Column: Time for telecom 2.0

Jun 05 2014, 01:29 IST
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SummaryIndian telecom is poised to play a transformative role once again, but is being undermined by the spectrum policy

When I first joined telecom in 2006 for a period of two years, the industry was in the midst of a dramatic transformation. In just 15 years of its inception, almost every Indian had a mobile phone in his/her hand. With the latest technologies, the lowest prices and the most innovative business models, India showed the world how passion, ingenuity and entrepreneurship could create a world-class industry in a matter of years. In the process, the impact on the lives of people was profound. The result was an astonishing 5%-plus contribution to the GDP of India.

In early 2013, when I started my new job at Airtel, I went around the country and met hundreds of young consumers. Everywhere I went I saw excitement in their eyes—the excitement of using this amazing technology in newer and even more interesting ways. From entertainment to commerce to improving productivity to accessing new markets, the possibilities of what telecom, especially mobile broadband, could do to impact the lives of people were infinite. I saw the immense opportunity of telecom contributing to the economic growth of the country—yet again. Telecom was, quite simply, again at the cusp of a transformation.

Sadly, however, the excitement of the opportunity is at odds with the broken state of the industry today. The industry is saddled with over R2,50,000 crore of debt and a return on capital that makes investment questionable. Taxes and levies are up to a pernicious 30%. Penalties and fines have created an air of suspicion. Investments are pouring in but more for the artificially high cost of spectrum rather than for rollout of networks. Time is spent on litigation and a defence of hardened positions. The excitement of the broadband revolution still seems distant. There is massive opportunity for the new government led by Narendra Modi in correcting this. The good news is that it can be done. The even better news is that in just five years, consumers will be able to see a dramatic impact in their lives. All it calls for is bold and decisive action through a transparent framework that maximises the use of scarce resources and creates an enabling framework with a set of consistent, clear and non-discriminating rules. These can be achieved with a stroke

of a pen and will lead to

an outcome that is good for the economy, good

for the industry and good for the citizen.

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