The Centre for Internet and Society
https://cis-india.org
These are the search results for the query, showing results 261 to 275.
The Right Ring Tone
https://cis-india.org/telecom/blog/ring-tone
<b>Focus on improving service quality with a strong partner, and not on one-shot stake sales, says Shyam Ponappa in his article published in the Business Standard on April 1, 2010.</b>
<p>Just five years ago, Bharat Sanchar Nigam Ltd (BSNL) was India’s second most profitable company, with net profit of nearly Rs 6,000 crore — nearly equal to Hindustan Unilever’s revenues — with over Rs 36,000 crore in revenues. By March 31, 2010, BSNL expects a big loss, while a competitor, Bharti, with revenues of only Rs 8,000 crore then, has caught up in revenues and is far more profitable. Mahaganar Telephone Nigam Ltd (MTNL), too, is struggling to stay profitable.</p>
<p>While these public sector giants are in a graveyard spiral, they still have valuable assets in their reach and their networks of hundreds of thousands of kilometres. They also have a corps of technical professionals, with unmet user needs burgeoning in cities, towns, and all over India’s hinterland.<br /><br />How can BSNL/MTNL be extricated from their predicament, and built up to become more like a State Bank of India, instead of a moribund Air India and the once-dominant Indian Airlines? Consider the present and future possibilities.<br /><br />The pertinent facts are:</p>
<ul><li>The network and capacity are valuable assets for operations, provided services are rationalised and extended in commercially sound ways.</li><li>Neither BSNL nor MTNL has been able to successfully capitalise on its headstart in WiMAX and 3G.</li><li>Given present trends, both will run up mounting losses.<br /></li></ul>
<p>All management and employees, including the Indian Telecom Service (ITS) officers, will have to engage in radical changes voluntarily. This is why all stakeholders, including the government, have to seek collaborative solutions, to resolve anachronistic legacy situations that cannot continue on terms as fair as possible, including a VRS, and possibly pay cuts for deferred profit-sharing. The alternative is losing a strategic backbone network-operating capability, something India needs, with the associated hardship for so many employees.</p>
<h3>Dire prospects</h3>
<p>The outlook for both BSNL and MTNL shows in their performance (Figures 1 and 2).<br /><br />For BSNL and MTNL, increased employee costs after the Pay Commission recommendations, together with declining fixed-line revenues, led to deteriorating profits. Meanwhile, years of stalled procurement, decreasing earnings and a recommendation to divest 30 per cent have all led to a stand-off at BSNL, with a threatened strike. Whether in public or private sector, there have to be good services with good profits; otherwise, competitors will devour them.</p>
<h3>Doing the unthinkable</h3>
<p>Are there ways out? Can these investments in equipment and people be resuscitated by some miracle of management and IT engineering to be at the heart of the country’s expanding communications services? Can their personnel pull together?<br /><br />That magic could come about if individuals and interest groups rise above themselves, avoiding opportunistic self-enrichment, and approach problems collaboratively instead of antagonistically, and if the government can abjure misguided fiscal zeal.</p>
<ul><li>Instead of divesting a stake as a one-shot, revenue-raising deal, induct a strong partner to build services and revenues.</li><li>Serve user needs, instead of offering “products” with some internal geographic or technological definitions that are not easily understood.</li><li>Rationalise services like EVDO cards (broadband data cards) that are not customer-centric, because if they work in the rest of the country, they don’t in Delhi and Mumbai, and vice versa.</li><li>BSNL and MTNL could go for collaborative data-streaming with 2.4 Mbps EVDO cards usable everywhere, offered with a service level and style that can only come with a hands-on partner changing the off-putting way BSNL and MTNL treat customers.</li><li>Get politicians out of procurement, and induct technology like wireless corDECT at 512 Kbps for rural areas if appropriate, even if it is “old” and not state-of-the-art, instead of waiting for years for alternatives that aren’t there of 3G or LTE (Long-Term Evolution or 4G), and will cost much more.</li><li>Move up to 3G/LTE after some years of generating profits.</li><li>Work with India’s technology companies to build local equivalents of Huwaei and ZTE, with India’s assured markets. (This requires policies far beyond the ambit of the DOT, as in the way China has nurtured Huawei/ZTE for years.)<br /></li></ul>
<p>Put the whole package together, end-to-end, and BSNL/MTNL could be winners, as would the public.* Private operators will face competition if this happens, but they can gain from the rise in business levels. These are big issues for immediate consideration and action. Such challenges are best addressed collaboratively.</p>
<p>Although collaboration seems far removed, notable exceptions like Amul, Operation Flood, the Sirmour farmers’ cooperatives for irrigation, SEWA (Self-Employed Women’s Association) and Infosys prove that it is feasible.</p>
<h3>Problem-solving vs confrontation and attrition</h3>
<p>Thinking and acting in our collective interests require making hard choices after cost-benefit analyses. From this perspective, we should address BSNL and MTNL from an assessment of India’s needs and available alternatives, rather than only as a historical mess. True, the mess has to be dealt with, but with forward-looking considerations of public benefits for the common good. Employees need to recognise this, juxtaposed with the consequences of unyielding self-interest. We need problem-solving, not battles of attrition from hardened, silo positions of unions, government, and management, or ITS versus the rest, or any entrenched interest group. These legacy positions are “dug in”, and perpetual confrontation leads to desecration: of service capability, of competitive staying power, productivity and of sheer employability. There is so much more they could do for a potential one billion users.<br /><br />It isn’t that self-improvement is not being attempted, like the Sanchar Nigam Executives Association (SNEA) addressing processes such as Call Detail Record (CDR) systems for customer care and billing, or Managed Services and Managed Capacity, Bharti’s innovations in outsourcing not only development and maintenance, but even procurement to Ericsson, as recommended by the Pitroda committee.** The change that is required is for all groups to pull together, however simplistic it may sound. Then, these national assets — the networks and human resources — can be leveraged to compete effectively with private operators.</p>
<p>Read the original article in <a class="external-link" href="http://www.business-standard.com/india/news/shyam-ponapparight-ringtone/390367/">Business Standard</a></p>
<p>
For more details visit <a href='https://cis-india.org/telecom/blog/ring-tone'>https://cis-india.org/telecom/blog/ring-tone</a>
</p>
No publisherShyam PonappaTelecom2012-05-10T10:39:51ZBlog EntryChina Club instead of Bombay Club?
https://cis-india.org/telecom/blog/China-club-Bombay-club
<b>Emulate China's coordinated policies for strategic sectors, and we'll rely less on commodity exports, says Shyam Ponappa in his article in the Business Standard on May 13, 2010.</b>
<p>With the momentum of the past few years, India’s potential for growth is enormous, despite the chaotic loose linkages. In sectors like power and telecommunications, this translates to demand far outstripping capacity. Some contend that domestic inability to build capacity — i.e., being able to actually pull it off, as against the perpetual potential — will conscribe not only these sectors, but also limit overall growth. So the argument goes, e.g., let China build India’s power plants, because we need the power and don’t have capacity/they do it cheaper.</p>
<p>Comparative advantage notwithstanding, this reasoning is fallacious given the realities of national interests and self-interest. To understand why, consider the naïveté of the underlying assumptions — about “rational man”, that capitalism is fair, capital is immobile, surplus value accrues to countries and not to companies, or that the pursuit of self-interest maximises societal <a class="external-link" href="http://www.lsd.ic.unicamp.br/~oliva/papers/free-software/BMind.pdf">benefits</a>.</p>
<p>Our quandary is aggravated by our inability so far to orchestrate supportive policies for even a level playing field. Ironically, one need only consider India’s approach to IT and IT-enabled services (ITeS) in the initial growth years to realise this. India’s policies in IT and ITeS, while far from perfect — in fact, sneaked through by stealth, as in the preferential 64 kbps communications lifeline, and the tax breaks for software service exporters — provided the foundations for transforming IT and then ITeS/BPO/KPO (Business Process and Knowledge Process Outsourcing).</p>
<p>These sectors also benefited from a controlled exchange rate, as the Reserve Bank of India (RBI) managed a steady depreciation during those years. But they did not have another vital ingredient of coordinated policies as did the Asian tigers: low borrowing rates (<a class="external-link" href="http://www.business-standard.com/general/pdf/050610_03.jpg">see the diagram</a>)</p>
<p>This is one reason why, for instance, India’s machine tool manufacturers or shipbuilders have not matched the growth of knowledge-based services. The former need inexpensive, long-term capital for production and marketing, as well as for continuous innovation, upgrade and <a class="external-link" href="http://www.wu.ac.at/europainstitut/noeg/raju_s2.3-2">scale</a>.</p>
<h3>Why labour arbitrage and not products</h3>
<p>This is also one reason why we lack product orientation, because product design, development and marketing require the support of easy access to cheap capital for a long period. Labour arbitrage needs little capital. Therefore, we have been better mercenaries than producers of products, compared with the chaebols (Samsung, Hyundai) or keiretsu (Mitsubishi, Dai-Ichi/Mizuho). There are, of course, many additional reasons: their education, training, work practices, our policies against large corporations, etc.</p>
<p>With growth in domestic markets across a broad range — telecom equipment, engineering goods, power — there are domestic manufacturing initiatives, such as L&T and Bharat Forge in power generation joining Bhel, or Tejas Networks in optical switching. But for the transformational changes we have witnessed in IT, we need coordinated industrial policies that support domestic manufacturing, because that’s the competition. Unthinking acceptance of “open markets” without heed to how others — including developed economies — cosseted and built their manufacturing capacity will ensure that India stays a raw materials and commodities exporter, while importing trains, aircraft, machine tools, and equipment for power generation, telecommunications and defence.</p>
<h3>Integrated policies work</h3>
<p>Ideally, supportive policies comprise a coordinated range, such as state and central taxes, favoured locations with good infrastructure — energy, transport and communications, subsidised land, favourable exchange and interest rates, preferred access to domestic markets, and barriers to unfair competition, like import tariffs not below the WTO floor, and safeguard duties. Without this orchestration, the victors are companies and countries that have understood these principles, and have these systems in place. (This applies equally to farm products.)</p>
<p>Many are apprehensive that what works elsewhere will not work in India because of malpractices, as seen in recurring scams. There is every need for systems with integrity, and for enforcement with penalties. But just as corruption in government or civil society does not do away with the need for either, misuse does not negate the need for incentives. It would be self-damaging to lose the opportunity to try and get our act together simply because of apprehensions of corruption and/or incompetence. That would be like not subsidising food for the poor; it’s a different matter that we need better methods to prevent gross misappropriation.</p>
<p>The consequence of heedless, ad hoc muddling through instead of orchestrated strategies is that manufactured imports will dominate our markets, while domestic manufacturing is fragmented, hamstrung or absent. Having said that, consider India’s needs in electricity or communications — telecom, Internet and broadcasting — and it is apparent that crafting policies is not simple. So many conflicting images, some based on facts, others, mere impressions, which are often more important than facts. What should policy-makers do for our needs on such a massive scale with growing shortfalls?</p>
<h3>Emulate China</h3>
<p>The short answer: learn from China. In the power sector, Chinese suppliers have the following advantages:</p>
<ul><li>
<p>Low-cost access to capital.</p>
</li><li>
<p>An exchange rate advantage (10-30 per cent).</p>
</li><li>
<p>No sales tax and octroi, aggregating to about 11 per cent.</p>
</li><li>
<p>Zero customs duty on equipment for large plants (China imposes a 30 per cent import duty)</p>
</li></ul>
<p>Corrective action discussed for years has not resulted in concrete steps. The power ministry, citing supposed user benefits, opposes the planning commission’s recommendation of a safeguard duty. This is as shortsighted as “free electricity” that undercuts investments in power.</p>
<p>In telecommunications, consider Huawei, with revenues of over $20 billion, nurtured for 20 years with the People’s Liberation Army (PLA) as an R&D partner and guaranteed customer, vis-à-vis, say, Tejas Networks from Bangalore, with no government support.</p>
<p>Our policies need to focus on our long-term interests with strategic intent and execution, as in other countries, balancing costs with the benefits of domestic capabilities. These sectors need government procurement support, not criteria that disqualify Indian companies in strategic sectors like power and communications. They also need interim methods for Chinese companies to contribute while upgrading our skills and processes. Our aim needs to be a level playing field.</p>
<p>Read the original article in the <a class="external-link" href="http://www.business-standard.com/india/storypage.php?autono=393889">Business Standard</a></p>
<p> </p>
<p>
For more details visit <a href='https://cis-india.org/telecom/blog/China-club-Bombay-club'>https://cis-india.org/telecom/blog/China-club-Bombay-club</a>
</p>
No publisherShyam PonappaTelecom2012-05-10T10:35:05ZBlog EntryCatching up on broadband
https://cis-india.org/telecom/blog/catching-broadband
<b>The govt can invest some of the Rs 1,00,000 crore from the spectrum auctions to help India catch up on broadband, says Shyam Ponappa in his latest article published in the Business Standard on July 1, 2010.</b>
<p>When it comes to broadband, India is “notably lagging its peers”, to quote Booz & Co, an international consulting firm.<span class="visualHighlight">1 </span>Its report recounts our pathetic coverage — less than half the anticipated 20 million — and recommends that both industry and government must act in concert. Spelling out the roles for both, it concludes that we need a national policy to improve fixed-line infrastructure more rapidly than the current market-based approach does, as well as satellite-based communications.</p>
<p>The report recommends this because advanced economies have broadband on widespread fixed-line networks, and many are pursuing strategies to further empower their citizens through state action, as before. The effects are many, but let’s start with examining costs. <a class="external-link" href="http://www.business-standard.com/general/pdf/070110_18.jpg">Figure 1</a> shows the relative cost of broadband in a sample of countries.</p>
<p>India seems favourably placed with its low purchasing power parity (PPP) cost. However, relative to costs in India, this is about 6 per cent of average monthly gross national income (GNI) per capita, ranked 78th, as shown in <a class="external-link" href="http://www.business-standard.com/general/pdf/070110_19.jpg">Figure 2</a>. In comparison, the first 23 countries — Macao, Israel, Hong Kong, the US, Singapore, etc., Greece and Spain included — have costs below or close to 1 per cent; the next 16 have costs below 2 per cent. As the 39 countries have PPP costs of only 0.25 per cent to twice India’s cost, India’s cost as a percentage of its GNI is six times theirs, i.e. Indian users have to pay relatively more. Increasing GNI, while desirable, is harder, more complex, and will take much longer. By contrast, costs can be reduced quickly by sharing network resources and limiting government collections to a reasonable percentage of revenues, instead of auctions and arbitrary levies.</p>
<h3>Broadband leaders</h3>
<p>Wired Asian countries like Japan, Hong Kong and South Korea already offer broadband on the next generation of high-speed networks. Singapore’s approach especially should be of interest to India, with policies supporting a blend of public subsidies and private investment, while separating three activities: infrastructure, network operations (wholesale), and user services (retail).2</p>
<p>Two years ago, Singapore set out to create an environment with more open access to downstream operators by separating the building of infrastructure from the running of the network. It drew on the experience of local community networks in countries like Britain, France, the Netherlands and Sweden. Three Singapore companies partnered with Axia Netmedia, a Canadian broadband company, to form a consortium called OpenNet, the infrastructure operator. OpenNet uses one partner’s existing network (SingTel’s) as a base. With a government grant of 750 million Singapore dollars, OpenNet is building an extensive fibre-to-the-home (FTTH) grid to be completed by 2012. The second partner is a subsidiary of Singapore Power, SP Telecommunications, which leverages Singapore Power’s experience in developing infrastructure. The third, Singapore Press Holdings, is a leading media services company.</p>
<p>The network operator, a subsidiary of StarHub (a cable and phone operator), is Nucleus Connect. Residential services at 100 mbps have been announced, to be provided by over 10 retail service operators. While some analysts opine that increased competition may not lead to appreciable cost reduction, Singapore is already ranked fifth-lowest in cost as a percentage of average monthly GNI per capita.</p>
<p>Can India do some catching up?<br />a) Can India do something similar? Don’t we need to? How?</p>
<p>The answer to the first question is: only if the government decides on a concerted drive.</p>
<p>To the second: yes, to be competitive.</p>
<p>To the third: with a comprehensive, integrated systems approach. It is insufficient if only one or a few ministries and agencies are involved, because the development and execution of solutions require cutting across turf boundaries. The conventional approach of the ongoing Trai consultation followed by recommendations addressed by the DoT is simply inadequate, because their charter is too limited. Many issues concerning commercial and user decisions, particularly of government agencies and the Department of Defence, and radical changes in approach need active participation from these players as well as the private sector for resolution. Examples are Booz & Co’s recommendations of a better fixed-wire network, and satellite communications in the Ka band, or the possibility of exploiting the cable and satellite TV network of around 110 million households. The entire communications network, or at least the backbone, needs to be shared for efficiency, unlike the existing limited tower-sharing. Also, state governments need to be closely involved in issues like Rights of Way and user needs.</p>
<p>b) Governments at the Centre and all states need to facilitate the productivity of their citizens, instead of hamstringing them with taxes, levies, auctions and dysfunctional policies. This is more easily said than done, with our predatory history, fractious coalitions at the Centre and states, and freewheeling, combative state governments. Governments at all levels have to coordinate this problem-solving initiative for all stakeholders, adapting the experience of leading broadband countries, instead of predatory behaviour seeking personal gains. The consultative process needs to agree on goals, and then figure out practical ways to achieve them.</p>
<p>c) With inspired leadership and a constructive approach, half of the over Rs 1,00,000 crore from the 3G and BWA auctions could support a broadband gambit drawing on concepts like Singapore’s public-private partnership, instead of being just a damaging revenue-collection exercise. Again, easier said than done, but with result-oriented, strong leadership to elicit enlightened employee engagement, even MTNL and BSNL could be partners in a core network in a role like SingTel’s. A public-private network-builder can draw on the combined strengths of its participants to provide a platform for a number of private operators. Separating the infrastructure building and operations from wholesale network services and end-user services could make this feasible and practicable.</p>
<ol><li>
<p class="discreet">“Bringing mass broadband to India: Roles for government and industry”, Booz & Co, June 7, 2010: http://www.booz.com/media/uploads/Bringing_Mass_Boadband_To_India.pdf.</p>
</li><li>
<p class="discreet">“Singapore gets wired for speed”, Sonia Kolesnikov-Jessop, NYT: http://www.nytimes.com/2010/06/15/technology/15iht-rtechbroad.html?ref=internet.</p>
</li></ol>
Read the original in <a class="external-link" href="http://www.business-standard.com/india/news/shyam-ponappa-catching-upbroadband/399894/">Business Standard</a>
<p> </p>
<p>
For more details visit <a href='https://cis-india.org/telecom/blog/catching-broadband'>https://cis-india.org/telecom/blog/catching-broadband</a>
</p>
No publisherShyam PonappaTelecom2012-05-10T10:32:27ZBlog Entry'Containing Inflation' - A myth
https://cis-india.org/telecom/blog/containing-inflation-a-myth
<b>We need problem-solving, not confused rhetoric or misguided action, says Shyam Ponappa. The article was published in Business Standard on 7 August, 2008.</b>
<p>It’s as if there’s a conspiracy to beat India’s growth surge to pulp, making sure the economy is hamstrung in the months and years ahead. Those of us seeking rational signals in the economy have watched incredulously as the cost inflation from edible oil, food and energy was misconstrued as overheating from 2006, leading to a series of misguided, self-destructive steps. Moreover, there has been a baffling obscurantism spread by many different quarters — the RBI, the Finance Ministry, and many economists including from the private sector, the media and press — spouting irrational sophistry about the need for the sledgehammer of rising interest rates “to contain inflationary pressures”.</p>
<p>Mutterings about the pass-through of international energy prices are of a piece. The effect of pass-throughs is to increase inflation further, and unlikely to reduce short-term demand (i.e. control inflation), unless the increase is so large that the economy slumps because of a drop in demand.</p>
<p>The build-up with the convoluted explications started with the RBI’s nagging suspicion [sic] in October 2006 that there “could be elements of overheating in the Indian economy”. This led to the hike of the repo rate from 7 per cent to 7.25 per cent, making financing more expensive in the Indian economy. By December 2006, the RBI raised the cash reserve ratio (CRR) by 50 basis points to reduce inflationary pressures, and by the end of January 2007, raised the repo rate to 7.5 per cent citing the demand-supply mismatch in food. By March 2007, the repo rate was raised to 7.75 per cent and the CRR by 50 basis points to 6 per cent citing continuing inflationary pressure. In June, the repo rate was raised to 8 per cent.</p>
<p>The benefit of hindsight makes it evident to all of us including the RBI and the government that these measures have done nothing to improve the supply of food or edible oil, or for the surge in petroleum prices. Inflationary pressures are expected to continue into 2009 despite these actions that have slowed the economy. So, what is the purpose, other than reducing growth precipitously? All that increasing rates and financing costs will do is to kill India’s growth story. This shows clearly in the figure in the slowdown from 2007 in GDP growth and in the Index of Industrial Production.</p>
<p>Increasing rates can only curb inflation by reducing growth so much that demand is curtailed for those whose ability to buy food increases because of higher earnings. That’s what the obfuscatory talk of “containing demand” boils down to: forcing the economy to slow so that some people can afford to buy less food. It is also clear that by increasing demand through the loan waiver and NREGS without addressing supply constraints, the government’s actions increased inflationary pressures. Likewise if the Pay Commission recommendations are implemented now instead of delayed for a year.</p>
<p>What rising financial costs have done to the Indian economy is to vaporise all prospects of high growth and profits. Further aggravated by the global slowdown and the repercussions of the continuing meltdown of home loans and overleveraged US consumers, this has reduced the prospects of currency inflows that have so far provided a ballast to India’s dream investment run.</p>
<p>Corrective Actions Require Substance, Less Form: The government and RBI could take a constructive, problem-solving approach to growth, inflation, interest and exchange rates, provided their purpose is solution-oriented and not a preoccupation with appearing to take action. These involve (a) avoiding gamesmanship — loan waivers, NREGS, the imperfections of the PDS — and addressing more effectively (b) fuel taxes and pricing, and (c) supply and distribution.</p>
<p>The first step may be to acknowledge that in the short term, there is little that can be done to ameliorate high food prices with one exception, while taking measures to improve supply over the medium and long term. The exception is interim steps to help the poor through food coupons that enable direct subsidies through existing retail systems.</p>
<p>Over the medium term, a system using smart cards needs to be planned and implemented through the retail network that provides direct subsidies for food and fuel to lower-income users. On fuel, there has to be a concerted move to reduce taxes and remove anomalies in petrol and diesel pricing (i.e. subsidising private vehicle owners, inappropriately encouraging the growth of small diesel vehicle manufacture and sales).</p>
<p>Equally important, we have to learn to take the good examples of applied research and extension to make them more of a reality. It’s as simple or as difficult as getting good applied research work done in the field, and providing convincing extension support to local farmers. I had the opportunity recently to review an excellent instance of applied research, combined with sound extension practices that ensure supplies of fresh vegetables wholesale, organised and channelled flawlessly.</p>
<p>Of course, unique aspects make this not easy to replicate. The first is a well-managed farmers’ cooperative. This was organised in Ladakh by the late Rigzin Namgyal Kalon of Leh with great foresight, integrity and ability some 40 years ago. Mr Kalon had the ability to see how farmers could prosper by organising themselves for supplying farm produce to the sizeable army presence in Ladakh. When Mr Kalon passed away in 2002, his peers had the good sense to appeal to his family to continue to lead their effort. The second is a wholesale buyer (the Army). The third is the presence of an institute engaged in effective applied research in agriculture, horticulture and animal husbandry in Ladakh. Started as the Field Research Laboratory under the Defence Research and Development Organisation, this is now the Defence Institute of High Altitude Research. This combination of elements provides the ingredients for a winning formula for the farmers of Ladakh.</p>
<p>Here are object lessons for those who see the potential for cooperatives, but think it cannot work in India. After all, there is Anand (the Gujarat Cooperative Milk Marketing Federation Ltd) and its extension to the National Dairy Development Board to prove that it can be done. We have to stop thinking of shortcuts, learn to replicate these ways, and teach ourselves to collaborate.</p>
<p>Read the original in <a class="external-link" href="http://www.bsl.co.in/india/news/%5Ccontaining-inflation%5Cmyth/330667/">Business Standard</a></p>
<p>
For more details visit <a href='https://cis-india.org/telecom/blog/containing-inflation-a-myth'>https://cis-india.org/telecom/blog/containing-inflation-a-myth</a>
</p>
No publisherShyam PonappaTelecom2012-05-10T10:30:56ZBlog EntryIndia's sorry spectrum story
https://cis-india.org/telecom/blog/sorry-spectrum-story
<b>In this article published in the Business Standard on June 3, 2010, Shyam Ponappa analyses the spectrum story in India. He says that the approach to spectrum management is an object lesson in how not to use information and communications technology for development.</b>
<p></p>
<p>The network of roads is mostly public property. What if the government decided to make more money from our use of this property? Made users pay for these public assets, whether the roads are there, or yet to be built? Demanded upfront fees for a fixed-term right, followed by annual fees marked-to-market to reflect “fair market value”?</p>
<p>All roads would be expensive, and few people would be able to afford their use. Imagine what it would do to plans to build new roads. Imagine how much you would have to pay for road use, how road usage would drop, the sheer inconvenience it would cause, and the impediments to productivity that will be created.</p>
<p>This is not happening to the majority of our roads, but it is to communications, especially broadband. With some differences, this is what spectrum fees are about. The major difference is that spectrum fees are levied on operators, not end users (the equivalent for roads would be fees from government agencies/road operators).</p>
<p>For instance, Bharti and Vodafone paid upfront fees of Rs 12,300 crore and Rs 11,000 crore, respectively, for 3G spectrum. This is one reason why the country won’t get widespread broadband networks in a hurry, nor would it get reasonably priced services. The investment in spectrum fees and networks is so high that operators will probably offer limited, high-margin products. They will focus on high-traffic routes and ignore the rest, serving 50-100 million, instead of a billion — this is exactly the opposite of what we need.</p>
<h3>The spectrum story</h3>
<p>This approach to spectrum management is an object lesson in how not to use information and communications technology (ICT) for development. Each operator is exclusively assigned a sliver of spectrum. The resulting “scarce spectrum” predicament demonstrates why this approach is entirely unsuitable for optimising net benefits. Optimisation requires making trade-offs between technology, economics and commercial interests for development and the common good.</p>
<p>The situation is aggravated by three additional factors:</p>
<ul><li>Too many operators in a franchise area (12-16 in India, as against an international average of three to five), resulting in limited capacity and high capital costs.</li><li>Limited availability of spectrum for commercial use, because of the extent assigned to the government, defence and the public sector.</li><li>The government’s periodic efforts to extract as much revenue as possible from spectrum — an exploitative approach — instead of nurturing capacity to generate fair tax returns over the long term. Even in advanced economies, high auction bids have been disastrous.</li></ul>
<h3>Consequences</h3>
<p>The average spectrum available per user is of the order of 5.5 MHz in India, compared to an international average of about 22 MHz. Delhi and Mumbai have cell sites that are less than 100 metres apart, compared with around 200 metres in Istanbul, 300 metres in Munich, and 350 metres in Berlin. Decreased inter-cell distances increase interference, thus restricting capacity. If each operator has more spectrum, traffic-handling capacity increases at a lower cost. Improving technical efficiency at the cost of economic efficiency loses out on capacity at low cost. Cellular operators in India are forced to extract greater spectrum efficiency, which sounds good until you factor in the increased costs and opportunity losses.</p>
<p>The report titled “An assessment of spectrum management policy in India”, Plum Consulting, December 2008, by David Lewin, Val Jervis, Chris Davis, Ken Pearson, estimates that spectrum assignments increased to international norms would have lowered industry costs by an 21 per cent (Rs 11,700 crore or $2.6 billion in 2008). This would have resulted in a more extensive coverage at less cost, with greater consumer welfare.</p>
<p>The result is high-cost infrastructure for operators as well as for users. Too many operators make for increased capital costs for each operator, and cumulatively for all operators — unless they use common networks. Higher efficiency requires more base stations and more advanced technology, both adding to costs. Despite this, operators are exhorted to improve their spectrum efficiency. After a detailed assessment, the report concludes:</p>
<ul><li>The claims regarding the scale of the capacity increases possible with the use of various techniques are significantly overstated.</li><li>In the case of adaptive multi-rate (AMR) codecs, this technique is already being deployed on a widespread basis.</li><li>The claims wrongly assume that the capacity gains from the different techniques are additive. This is simply not true in a number of cases. For example, the gain achievable with DFCA is less if AMR has already been implemented.</li><li>There are substantial costs associated with deploying advanced techniques — both for operators in terms of network upgrades and for end users in terms of new handsets.</li><li>It is important to be aware that deployment of some of the techniques, such as AMR HR, leads to lower quality of service.</li><li>The focus on spectrum optimisation techniques for 2G networks fails to take into account the fact that the efforts of the suppliers have now shifted from 2G optimisation to 3G deployment.</li></ul>
<p>Those making these claims seek more intensive deployment of advanced techniques to maximise technical spectrum efficiency. But a better policy objective, as we argue (in a later section), is overall economic efficiency. From this perspective, it only makes sense to deploy advanced technologies when this is a lower cost way of increasing capacity than adding further base stations. Indeed it is against the interest of the Indian economy to deploy them if this is not the case.</p>
<p>The approach is counterproductive and against our interests. Advanced economies are doing the opposite, encouraging investment in broadband to improve productivity, while India’s policies actually constrain productivity.</p>
<p>A third consequence is the non-availability of spectrum in the more efficient bands, eg, 700-900 MHz. This has a negative effect on last-mile roll-out and services in rural areas. Lack of coverage in the hinterland is a severe deficiency in areas that are poorly served by fixed-line networks. It only perpetuates the vicious circle of low potential in rural areas with deficient broadband and Internet access.</p>
<h3>The curse of spectrum auctions</h3>
<p>Two recent developments have created additional burdens. One is the 3G auction, with bids of over Rs 67,000 crore (almost $15 billion). Another is the Telecom Regulatory Authority of India’s recommendation that 2G operators with over 6.2 MHz must pay for additional spectrum at prices determined by the 3G auction, resulting in a precipitous fall in the shares of major operators.</p>
<p>Why should governments be concerned when stock prices fall? For the same reasons, they should want stable markets: Investment and prosperity, leading to public welfare. It makes little sense to entice investment into high-potential, sunrise sectors, only to batter successful enterprises with arbitrary “taxes”. Bharti described the changes as “shocking, arbitrary and retrograde”; Vodafone called them “opaque, illogical and discriminatory”.</p>
<p>Like an absurd play, events have taken a surreal turn, with the Department of Telecommunications reportedly demanding spectrum fees from the defence department. However, no additional demands were made on companies cashing in on assigned spectrum rights that sold for windfall gains without any networks or users. This seems equally absurd.</p>
<p>The government needs to give up making short-term revenue killings, and instead, maximise net welfare through building productive capacity. Ubiquitous broadband is good for productivity and for the environment. As for auctions, remember that collections from revenue sharing after the New Telecom Policy, 1999 (NTP ’99), far exceed the bids. Let us have the wisdom to collect those golden eggs over time, instead of eating the goose now.</p>
<p>Read the original in <a href="http://www.business-standard.com/india/news/shyam-ponappa-india/s-sorry-spectrum-story/396828/">Business
Standard</a></p>
<p>
For more details visit <a href='https://cis-india.org/telecom/blog/sorry-spectrum-story'>https://cis-india.org/telecom/blog/sorry-spectrum-story</a>
</p>
No publisherShyam PonappaTelecom2012-05-10T10:33:45ZBlog EntryWhat a highway can do
https://cis-india.org/telecom/blog/what-a-highway
<b>Despite signs of transformational change, we need more - SOPs and quality</b>
<p>Even as the country reels from the extended rains and the imminent Commonwealth Games, there are unmistakable signs in Delhi’s environs of an unprecedented transformation. To see and feel this, try driving to the Delhi-Noida toll bridge (the “DND”), and go past Noida on the expressway to Greater Noida.</p>
<p>It isn’t perfect, and there are many details that could be handled better, from the assets built to how we use them. These include unfinished verges with construction debris near the Ashram crossing, cambers without proper drainage that get flooded in some stretches of the expressway, motorcyclists sheltering from the rain under the flyovers/overpasses spilling on to the expressway, pedestrians with no place to cross, trucks at night without even reflectors, trucks that are parked without hazard lights, tractors, and occasional cattle. Most dangerous are the undisciplined drivers who act as if they are puttering along at 30 km per hour while going at the 100 km speed limit or more, or who drive on the wrong side against oncoming traffic. And the resurfacing of the road in parts leaves much to be desired…</p>
<h2>The transformation under way</h2>
<p>Ignore this cavilling and carping, however, and it is bliss. One can cover 30 km from the DND toll plaza to Greater Noida in 20 minutes legally, although within New Delhi, it may take as long or even longer to travel just a few kilometres. I was amazed recently driving from Shantiniketan to Greater Noida in 40 minutes. It was like driving in California — quite different from the contentious driving that is customary on our roads.</p>
<p>The sheer ease and convenience apart, another, arguably greater, benefit is the gain in productivity. It is this potential for productivity that, if we can wring from ourselves, is one part of the equation in our pursuit of an improved quality of life. It is especially important because of our vast numbers, including the much-bruited potential demographic dividend, which is not new. As Babur put it in the 16th century*: “…if they fix their eyes on a place in which to settle …as the population of Hindustan is unlimited, it swarms in.” Little has changed, and much needs to be built from the ground up, starting with sanitation and water, not to mention energy, communications, and transportation systems.</p>
<p>But just consider: the limited instance of the drive on the expressway reveals a productivity gain of three to four times at 20 minutes for covering 30 km, compared with covering only 7-10 km in the same time (or taking three to four times longer for 30 km). That’s a gain of 300-400 per cent!</p>
<p>There’s another noticeable change: a willingness of everyone to work very much harder at whatever they do. All levels of people, from entrepreneur-managers to electricians, plumbers, gardeners, and day labourers, work so hard that a major change seems to be afoot. I am familiar with the hardworking farmer and rural wage earner, having grown up on a farm myself. I have also experienced the recalcitrance of some public sector employees and private sector unions, as well as the productive, hard-charging PSU, government, and private sector employees. Yet, in the work attitudes of boomtown Greater Noida, I see impressive energy and application.</p>
<h2>The failings</h2>
<p>Let me not gloss over the weaknesses. There are big failures in delivery capability, and these arise from two critical lacunae:</p>
<p>a) <strong>SOPs, systems and procedures</strong></p>
<p>A major failing appears to be the lack of Standard Operating Procedures (SOPs) even for simple construction jobs, like painting metal: the ramrod, sequential steps of first scrape, then clean, apply primer, apply the first coat of paint and dry off; then apply the second coat… People simply don’t follow sound work practices — systems and procedures that, when applied, yield consistent good results. This is partly an endogenous failing, arising from lack of appropriate education/training and discipline. It is also partly attributable to the lack of organised systems and procedures.</p>
<p>b) <strong>Infrastructure</strong></p>
<p>An equally critical exogenous failing of the environment is reliable infrastructure, whether in the form of energy (power/electricity), communications, transportation excepting a one-off good stretch of highway, or water and sanitation. Take any single area, say energy. The extent of wasted manpower because of lack of adequate electricity supply is beyond imagination.</p>
<p>Add the bases for learning and functioning competently, and there’s education (including training) and health care as a support function. Proper education and training — and discipline — are absolutely essential for learning and developing sound work processes, and for applying them. There was an impression many years ago that incompetence or recalcitrance in delivery resulted from the inadequate capacity of individuals. In the last several years, it is evident that we have good people, but they have very poor training, systems and organisation, and equally poor infrastructure. You could call it a lack of leadership and discipline at all levels.</p>
<h2>What we need</h2>
<p>We need two sets of fixes. The first is for our inherent failings: the lack of SOPs and the need to learn to work to inexorable checklists and timelines. It is imperative to learn the discipline of project management at all levels — starting from the top, not the bottom! This is a sweeping change that entails shifting from feudal criteria to respect for professional competence and processes.</p>
<p>The second fix required is a supportive environment: good infrastructure and the appurtenances of good policies. Going by the figures, we will build more roads, power plants and factories in the next few years than in the last 60. But the net gain to society will depend on their quality. If they are shoddy, the gains will be much less. Assets that are not integrated into coherent systems will be less beneficial than if they are integrated to deliver results, e.g. isolated housing without a web of transportation and communication links near where people work; isolated good stretches of highway. It is imperative that we design and execute the infrastructure to support our productivity. This is an area of weakness we must address and execute more comprehensively.</p>
<p>Read the original in <a class="external-link" href="http://www.business-standard.com/india/news/shyam-ponappa-whathighway-can-do/406622/">Business Standard</a></p>
<p>
For more details visit <a href='https://cis-india.org/telecom/blog/what-a-highway'>https://cis-india.org/telecom/blog/what-a-highway</a>
</p>
No publisherShyam PonappaTelecom2012-05-10T10:26:52ZBlog EntryBroad-basing Broadband
https://cis-india.org/telecom/blog/broad-basing-broadband
<b>Education and training through the Internet need Commonwealth Games-like crisis management, says Shyam Ponappa in an article on broadband for education and training published in the Business Standard on 7 October 2010.</b>
<p>The central government and the Delhi administration have shown they can engage in sheer execution to save face for the Commonwealth Games. Couldn’t our governments choose to make similar efforts to improve an aspect of infrastructure that is perhaps the most powerful means for enhancing our productive capacity and quality of life: broadband? One might ask: why broadband, and not energy, water/sanitation, or roads…? While all infrastructure is essential, broadband gives the quickest, biggest bang for the buck, because of its nature vis-à-vis energy, water or transportation and our regulatory environment and functional organisation (for instance, the complexity of addressing power supply). If we could increase mobile phone coverage to present levels by reducing costs and increasing availability, it should be possible to do so for personal computer (PC) also, to draw on the wealth of free educational and training material for our vast numbers.</p>
<p>Unfortunately, for such infrastructure, there is no triggering crisis like the threat of failure of the Commonwealth Games, and consequently, no face-saving or glam factors, like the arrival of foreign teams and visitors. This article makes a case for a Commonwealth Games-type crisis management for broadband through a collage of factors.</p>
<p>Consider these aspects of our demographics<strong>1</strong>:</p>
<ul><li>Nearly 460 million people are aged between 13 and 35 today.</li><li>Of these, 333 million are literate.</li><li>In 10 years from now, the countrywide average age will be 29, compared to 37 in the US and China, 45 in Europe, and 48 in Japan.</li><li>As many as 100 million Indians — the combined labour forces of Britain, France, Italy, and Spain — are projected to be added to our workforce by 2020, which is 25 per cent of the global workforce.<br /></li></ul>
<p>This indicates our productive potential. Its realisation would require education and training, efficient functioning, i.e. the matrix of enabling infrastructure, and organisation. If these needs remain unmet, the demographic opportunity can become the liability of an unproductive population, with attendant difficulties and social hazards.</p>
<p>We have many formal and informal institutions providing training and education. We add nearly 300,000 engineering graduates every year to our pool of 2 million engineers. India’s vocational training capacity is estimated at 3.1 million a year, whereas about 12.8 million people enter the workforce. However, the National Sample Survey (2004) found that only 2 per cent of the 15-29 age group had formal vocational training and another 8 per cent had non-formal vocational training. In the developed economies, the proportion of skilled workers is 60-80 per cent; Korea has 96 per cent skilled workers.<strong>2</strong></p>
<p>Five years ago, McKinsey reported that only a quarter of India’s engineers were employable in the IT industry. Recently, a survey showed this has reduced to 18 per cent.<strong>3</strong></p>
<p>Apart from training and education in specific disciplines, the processes that make for good work practices are: systems thinking, a scientific temper, and goal-oriented work practices to meet standards of quality and time. Then there are the attributes of playing team, while engaging in a hard-charging individual effort. All these skills and practices are necessary and can be learned and renewed over time.</p>
<p>How will our workforce of over 500 million, adding 12.8 million every year, have access to continuing education and training, information for civic amenities and facilities and easy, efficient access to commercial and public services? What about the prerequisites of schooling, vocational training and university education? To answer these questions, consider parallel developments in domains such as distance education, e-learning and smart applications. Here are glimpses of the transformation underway in university and secondary education, especially outside India:</p>
<ul><li>iTunes U has become one of the world’s largest educational catalogues for free educational material. After three years, there are over 300 million downloads. Over 800 universities have their websites at iTunes U, including many of the top universities from the US, UK, France, Germany, the Netherlands, Singapore and so on.</li><li>Khan Academy (<a class="external-link" href="http://www.khanacademy.org/">http://khanacademy.org</a>), a brilliant, free educational site by an ex-hedge fund analyst and manager, Salman Khan (Salman Khan of Silicon Valley, not Bollywood), covers mathematics, physics, chemistry and biology, with over 18 million page views in August (<a class="external-link" href="http://www.khanacademy.org/">http://khanacademy.org</a>). Started in late 2006, Khan is reportedly developing an open-ended set of material covering many subjects, and is a favourite among people like Bill Gates, and John and Ann Doerr (Fortune: <a class="external-link" href="http://money.cnn.com/2010/08/23/tecnology/sal_khan_academy.fortune/index.htm">http://money.cnn.com/2010/08/23/tecnology/sal_khan_academy.fortune/index.htm</a>). Of the 200,000 students who access this site every month, only 20,000 are from India.</li><li>There are many other educational sites from school level upwards, for instance, the Open Courseware Consortium (<a class="external-link" href="http://www.ocwconsortium.org/">http://www.ocwconsortium.org</a>) by MIT, with US members like the University of California (Berkeley), Michigan and so on. Many universities and schools have their own websites. There is the Wikiversity, with portals from pre-school through primary to tertiary education, non-formal education and research (see <a class="external-link" href="http://en.wikiversity.org/wiki/Wikiversity:Browse">http://en.wikiversity.org/wiki/Wikiversity:Browse</a>).</li></ul>
<p>India, BCG estimates that Internet usage will increase from 7 per cent of the population in 2009 to 19 per cent in 2015 (237 million). PC penetration, which was just 4 per cent in 2009, is estimated at 17 per cent by 2015 (216 million). To quote BCG: “India has among the highest PC costs and lowest PC availability of all the BRIC countries (including Indonesia).” Mobile phone penetration, however, is 10 times higher, at 41 per cent. This appalling situation needs to be redressed.</p>
<h3>Inferences</h3>
<p>Hundreds of millions of Indians should use these websites and the Internet for radical transformation. This will require policies and practices aimed at providing:</p>
<ul><li>inexpensive access to broadband;</li><li>greater access to PCs and PC-equivalents as they evolve (e.g. Pranav Mistry’s SixthSense); and</li><li>systems and processes that encourage distance education, and discipline in all fields, with professionalism and excellence across all activities.<br /></li></ul>
<p>Regulations and tax regimes determine which activities are profitable, and to what extent. This is where the government and its policies come in. Could Internet users in India converge public opinion to rouse governments to address these needs, emulating the example of Delhi Chief Minister Sheila Dikshit?</p>
<ol><li>
<p class="discreet">http://indiatoday.intoday.in/site/Story/114002/India/aroon-puries-welcome-address-at-youth-summit.html</p>
</li><li>
<p class="discreet">Employment Report, Ministry of Labour, July 1, 2010: <a class="external-link" href="http://labour.nic.in/Report_to_People.pdf">http://labour.nic.in/Report_to_People.pdf </a></p>
</li><li>
<p class="discreet">http://www.business-standard.com/india/news/engg-college-students-not-industry-ready-survey/388620/</p>
</li></ol>
Read the original article in the <a class="external-link" href="http://webcache.googleusercontent.com/search?q=cache:V3cjHBmzlnYJ:www.business-standard.com/india/news/shyam-ponappa-broad-basing-broadband/410402/+broadband+for+education+and+training,+business+standard&hl=en&gl=in&strip=0">Business Standard</a>
<p> </p>
<p>
For more details visit <a href='https://cis-india.org/telecom/blog/broad-basing-broadband'>https://cis-india.org/telecom/blog/broad-basing-broadband</a>
</p>
No publisherShyam PonappaTelecom2012-05-10T10:25:06ZBlog EntryIdeology and ICT Policies
https://cis-india.org/telecom/blog/ideology-and-ict
<b>For better policies, decision-makers need to know their own and others’ biases, and consider what others are doing, writes Shyam Ponappa in an article published in the Business Standard on 4 November 2010.</b>
<p>Why do the same facts regarding people’s needs for ICT infrastructure give rise to different policies? Apart from problematic motivation such as malicious intent and opportunism, even well-intentioned policy-makers may prescribe entirely divergent solutions for a given situation. This is evident if one compares India’s broadband policies with those of most countries. There are at least two reasons for this: differing perceptions of the facts, and differences in underlying beliefs and assumptions, i.e. ideology, as distinct from objective data.</p>
<p>Consider the facts of India’s ICT space. In one sense, there has been spectacular success in the communications sector. One statistic cited as evidence is the phenomenal increase in mobile phone subscriptions (over 12 million in September 2010). Equally, to those who focus on aspects like the shortfall in services outside the big cities and towns, or the meagre broadband coverage and its inaccessibility in rural areas (i.e. in much of the country), the communications sector falls tragically short of its potential, and requires policy change.</p>
<p>In this time of India Rising interrupted by the Great Recession, there is a stark contrast between the orientation of our ICT policies and that of most other countries. One area is the extent of government intervention and spending on broadband development. Governments of most advanced economies have stepped in to dramatically improve their broadband networks and policies for user access. This is not only in the EU where, historically, the approach is that government acts to extend consumer welfare, but also in America, the UK and Australia, which are considered much more free-market-oriented in their approach, and in many countries in Asia, including China. Unlike in America since Reagan, regulatory intervention in Europe is part of more supportive policies at the national and local levels. But this time around, even America has embarked on a comprehensive Broadband Technology Opportunities Program, with the goals of providing access to users in unserved areas, improving access in underserved areas, supporting public interest schemes for broadband access, improving broadband use by public safety agencies, and stimulating demand for broadband, economic growth and jobs; there is also a separate Rural Utilities Service.*(Click for <a class="external-link" href="http://www.business-standard.com/content/general_pdf/110410_02.pdf">graph</a>)</p>
<p>With regard to underlying assumptions and beliefs, an analysis on how economic doctrines affect policies by Robert D Atkinson of the Information Technology and Innovation Foundation offers a way to think through alternatives for better decisions.** His analysis is on ICT, although it can be applied to all sectors. To quote from his conclusion, for advocates and policy-makers, “differences over doctrine cause partisans to view facts differently and to focus on small segments of complex debates, leading to a breakdown of constructive dialog and much ‘talking past each other’.”</p>
<p>He summarises four ideologies or economic doctrines:</p>
<ul><li>Conservative Neoclassical (CNC)</li><li>Liberal Neoclassical (LNC) </li><li>Neo-Keynesian (NK) <br /></li></ul>
<p>Innovation Economics, also called structuralist-evolutionary, neo-Schumpeterian, or evolutionary economics (IE)</p>
<p>While he describes differences in nuanced detail, the simplified abstractions rendered as a logic tree in the accompanying diagram (above) show how economic beliefs affect network policies.</p>
<p>CNCs are characterised as being less concerned with fairness, and less likely to expect market failures. Therefore, network and broadband markets in which governments do not intervene are considered to be competitive, and require no unbundling or price prescriptions. Their bias is for pure competition.</p>
<p>LNCs are more concerned with fairness, as are NKs and IEs. They accept that telecommunication markets are not competitive, and that there may be market failures. LNCs and NKs would use policy to increase competition in different ways. LNCs expect more competition to lead to increased consumer surpluses. LNCs favour regulated competition, viewing more competition as better. NKs want more competition through directed government subsidies, e.g. for municipal broadband or to small companies (which they consider less rapacious than large corporations).</p>
<p>IEs believe broadband markets have economies of scale, and that increased competition could result in excessive and redundant investments. They consider duplication of existing, expensive infrastructure as inefficient investment. IEs view communications infrastructure as a “general purpose technology” that drives economic activity, innovation and productivity. Therefore, they advocate policies that invest in higher-speed broadband, and in extending network services to more people, favouring a national broadband policy. The US National Broadband Plan defines broadband as a “Transformative General Purpose Technology”, and most countries practise IE. Irrespective of their economic philosophies, most countries have embarked on an aggressive broadband plan.</p>
<p>In comparison, India’s approach does not fit any of these categories. There are no policy incentives for broadband, and actions like the spectrum auctions this year indicate a focus on collecting government revenues rather than on facilitating communication services. Whereas the OECD countries and other Asian economies are working on network resource-sharing schemes, India seems to have previous-generation preoccupations: revenue-collection-for-the-government, increasing competition per se, or abstruse technology considerations, such as loading the most traffic on every unit of commercially available spectrum, instead of maximising the economic benefits from it. Costs and benefits in the public interest are apparently ignored.</p>
<p>BSNL, MTNL and DD have networks that, if they could be channelled with the right mix of policies and private enterprise, could be part of the overall backbone infrastructure for open network operations, as is being done by a consortium in Singapore. If our policy-makers understand their biases as well as those of others, they could adapt beneficial policies from other countries, as demonstrated by many countries with different philosophies converging on improving broadband.</p>
<p class="discreet">* “Broadband Stimulus Policy in Europe and the US: A Comparative Review”, Dariusz Adamski, Berkman Center for Internet and Society, Harvard Law School: <a class="external-link" href="http://www.nyls.edu/user_files/1/3/4/30/84/187/245/Adamski,%20SPRING%202009,%2018%20MEDIA%20L.%20&%20POL%E2%80%99Y.pdf">http://www.nyls.edu/user_files/1/3/4/30/84/187/245/Adamski,%20SPRING%202009,%2018%20MEDIA%20L.%20&%20POL%E2%80%99Y.pdf</a></p>
<p class="discreet">** “Network Policy & Economic Doctrines”, Robert D Atkinson, The Information Technology & Innovation Foundation, October 2010: <a class="external-link" href="http://www.itif.org/files/2010-network-policy.pdf">http://www.itif.org/files/2010-network-policy.pdf</a></p>
<p>Read the original in <a class="external-link" href="http://business-standard.com/india/news/shyam-ponappa-ideologyict-policies/413676/">Business Standard</a></p>
<p>
For more details visit <a href='https://cis-india.org/telecom/blog/ideology-and-ict'>https://cis-india.org/telecom/blog/ideology-and-ict</a>
</p>
No publisherShyam PonappaTelecom2012-05-10T10:21:49ZBlog EntryTake 'Model T' for Telecom
https://cis-india.org/telecom/blog/model-t-telecom
<b>We need an initiative coordinated by the PMO that optimises both services and government revenues, says Shyam Ponappa in his article published in the Business Standard on 2 December 2010.</b>
<p>The 2G spectrum troubles give India an opportunity for clear thinking and purposive action for a significant impact on people’s lives. We (all stakeholders: operators, central and state governments and agencies, the media, opposition parties, PSUs and private corporations, and citizens) need to recognise that there are two distinct aspects to the wrangle: legacy problems and the way forward. The 2G controversy has to do with the truth and consequences of legacy actions. The way forward concerns our fundamental purpose, i.e. the delivery of effective and efficient communications services. What then must we do?</p>
<p><strong>1. Past problems: Follow due process</strong><br />Many commentators and sections of the public take a shotgun approach, demanding the cancellation of licences and auctioning confiscated spectrum. This is outside the purview of the law and will destabilise the sector and the economy, as will any arbitrary government action.</p>
<p>In a democratic society, there is a proper way to address these problems: through the due process of law, not summary judgements ending in figurative lynchings. There are contracts with operators, and we have to learn to respect and enforce the law. Use harsh penalties by all means, but only after (a) going through due process in establishing the facts, (b) provided there is evidence of culpable wrongdoing, and (c) the law calls for harsh penalties. If the law calls for a slap on the wrist, we need to change our laws for serious crimes, not resort to mob violence in the guise of righteous outrage.</p>
<p><strong>2. Present and future needs: Approach needs with a sense of purpose</strong><br />A different aspect of the predicament relates to how we can achieve improved communications infrastructure and services in India. This includes broadband Internet, voice telephony, TV and radio. We need a constructive approach encompassing services, hardware and software, instead of being mired in outmoded practices based on exclusive spectrum allocation, for example. Our focus has to be on our purposes/needs: ubiquitous access at a reasonable price. We need broadband for every household. How do we get it? (<a class="external-link" href="http://www.business-standard.com/content/general_pdf/120210_01.pdf">Click for graph</a>)</p>
<p><strong>Capitalising on the low-margin model</strong><br />The growth of mobile telephony provides a workable model. The graph above shows the rise in subscriptions with declining prices after the shift to revenue sharing in NTP ’99, together with reductions in revenue share percentages for licence and spectrum fees, and in the access deficit charge.</p>
<p>This is a good instance of Henry Ford’s low-margin, high-volume strategy for the Model T. To sustain low tariffs extending to broadband, we need to reduce extraneous levies. A Trai study of 2005 showed government levies on telecommunications in India were far in excess of China, Sri Lanka and Pakistan.*</p>
<p>The study also showed that licence fees from the original auctions would have amounted to Rs 19,314 crore through 2006-07. According to the CAG report, licence and spectrum fees with reduced levies actually amounted to Rs 40,169 crore by 2006-07, i.e. double the auctions; by March 2010, the figure was nearly Rs 80,000 crore.** Over a long period, reduced revenue share for licence and spectrum fees has resulted in explosive growth as well as higher government collections than auctions and high fees.</p>
<p>The study also showed that licence fees from the original auctions would have amounted to Rs 19,314 crore through 2006-07. According to the CAG report, licence and spectrum fees with reduced levies actually amounted to Rs 40,169 crore by 2006-07, i.e. double the auctions; by March 2010, the figure was nearly Rs 80,000 crore.** Over a long period, reduced revenue share for licence and spectrum fees has resulted in explosive growth as well as higher government collections than auctions and high fees.</p>
<p><strong>Initiative by ministry or PMO?</strong><br />Why can’t the communications ministry, the DoT and Trai effect this transformation? Recall the scope of NTP ’99 and the role of the Prime Minister’s Office (PMO) for these reasons:</p>
<p>First, reduced short-term government revenues. In the long term, the revenue sharing in a vibrant sector far exceeds the auction take, as shown above. Recall that the primary motivation for the licence auctions of the 1990s and the spectrum auctions was collecting government revenues. Hence, the first criterion is the stance of the finance ministry and the government on revenue collection.</p>
<p>A second criterion at the state level is also financial, for rights of way charges.</p>
<p>Third is India’s approach to spectrum management. Spectrum use can be structured like road or rail networks, or oil pipelines, instead of being treated as exclusive property or usage rights. The difference in costs and benefits to society is staggering. It’s like the right to use daylight or the air we breathe. Visible light is a part of the same electromagnetic radiation, so if there is a charge for radio frequency spectrum, why not for visible light and/or the atmosphere? Rentiers might see this as an opportunity for revenues, but democracies surely must consider it against the public interest.</p>
<p>Existing networks of various government undertakings, including PSU operators BSNL and MTNL, PowerGrid, Gail as well as private operators, could be managed as national assets, as described above for spectrum on payment for usage. This need not mean government control and administration, as there could be a consortium with government participation. There are compelling economic reasons for public access to spectrum and networks because of the drastic reductions in investment, with higher asset utilisation, environmental benefits from less redundancy, and reduced radiation from towers, as in one highway network instead of many.</p>
<p><strong>The opportunity</strong><br />Even as the law takes its course on wrongdoings, we need a new “New Telecom Policy” on the lines of NTP ’99. This is essential for transformational changes in communications services, clearing up confused policies that are at cross-purposes, and extending to boundary domains in ICT. We should aim for “Model T” pricing with access for everyone. We need an across-the-board initiative to replicate the successful aspects of mobile telephony for broadband and other forms of communication (TV, radio). The PMO could orchestrate a workout with all stakeholders that builds in the benefits of shared network resources, including spectrum, with efficient, low-frequency spectrum for rural communications with much less capital investment.</p>
<p>* Study Paper on “Indicators for Telecom Growth”, Trai, 2005: http://www.trai.gov.in/trai/upload/StudyPapers/2/ir30june.pdf</p>
<p>** “Performance Audit Report on the Department of Telecommunications, Ministry of Communications and Information Technology”, http://saiindia.gov.in/cag/union-audit/report-no-19-performance-audit-issue-licences-and-allocation-2g-spectrum-department-tele</p>
<p>Read the original in Business Standard <a class="external-link" href="http://business-standard.com/india/news/shyam-ponappa-take-%5Cmodel-t%5C-for-telecom/416770/">here</a></p>
<p>
For more details visit <a href='https://cis-india.org/telecom/blog/model-t-telecom'>https://cis-india.org/telecom/blog/model-t-telecom</a>
</p>
No publisherShyam PonappaTelecom2012-05-10T10:16:54ZBlog EntryThe policy langurs
https://cis-india.org/telecom/blog/policy-langurs
<b>The comforts of civilised living for all Indians require dedicated collective effort. The article by Shyam Ponappa was published in the Business Standard on 6 January 2011. </b>
<p>At this difficult point in our hapless trajectory as we thread our way through the divine comedy, there is a sudden burst of light, cutting through the gloom of the new year: an uncharacteristic but effective bipartisan effort by a group of parliamentarians in dealing with a practical problem. This is the saga of the hapless and troublesome monkeys of Raisina Hill and its environs, booted out by the Brits to build the Rashtrapati Bhavan and the Central Secretariat, and the parliamentarians who live on Mahadev Road nearby. Press reports say that BJP Spokesman Prakash Javadekar adopted a problem-solving approach by suggesting to six of his neighbours (five Congress MPs and one Independent) that they collectively hire a langur patrol to shoo away the monkeys that have been marauding in their gardens. Five of the six responded positively, and so they have a langur patrol, as do a number of government buildings there. And the monkeys stay away.</p>
<p>Why is this important? Because of how powerfully it illustrates the obvious: that collective, goal-oriented action can be very effective in achieving results. Now, if this could be extended to bipartisan initiatives (in the sense of government and the Opposition in the context of our fragmented politics), e.g. in building national assets like infrastructure, then constructive, forward-looking policies can be framed, and we can start building on what has gone before. This will take us past the blight of being in a perpetual stall. One example is resource-sharing for countrywide broadband and communications services. Another is our approach to energy production and supply. And so on.</p>
<h3>The bipartisan imperative</h3>
<p>I have written earlier on the rationale for spectrum- and network-sharing for broadband and telecommunications.</p>
<p>The framework for this kind of resource-sharing and organisation cannot be done without bipartisan efforts at the policy formulation stage for conceptualisation and during implementation, because various state and local governments will be involved, as will many central government ministries and departments. A bipartisan approach is also essential for devising supportive tax policies, including the development and execution of uniform, inexpensive rights-of-way charges at the state level. Not least will be the question of spectrum pricing, a matter muddied by so much contention and confused thinking regarding the economics and the technology, aggravated by opportunists seeking to make a killing, together with the well-intentioned but ill-informed flailing of strident advocates urging counterproductive measures like cancelling licences without due process and/or holding more auctions, all supposedly in the national interest, oblivious of the consequences.(Click for<a class="external-link" href="http://www.business-standard.com/content/general_pdf/010611_03.pdf"> OPTIC FIBRE CABLE NETWORK</a>)</p>
<p>To appreciate the compelling logic, consider the network of an organisation like RailTel, with over 35,000 route km of optical fibre cable (OFC) network, or Gailtel with about 14,000 route km of OFC and planning close to 19,000 OFC in the next few years (interactive maps at: http://www.gailonline.com/gailnewsite/businesses/telecomnetwork.html).</p>
<p>BSNL has over 67,000 route km in the southern region alone, and other PSUs and private operators like Bharti Airtel and Reliance have their own extensive networks. Combining or integrating these will shift the focus to the tasks of last-mile access and spectrum deployment to achieve potential connectivity for most households and users.</p>
<p>Imagine the potential with some (three or four?) consortiums of wholesale service providers for the country having access to the combined networks of all or several such owners, including the collective capacity in terms of spectrum, access, aggregation and backhaul. These, in turn, could enable access to many retailers for local services to end users.</p>
<p>A second substantive aspect of such a bipartisan initiative is in structuring the national backbone facilities organisation, e.g. on the lines of Singapore’s OpenNet*. This may be an opportunity to capitalise on the BSNL and MTNL networks and revive them, perhaps as the anchor investors (possibly with other PSUs, such as RailTel, GAIL, and Powergrid). This anchor investor consortium could hold, for instance, 30 per cent of the equity in the venture. Other participants could include international companies like Axia, which design, build and operate next generation networks. Axia started out in Canada over 10 years ago and now has projects in France, Spain and Singapore, and has bid for a project in America. Other participants could be like Spectrum Bridge, a US company which runs centrally managed spectrum networks in America in the TV “white spaces”, the digital dividend from TV spectrum reallocated for telecom purposes. Their database-driven approach could be applied to the entire pooled spectrum of a large network with the participation of systems integrators like Infosys, TCS, Wipro, or IBM.</p>
<p>A third potential initiative is to encourage R&D and applications, perhaps seeking the development of local standards for wireless communications in the long term, even the Holy Grail of inexpensive “cognitive radio” (self-managing end-user equipment) with open spectrum. The size of our market offers the potential for such ambitious and potentially beneficial development. This will need policy support, especially for collaboration between defence and the private sector, with the creation of sustained support over a long period.</p>
<p>We know the apocryphal tales like that of the four bulls and the lion: the bulls are safe as long as they stay united, but when they squabble among themselves, the lion picks them off one by one. There is Aesop’s fable of the old man who shows his sons that while they can easily break one stick at a time, the same sticks bound together cannot be broken. Or the Mongolian story of the five siblings, the ancestors of the Mongolian clans, whose mother shows them that while each can easily break a single arrow, the five arrows tied together are unbreakable.</p>
<p>Despite this knowledge and evidence that the comforts of civilised living for all Indians require dedicated collective effort, we refuse to work to this truism of the need for collaborative effort. Suddenly, Mr Javadekar’s can-do Langur Initiative changes the game.</p>
<p>Even as the due process of law continues with regard to past wrongdoing, our parliamentarians should be grappling with substantive issues of nation-building such as those described above, instead of wasting time on tearing each other down.</p>
<p>Read the original in the Business Standard <a class="external-link" href="http://www.business-standard.com/india/news/shyam-ponappapolicy-langurs/420804/">here</a><br /><br /></p>
<p>
For more details visit <a href='https://cis-india.org/telecom/blog/policy-langurs'>https://cis-india.org/telecom/blog/policy-langurs</a>
</p>
No publisherShyam PonappaTelecom2012-05-10T10:15:17ZBlog EntrySpectrum auctions - 'Jhatka' or 'Halal'?
https://cis-india.org/telecom/blog/jhatka-or-halal
<b>The choice is between sudden death and a slow one. The article by Shyam Ponappa appeared in the Business Standard on 3 February 2011.</b>
<p>Why do people advocate spectrum and licence auctions? Is it because they think auctions work? Is it the appeal of an ideology, like capitalism or socialism? Or is it because governments often collect large sums, and auctions seem fair (in a market-driven sense) and transparent? Theorists apparently cannot find better ways to allocate spectrum or licences, despite the alternative of technical and financial short-listing followed by a lottery. Yet, while desiring high government collections, people really want reasonably-priced good infrastructure, and continue to rail against government waste. Let’s review some so-called “successful” auctions and what followed.</p>
<p><strong>1994: The US spectrum auction</strong> Prior to 1994, the US used to allocate spectrum on demonstrated capacity and merit (“beauty contests”). The spectrum auction in 1994 netted record bids. The Federal Communications Commission chairman reportedly said: “Auctions have proven once again to be a success not only by awarding licences to those that value them most, but also by decreasing the national debt.” Then disaster struck, with a number of “successful” bidders declaring bankruptcy. As BusinessWeek put it in 2010 with the benefit of hindsight, “... over time, beauty contests have delivered fewer problems and higher value to society than have airwave auctions.”1</p>
<p><strong>1994: India telecom licences</strong> In 1994, India auctioned telecom licences. Chaos followed owing to overbidding and default. Thereafter, the sector struggled from one contention to the next, with the government and operators deadlocked by 1998. The New Telecom Policy of 1999 provided a breakthrough, tossing aside the auction bids in favour of shared revenues. After the percentage share was reduced to reasonable levels, and “Calling Party Pays” halved tariffs in 2003, mobile services grew exponentially to over 725 million subscribers by 2010. Interestingly, the Telecom Regulatory Authority of India estimated that auction fee foregone till March 2007 was over Rs 19,000 crore, whereas actual revenue collections were double, at Rs 40,000 crore; by March 2010, the collections were 80,000 crore.</p>
<p><strong>2000: The UK 3G auctions</strong> The 3G auction in the UK was hailed as a spectacular success, reaping bids of about $35 billion.</p>
<p><strong>2000: The France and Germany 3G auctions</strong> Germany followed, netting $67 billion, and the finance minister quipped that the auction was for unexpected revenue to pay the national debt. France demanded a flat fee of $4.5 billion per licence.</p>
<p>The dotcom bubble burst in March 2000, followed by communications and technology companies a year later, and the bidders went into a tailspin. The collapse nearly bankrupted not only British Telecom owing to the enormous debt it incurred for the bids, but the entire industry worldwide. The economic slump that followed made it impossible for firms to pay off high debts, as their interest payments increased while their ratings fell.</p>
<p>A contrarian move in France is noteworthy for its prescience and insight. CEO Martin Bouygues (pronounced “Bweeg”) of the third mobile operator, Bouygues Telecom, refused the government’s demand of $4.5 billion as the fee for a 3G licence, making it the only mobile communications company in Europe with no investment in 3G. Mr Bouygues’ letter in May 2000 appeared on the front page of Le Monde, asking: “What should I tell my employees? … That we have a choice between a sudden death and a slow one?” While his opposition was ignored, by 2002, the French government dropped its asking price by more than 85 per cent to induce Bouygues to accept a 3G licence.</p>
<p>In terms of results, the auction “failures” – the Netherlands, Switzerland, Sweden, and “non-auction” countries like South Korea, Japan and Finland (until 2009) – have the best broadband services. 2</p>
<p>Kapil Sibal’s appointment as India’s telecom minister has brought hope, with prospects of radical improvements in infrastructure, especially broadband, with a clean hand. Mr Sibal’s recent pronouncements on a new telecom policy, however, raise the spectre of another deadlock. Here are two examples: (a) “Adequate spectrum will be provided to all service providers.”</p>
<p>This is feasible not through slivers of spectrum for many operators, but only if there is a common carrier access, that is, all operators can access spectrum for a reasonable fee. There is no indication of what “adequate” means, nor of pooling or sharing spectrum.</p>
<p>Let’s hope the domain experts have been heard and not shouted down on “adequacy”. For instance, the Telecom Equipment Manufacturers’ Association had recommended that two blocks of 50 MHz each in the 698-806 MHz band be allocated to facilitate the development of wireless equipment and services. Large blocks of contiguous spectrum offer far more efficient capacity than many narrow bands. For local innovation, to get low costs, we have to think of adequacy in these terms, and not slivers of 4.4 MHz or 6.2 MHz.</p>
<p>(b) “Spectrum henceforth will be awarded only on a market-based mechanism.”</p>
<p>If the criterion for success is high bids and not delivered services, in effect, this means auctions, and the result is likely to be dismal. Those enamoured with auctions focus on the success of bids, ignoring the purpose of spectrum/licence allocation, which is service delivery resulting in consumer surplus (societal benefits).</p>
<p>If the operators choose to roll over and accept authoritarian decrees, the conflict will be between government and the public interest, as spelt out below.</p>
<p>The government’s choices include:</p>
<ul><li>a genuine effort at developing comprehensive and integrated policies for reasonably priced services, while carrying along stakeholders;</li><li>a cosmetic effort, letting stakeholders vent, and then issuing arbitrary decrees that leaves a mess. For example, too many operators with fragmented spectrum; or</li><li>attempting a political or populist fix, seeking to make the United Progressive Alliance look good, the Opposition look bad, bleeding all operators to avoid accusations of a sell-out, and still leave a mess</li></ul>
<div>The first alternative is in the public interest; the second and third are not. The issues that need comprehensive transformation are spectrum and network sharing for service delivery at least cost. The government and Mr Sibal have the opportunity to choose an approach resulting in excellent delivery including broadband at reasonable prices.</div>
<div> </div>
<div>Read the original in the Business Standard <a class="external-link" href="http://www.business-standard.com/india/news/shyam-ponappa-spectrum-auctions-/jhatka/-or-/halal//423837/">here</a></div>
<div> </div>
<div><em>The Business Standard took an <a class="external-link" href="http://www.business-standard.com/india/news/rajapraja/423972/">editorial stand</a> in support of shared spectrum and comprehensive, systemic solutions advocated in the article</em>.</div>
<p>
For more details visit <a href='https://cis-india.org/telecom/blog/jhatka-or-halal'>https://cis-india.org/telecom/blog/jhatka-or-halal</a>
</p>
No publisherShyam PonappaTelecom2012-05-10T09:57:32ZBlog EntryBig-Bang Budgets?
https://cis-india.org/telecom/blog/big-bang-budgets
<b>Clarity of planning and conceptualisation needs to be the hallmark of policy planning for the Budget, says Shyam Ponappa in this article published in the Business Standard on March 3, 2011.
</b>
<p>A good holding action in the face of turbulence is a real achievement. It’s a tremendous relief, with a positive spin. That’s what the finance minister seems to have given us with this year’s Budget. So, the glass could well turn out to be half-full, if heaven plays its part, and the demons — for example, rising oil prices because of turmoil in the Arab world — are in abeyance. For now, India’s spirits are up, and we have a shot at getting on with it. And if we don’t, heaven forefend, the government could resort to something as irresponsible as another spectrum auction (2.5 GHz for 4G/LTE) to pull itself out of the morass.</p>
<p>Given this reprieve, how best can we capitalise on it? Some of us have this notion that it is a tradition that major projects or schemes are announced at the time of the Budget. Is this a good way for the government to proceed? Are there better ways, and if so, what might they be? Also, after the Budget, several opinions reflected disappointment with the lack of big moves. What sort of actions would deserve the “Big Move” label?</p>
<p>Ignoring for the time being the FM’s statements about bills for banking, insurance and pension funds that could add up to a big bang, there was in fact a Big Move, with the ground prepared well beforehand, as it should be: the proposed cash transfer of Rs 37,000 crore allocated for kerosene, LPG and fertilisers to BPL users. This move to cash transfers will be a major change that should be for the better, despite apparent misgivings from the Left. In fact, its effect should be much more than an equivalent allocation in the previous system, with its infamous leakages. The logical extension of this process would be smart-card purchases of specified products with designated limits from any retailer, with direct rebates from the government in a single transaction. No forms, no fuss, thanks to the Unique Identification Number (UID). Next could be food subsidies of over Rs 74,000 crore through smart cards.</p>
<p>In this time of drift over several years, there has been an apparent lack of visible leadership until the appointment of a new telecom minister after the destabilisation of the past few months. This was followed by the prime minister’s assertive statements in both houses of Parliament. Similarly, the UID thrust and the first step with cash transfers show that the government can indeed take well planned initiatives. Here we have a set of steps taken with clear objectives (although somewhat muddled in the telling), with plans being developed and executed with what we hope will manifest as high quality, on time and within Budget. So it’s possible, although not our usual practice. If only we could get more of this assertive leadership to good ends.</p>
<p>Imagine if we brought the same clarity of objectives and conceptualisation to, say, addressing the supply of energy to end users. True, this is a very difficult area because of the multiple challenges across several ministries/agencies (fuel production and distribution, transportation, power generation, transmission, distribution, pricing, state electricity boards), and our habitual malpractices as users. The approach, however, would presumably be the same as for the UID. We would start with clear objectives that are coherent, ie, not disjointed or contradictory, and undertake a systematic, multidisciplinary effort — no ivory tower geniuses — to plan and execute through a process of sound project management to achieve the desired results. This would be an end-to-end effort that would have little to do with the budget except for the annual announcement of financial allocations, once the activities and resource requirements are specified. Its fundamental characteristic would be that it would have to be an integrated systems approach to get results.</p>
<p>Most important are well planned, convergent, goal-directed activities. Whether for food storage, anganwadis, power, roads, railways, integrated energy and transport programs, or communications and broadband, the process flow needs to be defined thoroughly, and every aspect specified for our environment in the implementation plan. This process would improve the odds of achieving the objectives. For instance, if cold stores are not meshed with production and markets, or transport linkages are deficient, chances are that they will fail.</p>
<p>The process could begin at any time of the year, and not necessarily announced at budget time in the annual cycle. Once the initial approach is conceptualised and the initiative launched, the programme plans would be scoped and spelt out, and the budget estimation completed. At budget time, as with the cash transfers linked to the UID, there would be an allocation of funds for the activities in the next 12-month phase.</p>
<p>Now to the Railway budget: the much touted Railways desperately need rehabilitation. In view of the significant multiplier effect that the Railways have on many other sectors, the government really must reassert its leadership in the next couple of months (after the West Bengal elections?), and reclaim this crucial area of transportation. The urgent need is to reverse the atrophy over recent years, as well as to begin to build for the future, as for instance China has done, with trains that take passengers over 1,000 km in three hours.*</p>
<p style="text-align: center; "><img src="https://cis-india.org/home-images/TrainBulletTraininChinaNYTFeb22011.jpg/image_preview" title="Train bullet" height="209" width="400" alt="Train bullet" class="image-inline image-inline" /></p>
<p>To conclude, it is time the government took one infrastructure sector or programme at a time, including education/vocational education/continuing education, and developed clear, goal-driven plans to provide the framework for the next budget session.</p>
<p>* 'China Sees Growth Engine in a Web of Fast Trains', Keith Bradsher, New York Times, February 12, 2010:</p>
<p>Read the original article in the Business Standard <a class="external-link" href="http://www.business-standard.com/india/news/ltbgtshyam-ponappaltbgt-big-bang-budgets/427056/">here</a></p>
<p>
For more details visit <a href='https://cis-india.org/telecom/blog/big-bang-budgets'>https://cis-india.org/telecom/blog/big-bang-budgets</a>
</p>
No publisherShyam PonappaTelecom2012-07-26T10:10:21ZBlog EntryIndia's untapped potential: Are a billion people losing out because of spectrum?
https://cis-india.org/telecom/blog/untapped-potential
<b>As one of the world’s fastest growing economies and with over 65% of its billion-plus population under 35, India has huge potential. But according to Shyam Ponappa of the Centre for Internet & Society, its spectrum management – the electromagnetic waves that are used from home appliances like microwaves and remote controls, to radios, cell phones, and of course, the internet – could be a huge barrier to the country’s economic and social development.</b>
<p>Until the global economic downturn that began about two years ago, the economic model for spectrum distribution in India and many developing countries was based on the free market. But Ponappa demonstrates in a <a class="external-link" href="http://www.apc.org/en/node/11864/">new report </a>for APC that spectrum is worth treating as a public utility the way we do roads, electricity and other basic infrastructure, which would allow for people in rural areas to access spectrum-dependant services like mobile phones and wifi and increase quality of services for all.</p>
<p>Currently in India, as in most other countries, spectrum is being treated as a property, where “chunks” of spectrum are sold to the mobile phone and telecommunications operators with the highest bid. Commonly there are 3 – 4 operators in a developed country; however, in India there are up to sixteen. The extreme competition has resulted in the Indian bidders paying outrageous fees that they are never able to recuperate. So while the <a class="external-link" href="http://www.apc.org/en/glossary/term/353">government</a> makes a profit on the sale, this profit comes at a societal cost.</p>
<p>Ponappa proposes pooling spectrum and to have a set of network providers, who in turn serve operators for retail users. This effectively opens up the spectrum and could make costs ten or fifteen times cheaper than they are now.</p>
<p>“It is appropriate to push the concept of open spectrum in developed markets who underwent their development phase some 60 – 100 years ago and put in place basic infrastructure systems. But in countries like India and the Asian sub-continent, it does not make sense to do this because we are not at the same stage of economic development,” Ponappa told APCNews.</p>
<p>“When markets are well structured and organised,” he continues, “[<a class="external-link" href="http://www.apc.org/en/glossary/term/353">government</a> control] can be less effective and efficient for society as a whole, compared with open competition. However developing economies don’t have the integrated systems in place that advanced economies do. India does not have an adequately developed network of copper, optical <a class="external-link" href="http://www.apc.org/en/glossary/term/293">fibre</a> or microwaves covering most of its population. And we are at a stage of development at which infrastructure is a fundamental determinant of productivity, as well as of a reasonable quality of life.”</p>
<p>Ponappa argues that in India’s case it would be advisable for governments to work with other stakeholders – corporations, <a class="external-link" href="http://www.apc.org/en/glossary/term/354">state</a>-owned agencies, and civil society – on a collaborative solution. “It would be much more conducive to a sound economy to have either the <a class="external-link" href="http://www.apc.org/en/glossary/term/353">government</a> step in and open up the commercial spectrum, or to have two to three main operators (possibly subsidised, but not necessarily) as we do with the provision of utilities,” he says. Yet, the free market mentality continues to reign, and a surfeit of operators is trying to make a profit in the telecommunications <a class="external-link" href="http://www.apc.org/en/taxonomy/term/325">wireless</a> sector.</p>
<h3>Everybody wants a piece of the pie</h3>
<p>In India, every operator is assigned a sliver of spectrum for their exclusive use and the rest is assigned to the government, the public sector and defence.</p>
<p>The result is high-cost infrastructure for operators (setting up networks with multiple sets of more advanced equipment because of the limited spectrum, with the capital constraints resulting in less extensive networks in rural areas) as well as for users (who have to pay for all this equipment).</p>
<p>“Too many operators make for increased capital costs for each operator, and cumulatively for all operators,” Ponappa explains.</p>
<p>And these higher costs are increasingly difficult to recover from consumer-generated revenue, as India undergoes huge price wars. Many operators may eventually go bankrupt. While no consumers ever complain about low costs –and India has some of the world’s lowest mobile rates– they will complain about poor quality and unreliable service. Consequently, consumers may not have to pay much to use mobile services, but they may not always be able to make or receive calls when they need to, and do not have access to broadband.</p>
<p>While most countries have moved on to 3G networks (which has more capacity for a given spectrum band than 2G, meaning better call quality) as many as four of India’s sixteen operators have not even developed their 2G networks. Making the switch to 3G seems like a good idea, but there are substantial costs associated with deploying these more advanced techniques to both operators (for network upgrades) and for end users (in terms of new handsets).</p>
<p>Too much competition in this case has made operators inefficient.</p>
<h3>Spectrum as a national common good</h3>
<p>If spectrum were treated as if it were a public utility, posits Ponappa, each operator would have access to a bigger chunk of spectrum, and the traffic-handling capacity of each would increase at a lower cost.</p>
<p>“With the current model the capacity of networks is suffering because networks cannot afford to expand or make technical improvements without economic losses. Other infrastructure services such as electricity and water supply are managed by utility companies, which are typically monopolies for a product-segment, or duopolies for purposes of competition. So why not treat spectrum the same way?” suggests Ponappa.</p>
<p>Ponappa suggests treating networks, and spectrum as a part of networks, as we would an oil pipeline, where everyone accesses the same one, and pays a fee for its use.</p>
<p>This would bring more people onto the network and increase revenues, since operating costs would be shared. The more revenue it can generate, the more efficient operators will be, using the same high-capacity circuits. The more revenue the main operators have, the more they could invest in up-to-date technology to extend their networks and provide a better service to clients. The better the technology, the more people could access the <a class="external-link" href="http://www.apc.org/en/taxonomy/term/258">internet</a> and other now vital sources of information, as well as focus on broadband and infrastructure to the country’s isolated rural areas, which today have rudimentary communications infrastructure.</p>
<h3>India’s rural populations, the lost resource</h3>
<p>As a predominantly rural country, lack of basic IT infrastructure means that the largest segment of India’s population has no <a class="external-link" href="http://www.apc.org/en/taxonomy/term/300">access to information </a>and communications technologies.</p>
<p>Ponappa grew up on a farm in a rural area some 200 km from Bangalore where even fixed line phone networks were unreliable. “We have multiple telephone lines because we never know which one will work,” he says.</p>
<p>Given India’s massive rural population, this means that there are hundreds of millions of people that are unable to access the internet. Services like quality distance education are not even an option if basic infrastructure such as fixed telephone lines is not in place and the country itself is losing out on the incalculable potential of this untapped human resource.</p>
<p>Download the report <a href="https://cis-india.org/telecom/publications/india-untapped-potential" class="internal-link">here</a> [pdf - 280 kb]</p>
<p>See the report in the APC <a class="external-link" href="http://www.apc.org/en/pubs/research/open-spectrum-development-india-case-study">website</a></p>
<p><i>This article was written as part of the APC’s project work on </i><a class="external-link" href="http://www.apc.org/en/node/10445/"><i>Spectrum for development</i></a><i>, an initiative that aims to provide an understanding of spectrum regulation by examining the situation in Africa, Asia and Latin America.</i></p>
<p>Photo by <a class="external-link" href="http://www.flickr.com/photos/kiwanja/3170290086/">kiwanja</a>. Used with permission under Creative Content licensing.</p>
<p>
For more details visit <a href='https://cis-india.org/telecom/blog/untapped-potential'>https://cis-india.org/telecom/blog/untapped-potential</a>
</p>
No publisherShyam PonappaTelecomFeatured2012-12-14T10:31:43ZBlog EntryNTP 2011 Objective: Broadband
https://cis-india.org/telecom/blog/ntp-2011-objective
<b>The Indian government has to choose between accessible, affordable services and short-term revenue, writes Shyam Ponappa in this article published in the Business Standard on June 2, 2011.</b>
<p>Apart from the scams, confused ideas are roiling India’s telecom sector. One instance is the finance ministry urging spectrum auctions to collect Rs 30,000 crore to help bridge the fiscal deficit. Another is the Ashok Chawla committee recommending spectrum auctions for transparency, making transparency the criterion for managing spectrum. The committee apparently does not mention the disastrous US auction, and attributes the UK fiasco to extraneous reasons; presumably, they knew the facts. Such issues need logical and systematic remedies. Otherwise, the success of the telecom sector will degenerate into yet another failure.</p>
<ul>
<li>Objectives: the transaction should be structured in the public interest;</li>
<li>A life-cycle analysis of costs and benefits, and not just windfall revenues (since short-term cash drives the finance ministry’s concerns, it is important for the ministry and the government to step back and consider alternatives, such as the sale of BSNL’s vast real estate. If the goal is ubiquitous and affordable broadband, this would be much less damaging to the public interest than spectrum auctions); and</li>
<li>End-to-end solutions are required from an integrated systems perspective.</li>
</ul>
<h2>The New Telecom Policy ’11</h2>
<p>For the New Telecom Policy 2011 (NTP ’11), the first requirement is to define convergent goals. We could take a leaf from countries with excellent broadband that built high-quality next generation networks. While the US and UK have strong initiatives, Japan, Sweden, South Korea and Finland have highly rated broadband. Australia and Singapore are now building next-generation networks. Both are common-access, open-to-all service providers.</p>
<h3>Spectrum Management</h3>
<p>In India we must begin with unravelling the mess of spectrum management. There are two separate skeins. Legacy issues of irregularities and scams form one stream, to be dealt with by the process of law. On the other hand, policies for next-generation networks need a process of stakeholder workouts to deliver services. Broadly, there are two ways of approaching spectrum management. One is to allocate specified bands for exclusive use, as was customary until now. An alternative is to create a common spectrum pool for use by all service providers. In other words, any provider can dynamically access spectrum for carrying voice, image and/or data. This method of dynamic spectrum access is now feasible, and the US is starting off with TV white space. The Federal Communications Commission has appointed nine companies including Spectrum Bridge and Google as database administrators; a tenth, Microsoft, is under consideration. India could start out on this if the government chooses the objective of accessible and affordable services.</p>
<h2>Network vs Revenue</h2>
<p>The choice is between building/configuring a high-quality, least-cost network and high short-term government collections. Over a longer period, a restrained approach emphasising networks and services is likely to be superior to aggressive government fees, as we found with NTP ’99 — revenue sharing resulted in explosive growth together with higher collections than the amount foregone from licence fees (see data from the Telecom Regulatory Authority of India and the Comptroller and Auditor General2).</p>
<p>How can the government evaluate this trade-off? The diagram below outlines alternative approaches to spectrum allocation and the likely outcomes. The outcomes should be evaluated as public interest costs and benefits.</p>
<p><img src="https://cis-india.org/home-images/costs.jpg/image_preview" alt="Costs" class="image-inline image-inline" title="Costs" /></p>
<p>The first step is to choose between exclusive spectrum use and common access. Exclusive use entails allocation through auctions; methods like first come, first served (FCFS); or “beauty contests”, for example, the evaluation of stipulated criteria such as technology, financial capacity and so on. Auctions are transparent. Common access, too, is completely transparent, provided the usage and payment systems have integrity.</p>
<p>If there are few operators (three or four), each can be allocated 20 MHz or more for exclusive use. In such circumstances, the relative merits are not obvious. However, in an emerging economy like India – without a ubiquitous network and with too little spectrum distributed among many operators – the logical choice for efficient spectrum management is common access.</p>
<p>Auctions often lead to service deprivation because of high costs (the “winner’s curse”). However, there are exceptions, where bidding is kept reasonable, as in Finland, or France because of its timing, after the fiasco of the European auctions. The other alternatives, FCFS or beauty contests, can result in low or high costs depending on government policies. High fees ratchet up costs with windfall gains to government in the short term, but users are deprived of these funds for networks and services. For example, in India, while the government collected nearly Rs 1,03,000 crore for 3G and broadband wireless access auctions, new facilities and services have been slow. Instead, this spectrum is largely used to support 2G users.</p>
<p>Low fees would have improved the odds of high-quality and low-cost facilities, affordable pricing, and better coverage. The government, however, would have lost its short-term windfall gains.</p>
<p>Once the government sets the objective of affordable, high-quality services, the next steps will be:</p>
<ul>
<li>Spectrum allocation and management</li>
</ul>
<p>The decision criteria are:</p>
<ol>
<li>Technology: The rationale for optimal channel width is that with lower capital cost there is greater throughput with a 20 MHz band than with several smaller bands.</li>
<li>Economics: The capital cost of shared facilities through common access is far lower than if each operator invested in separate access networks.</li>
<li> Practical results: High-quality broadband in countries like Japan, Sweden and South Korea was built without spectrum auctions.</li>
<li>Carbon footprint and resources: Both are minimised with shared facilities, such as towers and equipment.</li>
</ol>
<p>These reasons make common spectrum the logical choice, as against auctions for exclusive allocations.</p>
<p> </p>
<ul>
<li>Common network</li>
</ul>
<p> </p>
<p><img src="https://cis-india.org/home-images/TreeCommon_Spectrum__NetworkJun_7_2011.jpg/image_preview" alt="Tree " class="image-inline image-inline" title="Tree " /></p>
<p> </p>
<p>A common network is, therefore, a logical and environmentally sound choice. The question is how best to own and operate it.</p>
<p> </p>
<pre>Notes</pre>
<ol>
<li>E.g. see: "Winner’s Curse", Chris Anderson, Wired, May ’02:<a class="external-link" href="http://www.wired.com/wired/archive/10.05/change.html">http://www.wired.com/wired/archive/10.05/change.html</a></li>
<li>Trai’s estimate of foregone revenues by March ’07: under Rs 20,000 crore: “Indicators for Telecom Growth”, Trai, ’05: <a class="external-link" href="http://www.trai.gov.in/trai/upload/StudyPapers/2/ir30june.pdf">http://www.trai.gov.in/trai/upload/StudyPapers/2/ir30june.pdf</a><br /><i>Revenue share collections by March ’07: Rs 40,000 crore; by March ’10: Rs 80,000 crore: "Performance Audit Report on the Department of Telecommunications, Ministry of Communications and Information Technology"</i>, <a class="external-link" href="http://saiindia.gov.in/cag/union-audit/report-no-19-performance-audit-issue-licences-and-allocation-2g-spectrum-department-tele">http://saiindia.gov.in/cag/union-audit/report-no-19-performance-audit-issue-licences-and-allocation-2g-spectrum-department-tele</a><br /><br />Read the original <a class="external-link" href="http://organizing-india.blogspot.com/2011/06/ntp-2011-objective-broadband.html">here</a></li>
</ol>
<p>
For more details visit <a href='https://cis-india.org/telecom/blog/ntp-2011-objective'>https://cis-india.org/telecom/blog/ntp-2011-objective</a>
</p>
No publisherShyam PonappaTelecom2012-07-26T10:09:17ZBlog EntryResponse to TRAI Consultation paper No. 6/2009
https://cis-india.org/telecom/blog/response-to-trai-consultation-paper
<b>CIS Distinguished Fellow, Shyam Ponappa, provides a detailed response to the Telecom Regulatory Authority of India's Consultation paper No. 6/2009 "Overall Spectrum Management and review of license terms and conditions". Shyam Ponappa is suggesting that, the TRAI approach the telecom policy in a manner which will facilitate greater user access and, more generally, be designed to serve the public interest in the long-term. </b>
<p>Shyam Ponappa November 12, 2009<br />Distinguished Fellow<br />Centre for Internet & Society<br />Bangalore/New Delhi<br />cis-india.org</p>
<p><a href="mailto:shyamponappa@gmail.com">shyamponappa@gmail.com</a></p>
<p>Telecom Regulatory Authority of India<br />Attn: Sh. Sudhir Gupta, Advisor (MN)<br />Mahanagar Doorsanchar Bhawan<br />Jawahar Lal Nehru Marg, New Delhi-110 002<br />Tel. No.011-23220018 , Fax No.011-23212014</p>
<p>E-mail : <a href="mailto:advmn@trai.gov.in">advmn@trai.gov.in</a> </p>
<h2 style="text-align: center;"><u><a href="https://cis-india.org/telecom/TRAI%20CP%20Response-Nov%2012%202009.pdf" class="internal-link" title="TRAI response">TRAI Consultation paper No. 6/2009- October 16, 2009</a></u></h2>
<h2 style="text-align: center;"><u>"Overall Spectrum Management and review of license terms and conditions"</u></h2>
<p><br />Sir,</p>
<p>It would help to have a logical framework that defines overall objectives, prioritizes issues, and structures and organizes issues and questions. This would facilitate analysis and response, as we have attempted below.</p>
<p>We begin by responding to Question 57 as a preamble to all the questions:</p>
<p>57. What in your opinion is the desired structure for efficient management of spectrum?<br />[This question addresses only one of two essential criteria, efficiency. The other criterion is effectiveness; both need equal emphasis.]</p>
<p>Please see separate attachment for answers to Questions 1-56.</p>
<h3>Status</h3>
<p>Currently, communications services in India comprising Internet, voice and SMS have the following attributes:</p>
<ol start="1"><li>Low broadband usage, with relatively high prices: eg, direct satellite TV subscriptions at Rs. 200/month, compared with 512 kbps Internet at Rs. 1,000/month.</li><li>Fragmented spectrum allocation for exclusive use by each operator in a service area.</li><li>Very high intensity of spectrum use by operators compared with international norms because of constrained availability.</li><li>Too many operators per service area (11-14 or more [15-16 with all potential operators with GSM and CDMA counted separately], versus the global average of 4-5).</li></ol>
<p>[For details on (2), (3) and (4), please see: 'An assessment of spectrum management policy in India', David Lewin, Val Jervis, Chris Davis, Ken Pearson, Plum Consulting, December 2008<br /><a href="http://www.plumconsulting.co.uk/pdfs/GSMA%20spectrum%20management%20policy%20in%20India.pdf"><u>http://www.plumconsulting.co.uk/pdfs/GSMA%20spectrum%20management%20policy%20in%20India.pdf</u></a>]</p>
<h3>Needs</h3>
<p> Our needs are:</p>
<ul><li>good services for Internet, voice and SMS,</li><li>at reasonable prices, eg, comparable pricing for TV and broadband,</li><li>accessible from/to most households across the country.</li></ul>
<p>The need is especially great in rural areas, as broadband can be the medium for delivery of essential services like education (from basic to advanced to vocational training and Continuing Education at all levels, including high-level professional CE), health (again, from basic diagnostics and monitoring at home, to advanced care at adequately equipped centres), and security and law-and-order services at significantly higher levels than is possible without excellent communications infrastructure.</p>
<p>In view of the above, we suggest that the Government of India consider adopting the following policy goals in the public interest ( and therefore, that where appropriate, the TRAI set these objectives/make appropriate recommendations to the GOI).</p>
<h3>Suggested Policy Goals/Objectives [based on needs]</h3>
<ol start="1"><li>Adopt the criteria of long-term net benefits in the public interest for decisions, eschewing short-term cash collections from auctions and fees.</li><li>An approach to policies for telecommunications services (not for broadcasting) that limits the number of operators per service area in line with international experience, because of the economics of networks.<br />[This implies an explicit reversal of prior policies to maximize competition, and requires allowing for consolidation through mergers and acquisitions.]</li><li>Access to broadband (to be defined as at least 512 kbps in keeping with international norms) at all feasible locations in the country for all users.</li><li>Develop incentives and penalties favouring good rural service provision, with the emphasis on broadband: an Administered Incentive Pricing mechanism.</li><li>Explore ways to structure policies to reduce costs/maximize utility through facilities and resource sharing, so that prices can be reduced while maintaining good scope for investment from growth and profits.<br /><br />This implies two areas of exploration:<br />a) Shared use of facilities and equipment/networks;<br />b) Shared use of spectrum.<br /><br />(i) This is best done by collaborative consultations between experts (from the GOI, private sector and academia), operators, equipment providers, and government. Without the requisite interdisciplinary skills combined with operating expertise and investment capability, the effort is too complex for an iterative, serial consultation process.<br />(ii) Even within the GOI, this requires interdisciplinary and cross-jurisdictional convergence, both to develop solutions as well as to implement them.<br />(iii) This also needs GOI initiatives to invite companies like Ericsson, Nokia, Motorola and Qualcomm as well as Google and Intel, possibly cable companies like Liberty Global, and electricity companies that deliver Internet through their networks.<br />(iv) The GOI also needs to depute experienced representatives from various ministries and departments including the WPC, the Defence Services, and specialist agencies such as the DRDO/NTRO.<br />[Please see ‘Managing Spectrum’ in the <em>Business Standard</em> November 5, 2009, and related references: <a href="http://organizing-india.blogspot.com/2009/11/managing-spectrum.html"><u>http://organizing-india.blogspot.com/2009/11/managing-spectrum.html</u></a>]</li><li>Monitor operations online and intervene actively where revenues (the totality of rates/tariffs) are far above total costs, i.e., profits are unreasonable. This is a necessary adjunct to accepting a monopolistic/oligopolistic market structures.</li></ol>
<h3>Suggested Approach</h3>
<p>The use of a decision tree as in the ‘Issue Map for Spectrum & Broadband’ below (please see Exhibit) facilitates a logical sequence and prioritization in exploring alternatives. (Please note that this is for broadband, voice and SMS, and not for broadcasting.) A similar exploration process for networks and facilities (sharing versus exclusive use for delivery) could follow. However, stakeholders should be free to use any analytical process to improve on this in the common interest.</p>
<p>Once decisions are taken on these two issues (spectrum and network/ facilities sharing), other issues like pricing and consolidation can be logically addressed based on these decisions, probably within the scope of existing laws and regulations.</p>
<p>New regulations or laws should be considered only after comprehensive analysis on the lines of Project LARGE (Legal Adjustments and Reforms for Globalising the Economy by Sh. Bibek Debroy).</p>
<p align="center"> <a href="https://cis-india.org/telecom/TRAI%20consultation.jpg" class="internal-link" title="TRAI">Exhibit: Issue Map on Spectrum & Broadband </a></p>
<p align="center"><img class="image-inline image-inline" src="../../igov/others/uploads/copy_of_shayamzoom.jpg/image_preview" alt="Issue Map on Spectrum & Broadband" height="251" width="400" /></p>
<p> </p>
<p>Shyam Ponappa<br />Centre for Internet & Society<br />cis-india.org</p>
<p><a href="https://cis-india.org/telecom/TRAI%20CP-Q%201-57-Nov%2012%202009.pdf" class="internal-link" title="TRAI - consultation Q 1- 57">Attachment – Question 1-57</a></p>
<p><a href="https://cis-india.org/telecom/TRAI%20CP%20Response-Nov%2012%202009.pdf" class="internal-link" title="TRAI response">TRAI Consultation paper</a> No. 6/2009 – October 16, 2009</p>
<p>Overall Spectrum Management and review of license terms and conditions</p>
<p align="left"><strong>Chapter 1<br /></strong><strong>Spectrum requirement and availability</strong></p>
<ol type="1" start="1"><li>Do you agree with the subscriber base projections? If not, please provide the reasons for disagreement and your projection estimates along with their basis?<br /><strong>Do not disagree.</strong></li><li>Do you agree with the spectrum requirement projected in ¶ 1.7 to ¶1.12? Please give your assessment (service-area wise).<br /><strong>Agree if exclusive bands of spectrum are used by different operators, and the spectrum requirement is linked to subscribers. Disagree if common use of spectrum is adopted. Please see preamble (reply to Question 57) for details of shared/pooled spectrum approach.</strong></li><li>How can the spectrum required for Telecommunication purposes and currently available with the Government agencies be re-farmed?<br /><strong>(a) By rationalizing usage, as advocated in the preamble for commercial operators, by pooling spectrum for common use where possible.<br />(b) By inducting equipment that allows more efficient usage and usage of other bands.</strong></li><li>In view of the policy of technology and service neutrality licences, should any restriction be placed on these bands (800,900 and 1800 MHz) for providing a specific service and secondly, after the expiry of present licences, how will the spectrum in the 800/900 MHz band be assigned to the operators?<br /><strong>(a) Please see suggestions on shared/pooled spectrum as above.<br />(b) In the event that common use of spectrum is infeasible/not accepted by the Government of India, and exclusive bands of spectrum are assigned to operators as is the practice now, work out ways to consolidate fragmented bands (other than through M&A) for operators, to enable operators to hold contiguous bands for greater efficiency, and explore shared use of pooled spectrum.</strong></li><li>How and when should spectrum in 700 MHz band be allocated between competitive services?<br /><strong>Preferred method: for common use (can be pooled or shared even if assigned for exclusive use, immediately).</strong></li><li>
<p align="left">What is the impact of digital dividend on 3G and BWA?<br /><strong>Should extend its reach and access because of lower costs.<br /></strong><br /><strong>Chapter 2<br />Licensing Issues</strong></p>
</li><li>Should the spectrum be delinked from the UAS Licence? Please provide the reasons for your response.<br /><strong>If spectrum is treated as a common resource, the logical requirement is for a linkage that is not dependent on ownership, but to access for service delivery, i.e., common access.</strong></li><li>In case it is decided not to delink spectrum from UAS license, then should there be a limit on minimum and maximum number of access service providers in a service area? If yes, what should be the number of operators?<br /><strong>Follow global practice: do not exceed five operators in any service area unless there are compelling reasons to do so.</strong></li><li>What should be the considerations to determine maximum spectrum per entity?<br /><strong>Minimum contiguous band for effective rollout and efficient delivery, i.e., inexpensive capital outlay for equipment and towers/network while maintaining Quality of Service.</strong></li><li>Is there a need to put a limit on the maximum spectrum one licensee can hold? If yes, then what should be the limit? Should operators having more than the maximum limit, if determined, be assigned any more spectrum?<br /><strong>This depends on the overall approach to spectrum management, i.e., common use, or exclusive use. The logic for a limit is effective delivery capability at ‘normal’ cost. There is no logic for assigning more than this. However, if spectrum is for common/shared use, the only criterion is throughput/capacity.</strong></li><li>If an existing licensee has more spectrum than the specified limit, then how should this spectrum be treated? Should such spectrum be taken back or should it be subjected to higher charging regime?<br /><strong>As in No. 10. If common/shared spectrum use is adopted, there needs to be a transition worked out, as in the transition to revenue sharing.</strong></li><li>In the event fresh licences are to be granted, what should be the Entry fee for the license?<br /><strong>The principles followed should be:<br />(a) Low license fees to minimize access costs.<br />(b) Provided licenses are delinked from spectrum and few in number, there need to be strict rollout requirements.<br />(c) Incentives for broadband and rural coverage in the form of a structured Administrative Incentive Pricing mechanism.<br />(d) Penalties for failure.</strong></li><li>In case it is decided that the spectrum is to be delinked from the license then what should be the entry fee for such a Licence and should there be any roll out condition?<br /><strong>As in No. 12.</strong></li><li>Is there a need to do spectrum audit? If it is found in the audit that an operator is not using the spectrum efficiently what is the suggested course of action? Can penalties be imposed?<br /><strong>(a) Operating attributes should be monitored online on a continuous basis.<br />(b) Spectrum use probably needs to be monitored as an operating attribute.<br />(c) Penalties and incentives are needed, including forfeiture for continued transgression.</strong></li><li>Can spectrum be assigned based on metro, urban and rural areas separately? If yes, what issues do you foresee in this method?<br /><strong>This needs to be considered only if common/pooled usage is decided against. With common use or sufficiently large blocks/bands of spectrum, no problems are likely to arise.</strong></li><li>Since the amount of spectrum and the investment required for its utilisation in metro and large cities is higher than in rural areas, can asymmetric pricing of telecom services be a feasible proposition?<br /><strong>Yes. <br /><br />M&A issues</strong><br /><strong>If the common/shared use approach is adopted, M&A can be under existing laws and regulations.</strong></li><li>Whether the existing licence conditions and guidelines related to M&A restrict consolidation in the telecom sector? If yes, what should be the alternative framework for M&A in the telecom sector?</li><li>Whether lock-in clause in UASL agreement is a barrier to consolidation in telecom sector? If yes, what modifications may be considered in the clause to facilitate consolidation?</li><li>Whether market share in terms of subscriber base/AGR should continue to regulate M&A activity in addition to the restriction on spectrum holding?</li><li>Whether there should be a transfer charge on spectrum upon merger and acquisition? If yes, whether such charges should be same in case of M&A/transfer/sharing of spectrum?</li><li>Whether the transfer charges should be one-time only for first such M&A or should they be levied each time an M&A takes place?</li><li>Whether transfer charges should be levied on the lesser or higher of the 2G spectrum holdings of the merging entities?</li><li>Whether the spectrum held consequent upon M&A be subjected to a maximum limit?<br /><br /><strong>Spectrum Trading</strong></li><li>Is spectrum trading required to encourage spectrum consolidation and improve spectrum utilization efficiency?<br /><br /><strong>At present, trading is required to allow consolidation. However, if a comprehensive approach is taken to spectrum use, and especially if common use through common access is established, this set of problems will no longer exist after a transition period. Nor will there be any shortage of spectrum.</strong></li><li>Who all should be permitted to trade the spectrum ?<br /><strong>As in No. 24.</strong></li><li>Should the original allottee who has failed to fulfill “Roll out obligations” be allowed to do spectrum trading?<br /><strong>There should be penalties and forfeiture for failure to meet rollout obligations, and clawbacks as an interim measure during the transition.</strong></li><li>Should transfer charges be levied in case of spectrum trading?</li><li>What should be the parameters and methodology to determine first time spectrum transfer charges payable to Government for trading of the spectrum? How should these charges be determined year after year?</li><li>Should such capping be limited to 2G spectrum only or consider other bands of spectrum also? Give your suggestions with justification.<br /><br /><strong>This question assumes there is a difference in “2G spectrum” and other spectrum, which is incorrect. The difference is in equipment that has evolved in different phases along different bands. Spectrum should be treated as technology-neutral for the purposes of service delivery. Any service should be deliverable on any band, subject to interference limitations.</strong></li><li>Should size of minimum tradable block of spectrum be defined or left to the market forces?</li><li>Should the cost of spectrum trading be more than the spectrum assignment cost?<br /><br /><strong>Spectrum sharing<br /><br />These questions are addressed in the preamble in the cover note.</strong></li><li>Should Spectrum sharing be allowed? If yes, what should be the regulatory framework for allowing spectrum sharing among the service providers?</li><li>What should be criteria to permit spectrum sharing?</li><li>Should spectrum sharing charges be regulated? If yes then what parameters should be considered to derive spectrum sharing charges? Should such charges be prescribed per MHz or for total allocated spectrum to the entity in LSA?</li><li>Should there be any preconditions that rollout obligation be fulfilled by one or both service provider before allowing the sharing of spectrum?</li><li>In case of spectrum sharing, who will have the rollout obligations? Giver or receiver?<br /><br /><strong>Perpetuity of licences</strong></li><li>Should there be a time limit on licence or should it be perpetual?</li><li>What should be the validity period of assigned spectrum in case it is delinked from the licence? 20 years, as it exists, or any other period</li><li>What should be the validity period of spectrum if spectrum is allocated for a different technology under the same license midway during the life of the license?</li><li>If the spectrum assignment is for a defined period, then for what period and at what price should the extension of assigned spectrum be done?</li><li>If the spectrum assignment is for a defined period, then after the expiry of the period should the same holder/licensee be given the first priority?<br /><br /><strong>Uniform License Fee</strong></li><li>What are the advantages and disadvantages of a uniform license fee?</li><li>Whether there should be a uniform License Fee across all telecom licenses and service areas including services covered under registrations?</li><li>If introduced, what should be the rate of uniform License Fee?<br /><br /><strong>License fees should be treated as part of the overall scheme of Administered Incentive Pricing.<br /><br />Chapter 3<br />Spectrum assignment</strong></li><li>If the initial spectrum is de-linked from the licence, then what should be the method for subsequent assignment?<br /><strong>Please see comments on common/shared use in the preamble in the cover note.</strong></li><li>If the initial spectrum continues to be linked with licence then is there any need to change from SLC based assignment?<br /><strong>The SLC basis for spectrum assignment gives rise to many distortions and is not in line with international practices.</strong></li><li>In case a two-tier mechanism is adopted, then what should be the alternate method and the threshold beyond which it will be implemented?</li><li>Should the spectrum be assigned in tranches of 1 MHz for GSM technology? What is the optimum tranche for assignment?</li><li>In case a market based mechanism (i.e. auction) is decided to be adopted, would there be the issue of level playing field amongst licensees who have different amount of spectrum holding? How should this be addressed?</li><li>In case continuation of SLC criteria is considered appropriate then, what should be the subscriber numbers for assignment of additional spectrum?</li><li>In your opinion, what should be the method of assigning spectrum in bands other than 800, 900 and 1800 MHz for use other than commercial?<br /><br /><strong>Spectrum pricing</strong></li><li>Should the service providers having spectrum above the committed threshold be charged a one time charge for the additional spectrum?</li><li>In case it is decided to levy one time charge beyond a certain amount then what in your opinion should be the date from which the charge should be calculated and why?</li><li>On what basis, this upfront charge be decided? Should it be benchmarked to the auction price of 3G spectrum or some other benchmark?</li><li>Should the annual spectrum charges be uniform irrespective of quantum of spectrum and technology?</li><li>Should there be regular review of spectrum charges? If so, at what interval and what should be the methodology?<br /><br /><strong>Structure for spectrum management</strong></li><li>What in your opinion is the desired structure for efficient management of spectrum?<br /><br /><strong>Please see the preamble in the cover note.</strong></li></ol>
<p> </p>
<p>Shyam Ponappa<br />Centre for Internet & Society<br />cis-india.org</p>
<p>November 12, 2009</p>
<p> </p>
<p> </p>
<p>
For more details visit <a href='https://cis-india.org/telecom/blog/response-to-trai-consultation-paper'>https://cis-india.org/telecom/blog/response-to-trai-consultation-paper</a>
</p>
No publisherradhaTelecomSubmissions2011-08-24T08:06:46ZBlog Entry