is not mandated by law and hence is not implemented as extensively as it should. The Electronic Delivery of Services Bill, which mandates the electronic delivery of all government services, is a step towards overcoming this challenge. Referring to the concern that even if electronic service delivery systems are established, people will not have the necessary skills and awareness to use them, he asserted that we need to begin with creating infrastructure and systems for service delivery, and given time, we can be sure that people will learn to use them.

The Exhibition

An expanse of exhibits displaying some of the latest technologies and innovative service models stretched outside the conference hall. The exhibition proved to be a prolific ground for networking opportunities and knowledge dissemination.

For more details visit https://cis-india.org/telecom/convergence-india-2012

An Interview with PK Garg

Yelena Gyulkhandanyan — 2012-03-14T05:20:15Z

Former Wireless Advisor to the Government of India, Ministry of Communications & IT, and current ITU regulatory board member, PK Garg, discusses some of the telecom policy interventions in an interview with Yelena Gyulkhandanyan. As of March 2010, India’s telecommunication network has become the third largest in the word, with teledensity increasing from 5.11 per cent in 2003 to 52.74 per cent.[1] This tremendous growth is largely attributed to the evolution of telecommunication policies which served to create competition within the market and affordability in service provision.

P. K. Garg: In 1991, the teledensity of India was less than 2 per cent. The then government, as part of the economic liberalization policy wanted the teledensity to grow fast. At that point of time the government was supporting the telecom sector for the growth of teledensity to the tune of about four to five billion dollars per year through the annual budget. During the same time frame it was felt that the government would further need to support the telecom sector to almost double the level if teledensity was to reach five per cent and also if every village was to have a telecom connection to make telecommunications accessible to each and every citizen. At that time the thrust was more on accessibility rather than having an individual connection for every home or every citizen.

Yelena: So if a telecom connection is accessible to the whole village then all villagers can share one line instead of having an individual connection?

P. K. Garg: Yes, until that time telecom facilities were not accessible to many people. So with the accessibility at least if there is one telephone in the village, whether it is a PCO, whether it is a phone in the Panchayat, all can use it. So the thrust of the government at that time was that the telecom facilities should be made accessible to all citizens. And even for taking the teledensity to five per cent it was estimated that it would require about 25 to 30 billion dollars over a period of five years. The government made provision for almost three-fourth of this money in the Indian budgets and the planning processes. So the fiscal imbalances, etc, that is an overall economic aspect, not only related to telecom. I think you have plenty of material from other sources on what measures the government took to deal with the issue – one of which was the liberalization: entry of the private sector was decided upon and it was also decided that the government telecom department would concentrate on increasing the accessibility through line telephones. The entry of wireless was to be left to the private operators, because the government money that was available for this was limited.

Yelena: And this was prior to 1994?

P. K. Garg: This was around 1991-1992 time frame. The government decided that the wireless telephony (mobile telephony) should be left to the private sector because it would require quite a significant investment and if the government funds were diverted to the mobile wireless service provision then it would have to reduce the investments available for line telephony and increase of teledensity. Another factor at that point of time was that nobody felt that mobile telephony will grow to that extent. They were feeling that one might get a few million connections, maximum four to five millions, because it was considered to be a service for rich and elite people, business people, top bureaucrats, but not so much for the common masses.

Yelena: So where did that shift come where the government realized that mobile connections are important for all citizens?

P. K. Garg: I would say it was a combination of many factors. To understand this one has to go through the history of our wireless mobile telephony a little bit. In 1994, licenses for mobile telephony in India were granted for the four metro service areas – Delhi, Mumbai, Chennai and Calcutta. Two operators in each of these areas were selected. At that time it was not pure bidding; it was sort of a beauty contest where certain pre-conditions were made and only those who technically qualified for those conditions could bid for that. At that point of time the government had indicated a certain ceiling for the tariffs and at that point of time outgoing calls as well as incoming calls – both were charged. Then around 1995-96 the mobile telephony licenses for other areas of the country were auctioned. It was slightly different from the 1994 bids which were more on the pattern of a beauty contest. And not only the mobile telephony licenses were auctioned; it was considered then that one more operator in each area should come in the line telephony sector also as a competitor to the government operator – first, to provide competition, secondly, to add to the government efforts to increase the teledensity.

Yelena: So the government operator was BSNL right?

P. K. Garg: At that time it was not BSNL, it was called the Department of Telecom and only in Delhi-Mumbai it was MTNL. MTNL was formed in 1986, and it was managing the Delhi and Mumbai areas. The rest of the country was still under the Department of Telecom. Later on they converted into the Department of Telecom Services. And in 1996-97, one private licensee or one operator for line telephony areas was also selected through auctions. The private operators began functioning in 1995, starting their services slowly with first mobile telephony networks in the metro areas. Mobile telephony networks in the other areas started functioning around 1996-97 and the private operators for line telephony were allowed to use wireless in the last mile, the WLL wireless in local loop. So they also started rolling out their networks in 1997.

However, around the beginning of 1998 most of the operators, especially the mobile telephony operators, felt that their business case which was the basis of their bids was not right. And 1) the growth was not as expected; 2) the ARPU (average revenue per unit/ subscriber) was far below their expectations which they had assumed for their business case. So the net result was that they approached the government saying sorry, we made a mistake in our business calculations and the government has to bail us out, otherwise we will not be able to service the existing customers also. And as you can appreciate most of these funds were lent by banks and financial institutions. That was not necessarily the money of the promoters. So then the lending banks and financial institutions also supported the cause of the operators with the government. Because many of our banks who had given money to the operators were nationalized banks, some of them were private also, but most of them were nationalized banks, and if the national banks were not able to recover their loans, it means the public money is gone. So the government had set up a high level group, ministerial level group, in the last quarter of 1998 to examine this issue and the group had detailed discussions with the operators, the banks, the user groups, the economists in the country and many others. They also consulted international experts. Then finally government agreed that, yes, some relief needs to be given to these companies/ operators. And that is how the new telecom policy of 1999 came into play.

The most salient aspect of that policy was revenue share. The license fee was earlier based on their bids, and in India it was not a total payment of auction amount upfront, it was staggered. The bid itself was payable over 10 years and the operator had the choice to indicate at the time of bidding how he would like to pay – whether he would like to pay uniformly or whether he would like to pay less in the beginning, more in the end, or he would like to pay more in the beginning, less in the end – he had the choice. And as per the normal economic rules the government then calculates the net present value of that bid amount for the purpose of comparison. So the result was that instead of the fixed license fee, the government said OK, now you will not pay any prefixed amount but you will pay a percentage of the revenues which you will earn. That was a big relief because then the operator was not required to pay any fixed amount which was quite large, and he was to pay a percentage of the revenue towards the license fee.

Yelena: So it depends on how much money they make…

P. K. Garg: So if the subscriber growth is there, they get revenues, they pay that much, and if they don’t get adequate revenues, they will pay less, if they get more revenues they will pay more. And then the spectrum charges also, which were earlier based on a formula, were also changed over to the revenue share or percentage of their revenues.

Yelena: What was the formula?

P. K. Garg: Earlier the formula was that for each city, say 1MHz of paired spectrum was charged at about $10 000 per year, per city and in addition there was a fee of Rs.100 (appox $ 2) per subscriber, per year that is the wireless license charge. So instead of separate spectrum royalty and the license fee, both were combined and it was taken as the revenue share. So the burden of a fixed fee was taken away and the operators were to pay a percentage of their earnings; whatever the revenues they get, they pay a part of that. So that was the biggest consequence of the New Telecom Policy 1999. This allowed the operators to reduce their tariffs because anybody can appreciate the two barriers for the growth of mobile telephony: cost of the handset which is entry level cost and the tariff costs. During 1999-2000 onwards the cost of the handsets was already coming down. Plus the revenue share allowed the operators to reduce the tariffs, because earlier if they were charging half a dollar per minute then they were paying a fixed amount of license fee and spectrum charges out of that, but now if they were to reduce their tariff from half a dollar to 10 cents, they would be paying only the license fee and the spectrum charge as a percentage of the revenue out of the 10 cents only. So they didn’t have much of a fear to reduce their tariffs, because the payment to the government will also be less. These factors encouraged them to reduce their tariffs – one was competition and the second was that they could get more customers.

Then the next point which encouraged the fast growth was the decision of our regulator in 2003 that only the calling party will pay; the receiving party will not pay. Earlier even the receiving party on the mobile had to pay.

Yelena: In Canada, if you don’t have a good plan, you still have to pay to receive a call.

P. K. Garg: In US also. It is there still. Even if I receive a call I will have to pay. So the charges for receiving a call were a hindrance, especially with the lower strata of society, because they were hesitant to receive the call if they had to pay. But once the liability was removed from the receiving party, many people started using the phone for receiving only. For example, the self employed artisans, electricians, painters, carpenters, anybody else could give their mobile telephone numbers to the prospective customers or clients and when they need their services they could call them without any financial penalty to the receiving party. One doesn’t have to pay anything except for the normal monthly or rental charges if one uses the phone for call receiving purposes only. That gave a tremendous boost to our telecom sector growth. For example, in early 2003, until this regulation was enforced, the total number of mobile customers in India was in the region of 10 million. These 10 million subscribers came, you can say, spread over at least 4-5 years starting from 1995. But from there onwards, the growth started picking up to almost more than 1 million subscribers per month. Another factor as I mentioned is that by that time the cost of the handset had come down to about $50-$60.

Yelena: How much was it before?

P. K. Garg: Initially in the 1995 time frame it was very much in the range of about $600. And from $600 it came to $60 (one-tenth). So these factors – the entry level cost of the handsets coming down, the tariffs also becoming low and the receiving calls becoming free – they were the factors which put mobile telephony on a very fast growth. Thereafter it’s well known to everybody because we crossed 100 million mobile subscribers in the middle of 2006 and from there onward it has been picking up and the country has seen almost 15 million per month new connections. Now also it is about 10 million new connections per month but it had even crossed 15 million during some time frame around 2007-08. So that is how the growth took place.

Yelena: The unified access services license: I think it was introduced in 2003. Could you speak about some of the reasons it was introduced?

P. K. Garg: Basically it is not my area of specialization, because mine was spectrum related, but I will give you some general aspects which I know. As part of the telecom policies most of these concessions were given to the operators. Then the government got from them some concessions or levied upon them certain conditions. For the mobile operators, government said that it will bring in a third operator which was the government operator. Moreover, the government also said that because we are giving you a concession with the license fee, etc, the government will have the right to introduce more operators as and when it feels the necessity for it in the public interest. Similarly for the line telephony also, since line telephony operators were also allowed certain concessions, in 1999 the government said that it may introduce more operators in addition to the one government and one private operator. So then in the year 2000 the government asked the government operator to enter the mobile telephony as the third operator. The name of the operator was MTNL in Delhi and Mumbai and then the remaining areas the operating wing of the telecom department was renamed as BSNL. BSNL was formed in October 2000. Then BSNL was asked to enter the mobile area for the rest of the country except Delhi-Mumbai where MTNL was there. Then in 2001, the government felt that one more private mobile operator can be introduced for which bids were called. They also said that for line telephony, because the issue of spectrum was not there, anybody who wished to come for line telephony would be allowed to do so. And then one operator came almost for all over India, that was Reliance in the line telephony. TATA also came into the play for a few areas and then couple of others were there like Shyam telecom for one or two areas as well as HFCL for one or two areas for line telephony. For mobile telephony, because it was only one license to be given, no single operator could get it for the areas all over India. Then some places Airtel got, some places went to Vodafone, and some places Idea received. So like that, all of the 22 circles went to different operators.

Yelena: And prior to this, per circle there were only two wireless operators?

P. K. Garg: Initially there were two mobile operators, third one became BSNL-MTNL, and the fourth one was introduced in 2001. And then what happened was that the fixed line operators were allowed wireless in the last mile. So they adopted CDMA; Reliance chose CDMA system to provide WLL and this CDMA technology had developed by that time to a level that could provide full roaming. Not only could it provide the wireless in local loop in the last mile but it could also provide full roaming and it was sort of alleged by many people and even the wireless mobile operators that Reliance had started providing full mobile services and not restricting to WLL which was the mandate of their license. That gave rise to many legal issues; there were legal cases by the mobile operators saying that the bid amounts offered by the fourth cellular operator in 2001 and the fixed line operators were quite different. The line operators’ bids were very low and the mobile operators’ bid amounts were very high; not as high as 1996-97 time frame, but still very high as compared to the bids of the fixed line operators. So they said that this was unfair competition and this was not allowed as per policy; why are they doing it? They went to court where they made the government also as a party, claiming that the government was allowing them to do it. At that time, in 2003, the government realized that this dispute in the telecom sector should be ended. After consultations with the Telecom Regulatory Authority the government decided to no longer issue separate licenses for basic fixed line services and cellular services, and instead introduced the Unified Access Services License (UASL). The earlier fixed line operators were given a choice that if they wanted to go for full mobility using CDMA or whatever technology, they could do so by paying the bid amount which was paid for the cellular licenses in 2001.

Yelena: And dual technology licensing came about in 2007 I believe?

P. K. Garg: Yes that was in 2007. Until that time an operator could have either mobile services in a CDMA or GSM, but not both.

Yelena: Great. Thank you for this history overview of telecommunications in India.

As part of CIS’s research interests in unlicensed spectrum policies, P. K. Garg was asked to comment on international and national level policies, as well as his perspective on the matter.

Yelena: Do ITU radio regulations reserve any bands for unlicensed use?

P. K. Garg: ITU radio regulations include the international allocations of different frequency bands. These international regulations are agreed by all the member countries of ITU at the world radio conferences. So it is agreed by all the countries, all the countries have to abide by that. In the international allocations there is no band which is unlicensed. There are certain bands which are allocated for ISM (Industrial Scientific and Medical) uses. For example, some bands are earmarked for microwave ovens because that’s an industrial use. Now of course it is for home use also but microwave ovens initially were for industrial use. Similarly certain frequency bands are for operating medical devices. And there are certain other scientific requirements for other bands. So there is a category called ISM (Industrial Scientific and Medical).

Yelena: And are these the 5GHz and 2.4 GHz bands or are there more?

P. K. Garg: Yes, they are also there, but there are many other sub-bands which are allocated for ISM services. Now many of these bands have been de-licensed for public use in many countries and as you said just now, the 2.4GHz, 5.2GHz, and 5.7GHz are the bands. There are other bands also. Many social requirements like cordless phones, let’s say individual requirements of the society, were developed in many of these unlicensed ISM type bands, because it was considered impractical both for the users, the vendor as well as the regulating authority in the country to issue licenses for each and every cordless phone. That is why they were developed in these bands. Some of these bands were de-licensed first in US and few other countries just like the 1500 or 1600 MHz sub bands. Then there was a band earlier around 150MHz, subsequently there were some parts even in the 900MHz band and the 450MHz band. That is where these cordless phones were developed. The cordless phones were one of the first de-licensed usages. Prior to that there were, you might have heard of them, walkie-talkies. They operated on 400MHz and covered a range of maybe a kilometre. That was to be used when people would go in the forest or trekking or camping, etc. So they were also developed in the ISM bands which were de-licensed in few countries.

Then as the requirements of the cordless phones came subsequently for WiFi modems, all these technologies were developed in ISM bands and even in those countries where they were not de-licensed, it was felt that it was better to de-license them, because 1) it will provide benefit to the society 2) it would be impractical to regulate their use or issue a license for everybody, because, for example, if one thinks of even regulating it or issuing licenses for WiFi modems it is practically impossible. And so the spectrum management authorities in the countries, any country, have to weigh how much is the benefit to the society by de-licensing; that is number 1. Number 2 – whether they can de-license or if there are some other users already there in that band, and how to shift them if possible, because those licensed operators/users have to be protected.

So, for example – the 2.4GHz band was de-licensed in India in 2004. For Licensed and unlicensed bands as such, there are many considerations before the spectrum management authority can decide to de-license them. The government could de-license the 5GHz band only for indoor use, because there were some existing users and it was difficult to shift them away from that band. The outdoor usage by the public cannot be allowed, because it will cause interference to those existing users as well as the public will get interference from them if they use it in the outdoors. That is why it could not be de-licensed for outdoor use. Only a small, 50 MHz portion (5825 to 5875MHz) could be de-licensed for outdoor use, but in the 2.4 GHz band the existing users were able to shift out of that band so it could be de-licensed for the outdoor use also.

There is also another important aspect which you have to keep in view while de-licensing any band: though the public requirement will be there, vendors naturally, you will agree, try to force the issue because they develop some equipment and they want to sell it. Now you would have seen that spectrum is a very valuable commodity, it’s a resource, a very valuable resource and billions of dollars have been spent by the operators to get the spectrum. On the one hand one operator is spending billions of dollars, on the other hand, another operator is using de-licensed spectrum providing the commercial services. There is a big gap as you can see. So when the government de-licenses any spectrum, the idea is that the public will use it for personal use. The intention is not to de-license it for the commercial use, because commercial usages will continue to grow, continue to increase. Today if you de-license 100 MHz, tomorrow requirements will grow and they will say that they need another 100 MHz, and after another few years they will ask for another 100 – 200 MHz. Hence the de-licensing requirements will never end. So this creates quite a difficult situation with respect to other commercial operators who have paid for this spectrum.

Yelena: That’s definitely something to keep in mind.

P. K. Garg: Yes. Even now, for example – some of these Internet service providers, they are using this 2.4 GHz band. Now this 2.4GHz de-licensed band which they are using, they are using quite extensively. As a result, the availability of this band for the public gets restricted. If members of the public want to use it they will get interference and if WiFi modems find one channel busy, they will find another channel, and if they find that channel busy too, then they will go to the third channel. Thus the number of channels which are available to the public will continue to decrease.

Yelena: So by the public you mean community projects or individuals?

P. K. Garg: Yes. For example – you and me– if we are to use a WiFi modem at home and if we find because of other commercial usages around our houses that we are not able to function, that means the benefit of that unlicensed band is lost for us.

Yelena: And there is no way to regulate so that the public gets more access?

P. K. Garg: No, because once the spectrum management authority de-licenses any band it sets certain parameters – how much power, what is the bandwidth of each channel, etc. Beyond that it will not control it. Only if somebody is using a higher power than what is allowed, it can be checked and then the person can be penalized. But whether it is for commercial use, personal use, or community use is a very grey area. It is difficult for the government to control this, requires a long litigation process and other interventions.

Yelena: That is certainly understandable. However, I’m looking into how unlicensed spectrum can be used for public good. There are projects that provide cost-effective wireless communication networks in remote areas, such as the Dharamsala wireless community network project set up by AirJaldi, or networks set up by the Digital Empowerment Foundation. So, our advocacy for de-licensed spectrum is to benefit such projects.

P. K. Garg: Basically you are right. For example – if you see now for the indoor use, almost 250MHz of spectrum in 2.4GHz and 5GHz band is available unlicensed. I would say even close to 300MHz is available. And out of this 300MHz almost 150MHz is available for outdoor use also. Now if any community wireless network or a city-wide network operating on WiFi is to be created, 150MHz is more than enough if it is used judiciously. However, supposing I am an operator and I started using the unlicensed spectrum for giving services to my customers throughout the city, and their data and the total time requirements are quite extensive, then what will happen is that it will either reduce the availability of spectrum to other users or it will become totally unavailable to them. So the basic purpose of de-licensing is defeated then.

Yelena: That makes sense. During my interviews with several other experts who are really strong advocates of unlicensed spectrum, it was stated that a solution to de-licensed spectrum being clogged is to de-license more spectrum. Considering what you mentioned, why are they still advocating for this?

P. K. Garg: Well, as I was mentioning to you, unfortunately many of these people are not fully aware of the ground realities of the situation. Now no part of spectrum is completely virgin. If somebody says today it is a question of 100GHz band to be de-licensed that is a different issue. But for the 100GHz band there are no devices available today and no usage. But if we come to the band anywhere below 10GHz, all the bands are used by somebody or the other. So before de-licensing, one has to shift those users and shifting anybody is not easy. Which band will the government shift them to?

Yelena: That is definitely something to consider.

P. K. Garg: The government will have to give them alternate bands; where will they provide them from when all the bands are in use? So the proponents of de-licensing sometime are not able to appreciate the full gravity of the situation. And another thing is that the government cannot be regulating whether it is a commercial use/private use or societal use. And many of the problems in the existing unlicensed bands have come up because they are really used more and more for commercial purposes. That is the unfortunate part of it. Otherwise 2.4GHz and 5GHz bands themselves are quite adequate to serve the societal requirements. Tomorrow, the ultra wide band systems are coming. The requirements will be there, but they will be operating in higher bands and they will be confined to very small areas; even home, even your office. So they can be tackled by indoor de-licensing.

Yelena: And this is according to the 2011 National Frequency Allocation Plan?

P. K. Garg: Well, the National Frequency Allocation Plan doesn’t talk of any additional de-licensed bands but they will consider it. However that will be for indoor, very low power applications. As I mentioned to you for indoor usage it is almost like 300 or 350MHz which is available; for outdoors it is only 150MHz which is available. So for indoor it is already 200MHz of additional frequencies which are available as unlicensed. And if all these bands are put to proper use it can very easily allow even up to 100Mbps indoor usage for every house. There shouldn’t be much of a difficulty. One is that all this indoor usages are not continuous; this 100Mbps is not 24/7 because there are short spurts usages over a few milliseconds, then there is a gap and all these WiFi modems and other devices make use of the dynamic situation, so they are able to coexist. Even if I am using it here and somebody else is using it at the other end of the room in this large hall it is possible to coexist. And certainly if it is the next house or the next building the same frequencies can be used; they will be reused. So the solution lies in the greater reuse of the same spectrum; whether you call it reuse or you call it sharing, it’s the same thing. So one has to share the spectrum; reuse the spectrum.

Yelena: Great. Thank you for your time and for sharing your expertise.

[1]. Indian Telecom Sector. (2010). Government of India Department of Telecommunications. Retrieved March 11, 2012, from www.dot.gov.in/osp/Brochure/Brochure.htm.

For more details visit https://cis-india.org/telecom/interview-with-garg

The 2G Supreme Court Judgment

Shyam Ponappa — 2012-03-13T08:21:49Z

The Business Standard published Shyam Ponappa's two-part article deconstructing the assumptions in the Supreme Court's 2G judgment, and suggesting possible ways forward. The first one was published on March 1, 2012, and the second on March 4, 2012.

The 2G Supreme Court Judgment - 1

Time for a review [Flawed assumptions: auctions]

The judgment cancelling 2G licences was based on demonstrably incorrect assumptions about auctions, writes Shyam Ponappa in an article published in the Business Standard on March 1, 2012. This first of two articles starts out with identifying the false premises of the judgment, particularly relating to the consequences of auctions.

The Supreme Court judgment of February 2, 2012, cancelling 122 2G licences needs a detailed review. This is because it is based on faulty premises relating to economics, finance and technology. If the Supreme Court entertains review petitions on this judgment, it is imperative that the judges be aware of these false premises, and that they be correctly informed regarding these issues. This article gives a few instances of such errors and explores the logic of auctions.

First, as an example of an error, the judgment states, “Spectrum has been internationally accepted as a … renewable natural resource which is susceptible to degradation in case of inefficient utilisation.”

The fact is that spectrum is not renewable, nor is it degraded. Spectrum is completely unaffected by use, unlike the degradation of land or water through use. However, use of a particular range of frequencies in a given space and time can block another user’s effective access to the same spectrum in that space and time — hence the need for considering efficient societal use.

Second, the judgment states that “the Government of India has already taken a decision to ... allot the same [spectrum] by auction”, quoting Telecom Minister Kapil Sibal. The fact is that the government had not announced such a policy decision before the judgment.

Third, the judgment prescribes auctions as being in the public interest. Are they?

The assumption that auctions are in the public interest warrants a detailed review. Amidst a cacophony of confused opinion based on little knowledge and less understanding, here is the evidence:

a) Maximum public revenues: auctions or revenue share?

Assume for a moment that public revenues are indeed the appropriate measure in the public interest. What does the evidence show? An estimate from the Telecom Regulatory Authority of India (TRAI) in 2005, of auction fees foregone after the transition to revenue-sharing, was Rs 19,314 crore from March 1999 to March 2007. In fact, actual revenue-share collections by March 2007 amounted to double that number, or Rs 40,000 crore. Further, the amount collected by March 2010 was Rs 80,000 crore.

Sources: Auctions - TRAI, 2005:
http://www.trai.gov.in/trai/upload/StudyPapers/2/ir30june.pdf
Revenue Share: CAG, 2010: http://cag.gov.in/html/reports/civil/2010-11_19PA/Telecommunication%20Report.pdf

These data demonstrate that over seven and 10 years, revenue-share collections far exceeded auction fees foregone. Over the entire life-cycle (20 years or more with extensions?), the revenue-share collections will overwhelm even the Comptroller and Auditor General’s (CAG’s) imaginary lost revenues.

b) Public interest: revenues, or access and usage?

What is really in the public interest — revenue collections or the benefits of usage? The CAG report and the clamour for auctions assume that revenue collections reflect the public interest. However, the draft National Telecom Policy 2011 (NTP-2011) states as its first objective: “Provide high quality, affordable and secure telecommunication services to all citizens.” It states that revenue generation will be secondary.

In other words, the policy objective is to provide the benefits of accessible, affordable services to users, not to maximise revenues collected. This was the first time the government unequivocally stated an objective that appeared emphatically in the public interest. The Supreme Court has thus far seen it differently, although this has nothing to do with upholding the law.

The confusion is made worse because the preponderance of literature is by “auction experts” focusing on high fees — and not at all on the services that should have followed but didn’t, because the capital went into the auctions instead of building service capability. A notable exception is a more balanced study of spectrum auctions worldwide that considers social gains as well as fees — which estimates social gains at an overwhelming 240:1 (“What really matters in spectrum allocation design”, Thomas W Hazlett and Roberto E Munoz, April 9, 2010: http://ideas.repec.org/p/reg/wpaper/372.html).

c) Are auctions in the public interest?

There was one successful auction in India in 2001 – because the market was dead – for a fourth mobile operator per circle. Other auctions in India and abroad resulted in the failure of network rollout and services, but were hailed as successes because of high auction fees. For cases of “operation successful, but patient dead”, read on.

Auction failures

US, 1994: The first US auction netted huge bids. Soon after, a number of “successful” bidders declared bankruptcy. This was repeated in the 1995-1996 “C”-Block auctions.

India, 1994: This auction in 1994 was followed by chaos from overbidding and default. The sector recovered only after many years, when the bids were set aside in favour of revenue-sharing with NTP-99. It took almost a decade before a reduction in revenue share (lower fees) and tariffs (calling party pays) led to explosive growth in mobile telephony from mid-2003.
UK, 2000/European Union, 2001 (3G): Considered a spectacular success, netting about $35 billion in the UK, followed by high bids in Austria, Germany and Italy that netted over $100 billion, these auctions raised about ten times the amount expected. The markets collapsed thereafter, and the bidders couldn’t service the debts incurred. Companies have taken a decade to recover, moving cautiously even now on 4G.
India, 2010 (3G and broadband wireless access): Hailed as a success, with over Rs 1,00,000 crore bid, lacklustre performance has followed, as companies struggle with the “winner’s curse” of paying too much to corner spectrum.

Auction experts have written disparagingly of “failures” (low fees) in countries like the Netherlands, Switzerland, Sweden, and non-auction countries like South Korea, Japan and Finland (until 2009). However, these disparaged countries have the best broadband services, according to a 2010 study by Saïd Business School at Oxford (http://www.sbs.ox.ac.uk/newsandevents/releases/PublishingImages/3 - Broadband quality ranking - by economic development.jpg). That is not surprising, considering that the capital was invested in service delivery, instead of in vying for spectrum.

Read the original from the Business Standard

The 2G Supreme Court Judgment - 2

Open access is the future [Flawed assumptions re technology; way forward?]

This article addresses erroneous technological assumptions, and explores possible ways forward.

The first part of this article (‘Time for a review’, BS, March 1) dealt with erroneous assumptions, especially regarding auctions. This part covers misplaced assumptions about technology, and explores constructive alternatives going forward.

Errors in technical assumptions
An assumption underlying the prescription of auctions is that spectrum must be assigned to operators for their exclusive use. This was how wireless evolved during the first half of the 20th century, when radio frequency interference was the predominant problem in wireless communications.

With developments in technology, some advocate open spectrum predicated on the use of “cognitive radio” or “software-defined radio”, by which user equipment avoids interference by sensing unused channels automatically. In this model, open-access spectrum is a commons.

Another approach is to use a database-driven open-access model, whereby devices register with a database, and are dynamically assigned spectrum as needed. If this were possible in 1959, when Ronald Coase first recommended auctions, it would not have been necessary to parcel out spectrum. Even in America’s developed economy, the first auction was in 1994, and it failed.[1]

Now, technological developments enable spectrum sharing and dynamic assignment. America’s FCC has appointed 10 database administrators for dynamic spectrum allocation, with Spectrum Bridge being the first — in operation from January 2012.

America restricts this approach to unused spectrum in the TV bands, and a portion of the 700 MHz band, called “TV white spaces” (TVWS). The UK’s Ofcom is taking similar steps, with implementation planned for 2013. While all licensed frequencies could be pooled, sharing is restricted to TVWS because of conventions and legacies, and operators’ and governments’ preference for auctions. This judgment rules out sharing, blocking other technologies if the spectrum were available.[1]

The lure of auctions

For markets like India, there is every reason from a technology perspective to share not only TVWS and 700 MHz, but all commercially licensed spectrum. There is a technological basis for pooled spectrum, without exclusive assignment and auctions. Yet people love auctions: liberals, because business must pay its way, and governments get revenues; conservatives, because market mechanisms substitute for government controls.[2] Operators prefer exclusive assignment to the uncertainties of open access and compensation for their holdings. Governments want auction revenues. So neither governments, nor big operators, nor the uninformed public, see incentives for pursuing what is in the public interest: shared spectrum.

For Technology leaders in OECD markets, shared spectrum was not a priority, because more spectrum was available to fewer operators. For instance, in 2010, operators in many US cities had 55-90 MHz according to gigaom.com, and AT&T was using only about half its available spectrum, whereas in Delhi and Mumbai, operators had only 10 MHz.

First-come-first-served

Can the FCFS policy be abrogated on the basis of unconstitutionality? If so, the induced turmoil and far-reaching changes in procedures required for everything from tickets for railways or airlines, state-owned assets such as land, mining concessions, even government housing (including for judges?!), and all previous licences granted by FCFS procedures, defy imagination. This urgently needs review by the Supreme Court in the public interest.

Irregularities, outcomes, contracts and cancellation

The same 11 companies whose licences were cancelled qualified according to the FCFS principle, except that their sequence was changed, apparently through procedural irregularities. In other words, without malfeasance, the same companies would have got the licences, except for S Tel getting Delhi and someone else not. Malfeasance deserves penalisation. However, as changes resulting from irregularities are limited in the sense that the same candidates would have won, must all licences be cancelled? Is there a judicial option of annulling the award, and placing the issue before the executive for equitable resolution in the public interest? After all, it is against the public interest to induce turmoil in markets and development capabilities, which the present ruling is likely to do not only in telecom, but in other sectors like energy, mining, manufacturing and transportation. Also, if foreign companies acquired legitimate stakes in licence holders, can these contracts be nullified without proof of their malfeasance? Or could erring parties be penalised, while legitimate parties are enabled to reconstitute their position as required by law?

The way forward
Unfortunately, it is for our discredited and dispirited government to pick itself up and dig us out of this hole. Focused, goal-oriented action on the following lines would help.

First, review petitions: A first step is structured review petitions to the Supreme Court seeking relief, without grandstanding, bluster, or abdication of responsibility.

Second, an alternative to spectrum auctions exists in open access with payment. Both public revenues as well as public usage can be well served by treating access to spectrum as an open-access right-of-way. India’s policy makers need to consider the US and the UK’s shared spectrum approach. Spectrum can be paid for as it is used, as are oil pipelines, roads, or airports and ports.

Open access could create tremendous opportunities in India, including for other technologies, e.g., a revival of WiMAX, if Intel grasps the nettle.

Third, on the cancelled licences. This has different problem sets. One set comprises parties who abused the system, punishable under due process of law. If there are parties in a second set that did no wrong, they should suffer no penalty.

What of a subset of the first, in which a foreign partner invested legitimately and built out, provided they were within the law? If these investors acted in good faith, perhaps a legal recourse could be to place their cases before the government for resolution and rehabilitation in the public interest conforming with the laws, if need be by a dispensation from the court, or even by fresh legislation. After all, good faith investors have contractual rights. Possible solutions might be (a) to penalise the guilty partner, while absolving the innocent, or (b) cancelling the licences of the guilty, while allowing the innocent to reconstitute as required by the law.

Above all, there is need for problem-solving that is systematic, transparent and participative, with expert inputs in domains and processes, to place the sector on a firm footing.

Read the original published in the Business Standard

[1].http://www.benkler.org/Open_Wireless_V_Licensed_Spectrum_Market_Adoption_current.pdf

[2].Paraphrasing Eli Noam: http://www.citi.columbia.edu/elinoam/articles/beyond_auctions.htm

[3].For details, see: http://organizing india.blogspot.com/2011/06/ntp-2011-objective-broadband.html

For more details visit https://cis-india.org/telecom/2-g-supreme-court-judgement-1

An Interview with Stephen Song

Yelena Gyulkhandanyan — 2012-02-29T14:08:54Z

Stephen Song, the founder of Village Telco, an initiative to bring practical and inexpensive communication network infrastructure to rural and remote areas, speaks about factors that catalyzed the initiative, the benefits of the network, some challenges, and the Mesh Potato.

Yelena Gyulkhandanyan: When and how did the Mesh Potato come about?

Stephen Song: It came about after I joined the Shuttleworth foundation in 2008. I was aware of the potential of low cost wireless mesh technologies to create affordable infrastructure, but there seemed to be a challenge in getting these technologies to scale, and we had done some interesting pilot work, but nothing had really taken off. And so I convened a workshop in the middle of 2008 with some of the smartest wireless networking people I knew and so began to explore what were the key barriers.

There seemed to be at least a couple of key barriers – one was that setting up a wireless mesh network was a complex procedure that required expertise. And second was that in many areas where we were interested in providing services, people were as interested in voice services as they were in data. Simply delivering data to a particular community, at least to rural communities anyway, seemed to be only solving half of the problem. So the result of that workshop was that we came to the realization, the conclusion, that what we needed was a hybrid of technologies, something that didn’t exist yet, which was a combination of voice and data technologies together.

We were lucky enough to have a brilliant open hardware designer from Australia attending the workshop almost by coincidence, and he said, “Well, why don’t we build our own?” Up until that point I think our dominant way of looking at the world was by asking what sort of North American or European technologies could we take and repurpose in Sub-Saharan Africa to address this issue of access in a more affordable way. The notion of actually manufacturing our own technology wasn’t on the chart at all and it took a little while for the idea to sink in, because it just seemed infeasible at the time. But sink in it did, which led through my fellowship at the Shuttleworth foundation to the funding of a pilot project to see whether it was feasible to complete at least a prototype design. The created prototype design led to a partnership with the manufacturer in Shenzhen, China, and to a short run of production which led to a bigger run of production. And so one thing led to another and now we have our own device that we manufacture.

Yelena Gyulkhandanyan: And how would you describe this device to a regular consumer?

Stephen Song: Well, it is a wireless networking device that works with similar units of its kind to form an autonomous wireless network that delivers voice and data services. So you can open a box of Mesh Potatoes, plug them all in, and instantly have a voice and data network. It is a network for which you don’t require a special voice technology. All you need to do to be able to start making calls is to plug in an ordinary phone into the Mesh Potato. So it doesn’t require any sort of additional smart VOIP hand set technology or anything like that. We deliberately chose to do that because analog handsets are very cheap and lots of people have them already or they cost less than $10 to buy. So it seemed like a very affordable way of creating a voice network.

Yelena Gyulkhandanyan: And how much does a Mesh Potato cost?

Stephen Song: They are about a $100 each.

Yelena Gyulkhandanyan: And how much does it cost to set up a network and what is the largest distance that it can cover?

Stephen Song: The cost of the network is literally just the cost of the Mesh Potatoes and so once you have them and they are powered up, you have network infrastructure that is yours for as long as the technology lasts, which should be many years. So that’s really the core cost; it’s just the cost of the devices. Then if you connect your network to the Internet or to the public switched telephone network you might have to pay for the access to the Internet or for access to voice services.

Each Mesh Potato has a range of about three to four hundred meters but the way the Mesh Potatoes work is each device acts as a repeater for the next one. So as long as the next house that you can see is less than three to four hundred meters away, you can actually build quite a large network, because if you have two houses that are six or seven hundred meters away, as long as you have one house in the middle that’s got a Mesh Potato, then all three of them are connected. Mesh networking has been around for a while but just hasn’t become as mainstream as WiFi hotspots.

Yelena Gyulkhandanyan: And in what frequency range does this technology operate in?

Stephen Song: It works in the 2.4GHz range which is your standard WiFi technology, which means that for most countries you can use it without requiring a spectrum license.

Yelena Gyulkhandanyan: So in what countries, other than South Africa, has this technology been deployed in?

Stephen Song: Our biggest network is in the capital of East Timor in Dili. There is an NGO there called FONGTIL that has set up a large Village Telco network and there are a number of other smaller networks – one in Brazil, some networks in Nigeria and Cameroon, and then multiple other smaller more informal networks as opposed to formal Village Telcos.

Yelena Gyulkhandanyan: Have there been barriers in terms of deploying this technology?

Stephen Song: A barrier for us is bringing the cost of manufacture down. So one of the downsides of being a very small organization is that in terms of negotiating with manufacturers and arranging deals we have very little leverage. So we will want to bring the cost of the Mesh Potatoes down by another 50 percent, which is completely feasible, but it’s a challenge to actually build the relationships with the manufacturers to get things done quickly.

Yelena Gyulkhandanyan: So what company currently manufactures this technology?

Stephen Song: A company called Atcom.

Yelena Gyulkhandanyan: Can you provide a successful case study of this technology being deployed where it has made a difference in the village or where it helped create other social endeavors because people had access to this technology?

Stephen Song: Yeah, I think Dili in East Timor is probably the most successful example, in that the NGO that is running the network, FONGTIL, is kind of an umbrella organization for other NGOs in the region that need to connect and talk to each other on a regular basis. However mobile communication is quite expensive in Dili. So the NGOs have really valued being able to communicate easily and cheaply with their partner organizations through the Mesh Potato network.

Yelena Gyulkhandanyan: Sounds good. Thank you very much for your time.

Stephen Song: All right, bye for now.

For more details visit https://cis-india.org/telecom/interview-with-stephen-song

Content Developers/Trainers

praskrishna — 2012-02-29T13:42:51Z

The Centre for Internet and Society is hiring for the full-time position of a content developer/trainer to work on an upcoming project Building Knowledge and Capacity around Telecommunication Policies in India.

The objective is to create an on line repository of telecommunication-related information and learning materials targeted at a multi stakeholder audience; organise interactive public lectures and workshops around the country to disseminate awareness on telecom issues; as well as use traditional and new forms of media to impart information to academia, civil society, policy makers and the general public.

Candidates do not need to have a technical background or be experts in the field of telecommunication; however, some experience/interest in telecom related issues is needed.

Other requirements are:

Excellent analytical and writing skills
Visualization skills
Good communication, presentation and training skills
Basic computer skills

To apply, please send your CV and three examples of writing to yelena@cis-india.org

CIS is committed to equitable employment and is encouraging female job candidates. Please refer to the above e-mail address for further inquiries.

For more details visit https://cis-india.org/news/content-developers-trainers

Govt set to gain ‘back-door’ access to corporate email

praskrishna — 2012-02-14T12:55:53Z

The government is just a step away from gaining access to RIM’s widely used BlackBerry Messenger (BBM) service, writes Shauvik Ghosh in an article published in LiveMint on 14 February 2012.

In a move that may raise serious questions regarding the privacy of corporate emails exchanged between individuals and employees, the Indian government is all set to gain “back-door” access to emails sent and received over Research In Motion Ltd’s (RIM) BlackBerry Enterprise Server (BES) within the next two-three months.

“There was a meeting last month with DoT (department of telecommunications) on the issue and the concerned security agencies and some home ministry officials,” a senior DoT official said requesting anonymity. “DoT has to furnish a list of enterprises from whom the key has to be acquired.”

The number of such firms is contained in an internal DoT note that was reviewed by Mint.

“There are about 5,000 enterprises using BES in India,” the note said. “These are communications between the employees of the enterprise only and therefore are not of high concern for security or intelligence agencies.”

However, the capability of using the key to access the communications when needed is still being developed.

Meanwhile, the government is just a step away from gaining access to RIM’s widely used BlackBerry Messenger (BBM) service.

“RIM has set up the necessary infrastructure in Mumbai to enable real-time access to BBM, as they had said they would,” said the official cited above. “They had provided for interception via the telecom service providers, but the intelligence agencies wanted direct access and so a server has been set up in Mumbai.”

The note said: “The company had installed the server in Mumbai. This has been inspected by a team of officers and permission for direct linkage for lawful interception was expected to be issued shortly.”

The move has raised red flags among privacy advocates over the motives of the government.

“There is no reason given by them on why they need to do this. There are no allegations of terrorists using BES or any indication that any of the 5,000 enterprises have any links to terrorists or other banned outfits in India,” said Pranesh Prakash, programme manager with digital media watchdog Centre for Internet and Society. “What is worrisome is that it is mainly commercial information that is shared on BES and in a large number of cases, this includes dealings with the government of India that they should not be privy to—things like auction bids, etc.”

Such powers can’t be used to pursue offences of financial nature, he said. “There cannot be economic reasons like tax evasion and such for intercepting such communications as the agencies that look into such offences are not authorized to or do not qualify to tap phones, etc.,” Prakash added.

On being asked about the development, an RIM spokesperson responded by citing the company’s January statement. This said RIM had provided a solution that enables India’s wireless carriers to address lawful access requirements for consumer messaging services, which include BBM and BlackBerry Internet Service email.

“The lawful access capability now available to RIM’s carrier partners meets the standard required by the government of India for all consumer messaging services offered in the Indian marketplace,” the company said in that note. “While the details of our regulatory discussions with the government of India remain confidential, we have been assured that all of RIM’s competitors must provide a lawful access capability to this same standard if they have not done so already.”

Mint reported last month that in order to prevent leakage of information, the government was proposing a legal provision, referred to as mandated local server hosting. This would put the onus on companies such as Skype and Google to locate the relevant part of their infrastructure within the country to allow investigative agencies ready access to encrypted communications on their servers.

Apart from leakage of data, the move is also expected to serve security interests and enable law enforcement agencies gain real-time access to information stored on servers and resolve jurisdictional ambiguity.

The original article was published in Livemint. Pranesh Prakash has been quoted in it.

For more details visit https://cis-india.org/news/govt-set-to-gain-2018back-door2019-access-to-corporate-email

Reversing India's Downward Trajectory

Shyam Ponappa — 2012-03-01T05:30:58Z

The country can regain growth momentum with rate cuts and telecom reforms, writes Shyam Ponappa in this column published in the Business Standard on 5 January 2012.

The welter of confusing pulls and pushes on India’s political economy makes finding the way forward really difficult. The government apparently cannot sustain economic reform initiatives, and does not have the finances for a stimulus package. The private sector is sitting on cash, but cannot invest because it is facing slowing growth and reducing margins. Known problem areas in infrastructure cannot absorb investment despite critical shortages in output — power generation and distribution is an example. Is there really nothing that can be done but to wait and watch while everything slowly grinds down?

The circumstances are formidable: a cantankerous Opposition using scorched-earth tactics, an anarchic citizenry usurping law-making functions after the abdication by the government and the Opposition, and an administration stupefied by the CAG phantom and other witch-hunts, with media Rottweilers searching through the carnage for the scandal-of-the-day.

This article identifies critical factors at the heart of the matter, and suggests remedial action. Slowing growth is the primary problem, and can be reversed without political manoeuvring.

The Crux: Reverse Slowing Growth

Some underlying factors that drive everything else need to be recognised and dealt with. For India at this stage, growth is all-important. This is the issue to be recognised and addressed.

The slowdown is largely self-inflicted, by escalating interest rates in a misguided effort to counter inflation. Yes, there are many other problems, but unless we have high growth for years together, other problems will swamp not only the analysis, but all efforts at execution. The consequences could be devastating — not only because of the large numbers of people who are not adequately housed and fed, but because a flood of young people entering what could be a productive workforce may end up on the streets instead.

There are two aspects to India’s growth. The largest component (growth of six to seven per cent) is driven by domestic demand. On top of that, foreign investment can add one to three per cent, to take annual GDP growth to eight to nine per cent, or perhaps even more. One can quibble, but the relative proportions are from two-to-one to four-to-one. It needs to be understood, however, that the incremental growth is driven by foreign investment, which is attracted by existing growth, and builds on it. Absent domestic growth, foreign investment dries up; worse, it flows out when growth is seen to be decelerating. This in turn increases downward pressure on the rupee.

This is the situation we have been heading towards, and are now squarely in. If domestic growth continues to stall, an outflow of foreign portfolio investments could put more pressure on the rupee. Domestic growth, therefore, has to be revived. Immediate steps are possible in two areas.

Lower Interest Rates

The Reserve Bank of India (RBI) does not need the approval of our contentious politics, nor of the public. All it needs is the understanding and willingness to reduce interest rates. If this happens, large businesses can concentrate on domestic investment instead of being driven offshore to protect their future, while small and medium businesses are not emasculated by high interest. It’s hard enough dealing with poor productivity because of a lack of physical infrastructure. High interest rates – factors within the nation’s control, with no political headwinds – are the last straw.

Academics and theoreticians may argue that with inflation being high, real interest rates are only around three to four per cent, but anyone who has run a profit centre or dealt with practical finance knows that these arguments don’t hold. When margins are dropping and interest costs are high, businesses run down, reinforcing the downward momentum.

In this context, a recent article on these pages by Jaimini Bhagwati highlights an enduring problem: central banks’ lack of accountability (“How unaccountable are central banks?”, Business Standard, December 16: http://www.business-standard.com/india /news/jaimini-bhagwati-how-unaccountablecentral-banks/458599/). It’s as though central bankers play to their own coterie of other central bankers, holding tight while the ships go down. If you need convincing, consider Alan Greenspan’s assessment: “…the origination of subprime mortgages – as opposed to the rise in global demand for securitised subprime-mortgage interests – was not a significant cause of the financial crisis.” Collateralised debt obligations indeed triggered the crisis, but there can be little doubt that loans premised on mansions for everyone lead to disaster, like any pyramid scheme.

As for the RBI’s accountability, the “presumptive loss” from the reduced GDP because of interest rate increases could be two to three per cent a year. One per cent is around Rs 92,000 crore, making three per cent Rs 2,76,000 crore.

Telecom Reforms

Positive sentiments can and must be triggered by constructive reform in telecom, through extending the revenue-sharing approach to pay-for-use spectrum and network sharing. This, too, needs more applied logic and problem solving expertise rather than political finesse.

After an encouraging Draft National Telecom Policy-2011 (NTP-2011) last year, there are unsettling signs. One is recurring delays, with a new policy expected in June 2012.

Second, there’s the confusing juxtaposition of spectrum sharing in the draft policy with recent statements about more auctions. The draft policy mentions spectrum trading for “efficient and optimal utilisation”, but if spectrum sharing results in both, presumably the need for trading will arise only for holders to get the assets off their books. The realpolitik is that dominant operators want auctions to corner scarce spectrum for their exclusive use, while the others want auctions for a lucrative sell-out. But this ignores the public interest, comprising users who want good, affordable broadband services, and defence, security, and other government needs that are in our collective interests.

The government has a unique opportunity to clear up India’s telecom policies, although precipitated ignominiously by the scams. Now, the government must grasp the nettle by extending the revenue-sharing principle of NTP-99 through open access to spectrum and networks. Other necessary elements include:

compensation for dominant players for giving up their advantage, with
stakes in appropriately structured consortiums for Next Generation Networks, and
incentives for affordable broadband delivery.

Interest rates can be cut tomorrow. A sound telecom policy on the above lines could be formulated by June.

Read the original published in the Business Standard

For more details visit https://cis-india.org/telecom/reversing-downward-trajectory

Inputs for NTP 2011

praskrishna — 2012-01-02T05:07:57Z

The Centre for Internet and Society wishes to commend the DoT on the draft of the New Telecom Policy and offers its suggestions to improve the draft with specific changes.

The new draft contains several noteworthy initiatives and goals such as Delicensing additional frequency bands for public use, Network sharing, spectrum sharing, pooling and trading , recognizing that revenue generation is not the primary reason for licensing spectrum and that auctions often result in inordinate delays, identifying the mobile phone as a primary instrument for development and inclusion, Convergence of broadcast, telecom and cable infrastructure, promotion of cloud based technologies, Nationwide license, free roaming and one number, promotion of fixed mobile convergence to free up spectrum, promoting consumer interests by increasing choice and quality and addressing concerns of privacy, data security, etc and placing emphasis on research and development, awareness raising and capacity building.

We offer below suggestions to improve the draft with specific changes marked in bold print.

Spectrum Management

We endorse the approach to permit spectrum ‘pooling, sharing and later, trading for optimal and efficient utilization of spectrum’ as described in 4.1. In this regard, we would like to suggest that the Government may consider mandatory spectrum sharing as is being done in USA with respect to white spaces and digital dividends as a better approach over licensing spectrum to a single operator and allowing voluntary sharing since it could result in more dynamic and efficient use of spectrum with access being authorized as per requirement from a central data base driven system.

De-licensing additional spectrum

We agree with the approach to prioritise identification of additional frequency bands for license exempt use for the operation of low power devices, as stated in section 4.6 of the National Telecom Policy 2011. We also support the promotion of the use of technology such as Software Defined Radios (SDRs) and Cognitive Radios (CRs) in white spaces, as mention in section 4.9 of the NTP. These developments in the Indian Telecom policy show promise for the deployment and spread of affordable technologies operating in de-licensed frequencies, which will contribute to the bridging of the digital divide present in India. We offer certain recommendations in this regard:

WPC should have more unlicensed bands available for internet and multimedia to fuelinnovation and efficient spectrum utilization. Unlicensed bands need to be allocated inbigger chunks in various slots.
Frequencies in the 5.15GHz-5.35GHz bands, as well as 5.725-5.825GHz bands are delicensedfor indoor use only. These bands should be de-licensed for outdoor use as well in order to facilitate the creation of wider wireless communication networks and the use ofinnovative technologies.
Bands for the use of DECT technologies have already been de-licensed in Europe and theUnited states. The1800-1890MHz band, which is earmarked for the operations of DECT based devices in India, should be de-licensed for the use of low power cordless communication technologies in line with international practices.
The 433-434 Mhz band should be unlicensed for data telemetry as it is done in many other countries.
Unutilized slots in between TV channels (white spaces) should be made available for unlicensed/Class license usage.

Licensing, Convergence and Value Added Services

With respect to allowing the sharing of network mentioned in 3.6, we would like to propose a similar model as suggested for spectrum sharing, which is more along the lines of Singapore or Australia’s NGN, with the network(s) being run by public private partnership (PPP) consortiums, but led by a private operator.

Accessibility for Persons with Disabilities

Persons with disabilities should be mentioned specifically within the policy and steps should be taken to enable access to telecommunications facilities for them. These would include steps like formulating a Code of good practice for manufacturers and service providers, identifying accessibility standards in different areas, investing in R&D in accessible technologies, setting up a nationwide emergency and relay service, mandating broadcast accessibility to ensure that set-top boxes are accessible and that at least 50 per cent of all TV programmes are captioned, carrying out regular surveys to gather statistics on use of telecommunications services by persons with disabilities, etc.

Specific recommendations

Mission

(To be modified to read as)

1. To develop a robust, secure state-of-the-art telecommunication network providing seamless coverage with special focus on rural and remote areas and bridging digital divide amongst disadvantaged persons, including persons with disabilities.

Objectives

(To be modified to read as)

28. Protect consumer interest by promoting informed consent, transparency, accountability and accessibility in quality of service, tariff, usage etc. 36. Put in place an accessible web based, real time e-governance solution to support online submission of applications for all services of DoT and issuance of licences and clearances from DoT.

Universal Service Obligation Fund

To include ‘Persons with Disabilities, elderly and illiterate persons’ specifically as a category of beneficiaries within the charter of the fund. Telecom infrastructure/ row issues, green telecom, clear skyline,
(Point to be modified to read as)
5.13. To prescribe sectoral Standard Operating Procedures for effective and early mitigation during disasters and emergencies. To mandate Telecom Service Providers to provide alternative accessible reliable means of communication at the time of disaster by creating appropriate regulatory framework. 5.15. To facilitate an institutional framework to establish nationwide Unified Emergency Response Mechanism by providing nationwide single access number for emergency services and to ensure that the same are also accessible to persons with disabilities.

Broadband and universal service

Given that the uptake of broadband has been rather slow in comparison with mobile phones, a useful step to scaling up broadband penetration and providing ubiquitous broadband services could be to identify broadband as an ‘essential service’ under the Essential Services Maintenance Act, 1981. This could be recognized as an objective in the policy and will help to ensure provision of affordable and reliable provision of broadband.

Specific recommendation

(Point to be modified to read as)

3. Recognize broadband as an ‘essential service’ under the Essential Services Maintenance Act and provide affordable and reliable broadband on demand by the year 2015 and to achieve 175 million broadband connections by the year 2017 and 600 million by the year 2020 at minimum 2 Mbps download speed as well as making available higher speeds of at least 100 Mbps on demand.

Multi stakeholder approach

All activities such as setting up a council under 2.3, advisory groups in 2.4, 2.10, etc should necessarily include participation from civil society to ensure a balanced representation of the public interest perspective.

Specific recommendations

(Points to be modified to read as)

2.3. To set up a council consisting of experts from Telecom Service Providers, Telecom Manufacturing Industry, Government, civil society,

Academia and R&D institutions.

2.4. To promote synergy of academia, R&D centres, manufacturers, service providers, civil society, consumer groups and other stakeholders for achieving collaboration and reorientation of their efforts for creation of IPRs, development and deployment of new products and services suited to Indian environment.

Implementation and monitoring

While the policy identifies several laudable objectives and initiatives, there is little indication as to time lines and mechanisms for enforcement with measurable indicators. It would be useful to clearly specify these to ensure smooth and effective implementation of the policy.

Protection of consumer interests

Any initiatives taken in this regard, such as formulation of a Code etc, must necessarily involve consumers. The policy also needs to recognize that special effort is required to ensure that information is made available to consumers and more steps are taken towards consumer outreach. This also includes making web sites more user friendly and accessible to consumers. At present even the web sites of the DoT, USOF, and TRAI etc are extremely inaccessible.

Regulation

While it is important to create a conducive regulatory framework for India’s development agenda, we would nevertheless like to caution against over regulation, especially in cases where market forces themselves take care of the situation. It is best to have a light handed approach based on need. It is also suggested that a review of the TRAI act as proposed under 12.1 could result in vesting the sector regulator with greater autonomy and independence.

Specific recommendation

(Point to be modified to read as)
12.1. To review the TRAI Act with a view to addressing regulatory inadequacies/impediments in effective discharge of its functions and strengthening it by increasing its autonomy.

For more details visit https://cis-india.org/telecom/inputs-ntp-2011

Accessibility in the New Telecom Policy 2011

praskrishna — 2012-01-02T05:12:12Z

Responding to the call for comments on NTP 2011, 27 organisations sent a joint letter requesting that accessibility for persons with disabilities be included specifically within the goals and objectives of the policy. The submission is available here. It deals exclusively with the issue of accessibility in telecommunications for persons with disabilities, which has been left out of NTP 2011. We outline below in some detail the rationale for including accessibility in the NTP.

Demographic case

The ‘World Report on Disability’, issued in June 2011 by the World Health Organization in cooperation with the World Bank, estimates that over a billion of the world’s population lives with some form of disability.[1]

According to World Bank estimates, 20 per cent of the world's poorest people are disabled and are understood to be the most disadvantaged sections of society.[2] The global literacy rate for persons with disabilities was reported at approximately three per cent in 1998 by UNDP.[3]

Whether due to discrimination or an inability to work, the unemployment rate amongst the disabled is very high, almost 80 per cent in some countries. In India, while there are no accurate statistics on the number of disabled or their access to ICT, education and employment, it is commonly believed that the number of persons with disabilities can be safely estimated to be above 70 million. Added to this is a vast population of elderly and illiterate persons who are unable to access mainstream telecommunications services as are available today.

Legal case

India has signed and ratified the United Nations Convention on the Rights of Persons with Disabilities (UNCRPD) and is therefore obliged to ensure the human rights under the UNCRPD, including those of education, employment, to life and access to information and communication technologies and to treat persons with disabilities on an equal basis as others. Even under domestic law, our constitution recognises equality and non discrimination as important guiding principles and under the prevailing as well as new draft disability laws. We are committed to ensuring access to information, ICTs and all other aspects of social life which are essential to enjoy the right to life.

Global best practices:

Countries around the world, both developed as well as developing have recognised the important role that ICTs play in connecting the disabled, and also that special efforts and measures need to be taken to promote accessibility of and access to telecommunications facilities and services for persons with disabilities. For instance, Australia, Argentina, Brazil, Canada, Chile, France, Japan, Malaysia, South Africa, Sri Lanka, Sweden, USA, UK and many other countries in the European Union have at least one if not multiple policies and legislations to promote accessible telecommunications and these include both provisions in mainstream as well as exclusive policies. Similarly at least 17 countries around the world have specific provisions for connecting the disabled and providing services through their universal service funds. Many of these countries have included the aim of connecting the disabled as a goal in their national policies and then gone on to achieve this through specific policy initiatives. It is important to identify this as a national commitment within the policy to ensure adequate follow up.

Challenges to disability access to telecommunications in India:

Given below are a few key challenges impeding disability access to telecommunication and ICT services in India today:

Unaffordability of telecommunications products and services for persons with disabilities living below the poverty line and in rural areas.

Unavailability of compatible assistive technologies in local languages and at affordable rates.

Absence of special enabling measures such as provision of hearing aid compatible phones, priority assistance in repairs, low tariff on basic telephony services, accessible services and customer care,

Absence of a national relay service and emergency service system.

Unavailability of low cost handsets in the market which are compatible with assistive technology.

Failure of mainstream programmes and initiatives to reach out to persons with disabilities, for instance the Common Service Centres need to be made accessible to all.

Inaccessibility of broadcast services: includes inaccessibility of hardware like set top boxes which can at present not be navigated by blind persons, as well as inaccessibility of TV programmes because of lack of captioning and descriptions.

Recommendation

Given that there is a lot which needs to be done to connect persons with disabilities to the information society, we strongly urge the DoT to clearly identify this as a national goal under the policy. Without this, it will be difficult to ensure that adequate programmes and policies are created to make telecommunications accessible and universally available and persons with disabilities will be unable to enjoy even the basic rights of life such as the right to health care, to information, education, employment, recreation and many more. Finally we would also like to stress that mention of accessibility in NPIT and other policies alone will not suffice to ensure accessibility of telecom services. While those do govern accessibility of web sites, standards and content, the NTP will take care of accessibility of telecom services like broadband and fixed and mobile telephony, as well as of products. Given that today a large and ever increasing number of persons are relying solely on mobile phones to communicate and transact, creating an accessible
telecommunications environment becomes an inevitable priority goal.

Annexure – List of Signatories

Accessability (Delhi)
Alternative Law Forum (Bangalore)
Andhjan Kalyan Trust (Gujrat)
Arushi (Bhopal)
Blind Persons’ Association(Ahmedabad)
Blind Relief Association (Delhi)
Centre for Internet and Society(Bangalore)
Daisy Forum of India(Delhi)
Deafway(Delhi)
Deaf Mutes Society (Ahmedabad)
Dr. Amrik Singh Cheema Foundation Trusts(Chandigarh)
Fourthway Foundation (Bangalore)
Indian Association for the Blind(Madurai)
Indian Institute for Assistive Technology(Mumbai)
Maraa (Bangalore)
Mitra Jyothi (Bangalore)
National Association for the Blind(Mumbai)
National Association for the Deaf(Delhi)
Saksham(Delhi)
Samrita Trust(Secundrabad)
Score Foundation (Delhi)
Sightsavers International (Mumbai office)
Society for Visually Handicapped (West Bengal)
Sruti Disability Rights Centre (Kolkata)
Technical Training Institute(Pune)
Third Eye Charitable Trust(Chennai and Kolkata)
Xavier’s Resource Centre for the Visually Challenged (Mumbai)

[1]http://www.who.int/disabilities/world_report/2011/en/index.html
[2]http://www.un.org/disabilities/default.asp?id=18
[3]Ibid.

Click to download the file [PDF, 182 kb]

The submission was made to the Department of Telecommunications, Ministry of Communications & Information Technology, Government of India on 9 December 2011.

For more details visit https://cis-india.org/accessibility/accessibility-new-telecom-policy-2011

Healing self-inflicted wounds

Shyam Ponappa — 2011-12-05T09:10:20Z

A spate of dysfunctional actions and retrograde developments has led to an unimaginable mess for India. Can the damage to growth prospects be undone? Does it need to be? If so, how? Three areas are discussed below.

Some months ago, the spectre was of consoling ourselves with a reduction of two per cent in growth, from 9.5 to 7.5 per cent. That’s history. What looms ahead is a larger, more serious threat. This ominous tidal-wave-in-the-making comprises many separate currents converging to undermine India’s take-off yet again. The prospect is long-term growth hamstrung by policy stand-offs, foreign direct investment in retail being a case in point, and social tensions fuelled by high unemployment.

Those who think India has arrived should be aware that it will take another decade of eight to nine per cent growth to be able to fund reasonable basic infrastructure and necessities for everyone. Why should it matter if you live in a rich cocoon? At the very least, you’ll be able to go out without stepping into filth or smelling it, or seeing masses of people struggling to survive.

Instead of a high-growth trajectory, we may get six to seven per cent, with luck. These prospects are clouded by wasteful expenditure, such as the perpetuation of an ill-functioning public distribution system and its concomitant, ration-shop-mentality, instead of efficient direct retail subsidies through electronic transfers. The negativity is amplified by fractious social and political tensions, and shoddy infrastructure crippling productivity: power outages, low-speed communications and poor logistics. One can argue (ah, argument) that the tensions are justifiable as an antithesis to increasing levels of corruption from political, bureaucratic and corporate kleptocracy feeding off the land and people, or hardening sectarian interests competing for predatory control. But if there’s one thing we can learn from others’ experience, it is to work together for better outcomes, or suffer; in game theory parlance, collaborate to optimise, or settle for worse.

Undoing Sectarian Alignments

Undoing the fractious underpinnings of sectarian alignments of language, caste and religion is beyond the scope of this article. The unpleasant reality is that unless such structural social impediments are addressed, malfunctions will continue. So we have this reality where, at one level, India is wonderful in the way people stream and swirl together, and at another, it is horrible because our potential is not manifested in living standards, with people fed, clothed and housed properly, and clean streets.

To return to misapplied intelligence in the political economy, consider three areas: interest rates, airlines, and telecommunications.

Interest Rates

It seems only the Reserve Bank of India (RBI) was unaware that the consequences of interest rate hikes since February 2010 would (a) not control inflation (short of an economic collapse), and (b) lead to a severe curtailing of growth. To be fair, some economists aided and abetted with remarks that interest rates must be raised because of high inflation.

By contrast, the accompanying charts for China and Germany (euro zone) show their negative real interest rates.

What we have to do is reduce interest rates, with selective credit controls to ensure that credit for speculation is constrained and costs are high, e.g., in certain real estate, commodities, stocks and derivatives. Implementation, likewise, has to be “intelligent”, with online tracking by exception, and not cumbersome or voluminous weekly or fortnightly reports that are manually compiled and/or analysed, filtered and then presented to committees for decisions.

Airlines

The structural anomalies in India’s taxes on aviation turbine fuel (ATF) and airport charges defy logic. For a decade, there has been talk of cuts in central and state taxes on ATF, but the problems continue. Consider the missed opportunity: India has a large domestic market and is well positioned for airlines to use this for establishing global leadership, as well as ubiquitous domestic services. Instead, the sector is bled for short-term government revenues, giving foreign airlines the advantage. ATF charges in India for international flights cost 16 per cent more than they do abroad, and local airlines pay over 50 per cent more because of taxes and additional charges. Consider the ludicrous stipulation that foreign airlines cannot invest in India, and the irrationality defies imagination. Add the illogic of a government-funded, loss-making airline undercutting private airlines, and we have the mess we are in.

Globally, airlines suffer from gratuitous free-market philosophies, the exceptions being airlines from strategically focused countries, e.g., in West Asia, Southeast Asia (Singapore, Malaysia, Thailand) and, of course, China. Wake up! Surely no one doubts that aviation is an integral aspect of logistics and transportation? The government needs to recognise this and build capacity, with policies like uniform, low state taxes. Also, as in telecommunications, aviation requires an oligopolistic structure with limited competition, which if ignored brings chaos and grief, because nothing else is sustainable.

Telecom & Broadband

The draft National Telecom Policy 2011 promises good things. Yet, like India’s potential, the promise will be realised only with convergent action. This iconic sector, which changed the way the country functions and is perceived, is on the verge of being ruined by dysfunctional intervention. For instance, the regulator and the government seem bent on applying retrospective charges for “excess spectrum”, taking the bottom out of the market. Worse, 3G services are hamstrung by government attempts to restrict services, while operators threaten litigation. Meanwhile, the bastions of “free market”, the US and the UK, are initiating shared spectrum policies. What good are our brilliant objective statements about excellent, affordable services if the government acts to achieve the opposite? And is it beneficial for India to hound solid companies like Telenor and Qualcomm (unless they commit transgressions), instead of taking a problem-solving approach?

If the confused doublespeak – of punitive charges, restrictive practices, PSUs building state-of-the-art networks, auctions and spectrum sharing, all in the same breath – continues, we may lose a decade or more because of instability and irrational policies. It is time for decisions on pay-for-use, open-access spectrum and networks. Incumbent network companies can be compensated along a downward-sloping power curve to give up their competitive advantage. We must start being reasonable and do things that make sense.

This article by Shyam Ponappa was published in Business Standard on 1 December 2011. Read the article at Organizing India Blogspot

For more details visit https://cis-india.org/telecom/healing-self-inflicted-wounds