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?
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.*
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
Initiative by ministry or PMO?
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:
- 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.
- A second criterion at the state level is also financial, for rights of way charges.
- 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.
- 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.
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.
Shyam (no-space) Ponappa at gmail dot com