How's my Luck now?

Reflections, views and descriptions during my stay at IIM Lucknow from July 2004 to March 2006

Name:
Location: India

Sunday, August 21, 2005

Tele-talk

We had a wonderful opportunity to listen to Mr. Pradip Baijal, Chairman, TRAI, today. He was here to judge a paper presentation contest and then delivered a keynote address. One can't have more firsthand insights about the Indian telecom sector than from him. He has been in one of the hottest seats in India for some time now, and is handling it with aplomb.

The hour-long talk was insightful, wide-ranging, humorous, and full of anecdotes. The presentation had nothing but charts and tables, and yet each number had a story behind it. Beginning with an expression of personal regret that he could not introduce power reforms when he was in the power ministry, Mr. Baijal emphasised that in a 'network industry' (power, telecom), it was extremely essential to have an independent regulator - one who does not 'cosy up to' any operator. The introduction of private competition had energised even the public sector behemoth BSNL and this was shown using comparative statistics of the telecom industry from 1948-98 and '98 onwards. Some of the important events in the history of Indian telecom were narrated in an anecdotal way - the setting up of TRAI, the initial disputes between operators, Reliance's 'breaching of the spirit of the (then existing) license', decisions on interconnect charges and calculation of termination charges (good decisions, he said, happened by accident in the government), Reliance's 501 Monsoon Hungama ('Mr. Mukesh Ambani lost Rs. 1500-1600 crores in that hungama, and the Indian newspapers viewed even this marketing debacle as a scandal' :) ), issues with the TDSAT, etc.

His emphasis was also on emerging opportunities and changing realities in the telecom sector. So far, on any year-to-year basis after introduction of mobile telephony, India had done better than China in terms of growth in subscriber numbers. But to sustain this growth, it is essential to tap rural India, where the absolute number of middle-income people equalled that in urban India. Thus, the O in USO did not stand for Obligation but for Opportunity. New technologies are rendering old obsolete. Most of BSNL's 6,70,000km fibre-optic network is dark, but BSNL is not willing to share the network with other operators for a fee, because it considers it a goldmine. Mr. Baijal said that with the arrival of wireless broadband technologies, this 'goldmine' may soon become trash. So also with the TV industry. In India, cable TV connections exceed fixed line phones. Again, broadcasters might want to consider sharing the infrastructure for penetration of telecom, since it was technologically feasible. The mobile phone might become the most attractive medium for advertisements if TV lost its sheen with the introduction of technologies like IPTV. 'Next generation networks' might become reality (see this interesting study paper), as the dividing line between mobile and fixed becomes blurred. Finally, even though all this convergence is technologically feasible, it will be extremely difficult to formulate a 'unified service license' covering fixed & mobile telecom, cable TV, ISPs, etc. because of the entrenched interest of each industry which will feel threatened and shortchanged. All the data Mr. Baijal used is available here.

Mr. Baijal seemed to be impressed with the presentations made by the students, and praised them profusely. However, as his talk went on, it became clear that at least some part of that praise was meant in a sarcastic way, because the ideas suggested were actually debunked by him. All in all, a great experience.

Mr. Saleem Haq, Head of the Prepaid Division, Reliance Infocomm, also delivered a short presentation showcasing Reliance's offerings and their foray into rural markets.

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