Shyam Ponappa | February 4, 2015
With the economic mood having swung in India's favour, partly by inspired effort and partly by the luck of falling prices for oil and commodities, how can we effectively capitalise on our disorderly yet undeniable potential? Asked by Prime Minister Narendra Modi last October what could be done to promote business in India, the chief executive of Siemens, Joe Kaeser, reportedly said: (a) prioritise, and (b) take one step at a time. Surely good advice, and not just for promoting business and growth.
There's a subtext in that terse advice that we and our governments would do well to deconstruct and internalise. And that is the underlying discipline, process orientation and order in the German work ethic that produces high quality. Other attributes such as thoroughness and being result-oriented come to mind, all of which would do us well, but an essential precondition is the discipline of meticulous, step-by-step process planning and execution for results.
In other words, there are explicit activity flows that extend from where one is to where one hopes to be, the desired ends, delineated in flowcharts that underlie integrated systems. After prioritising and goal-setting, it is these detailed steps that must be articulated before starting out on the first step. This applies to Digital India as much as to any other initiative, such as Swachh Bharat, or energy or transport development.
Where and how do we begin to prioritise? With a focus on productivity, because that may be the best way to escape the boom-to-seven-or-eight-per-cent-gag-on-inflation-bust cycle. To this end, if we can get more things right in infrastructure especially relating to communications to begin with, it will enable growth with less risk of asset bubbles and demand-driven inflation.
To materialise, improvement in communications will need to be in combination with some level of improvement in energy and transport/logistics, to the point where gains from communications are realised. This is likely to happen by improving the extent of realisation for efforts and inputs, through productivity gains from such areas as, for instance, online education, transactions and logistics tracking. In sectors such as healthcare or tourism, productivity could improve with online transactions relating to accommodation, transport and procedures/events. Obviously, there need to be satisfactory facilities and services available to users in these sectors, without which there will be few gains.
The reason for starting with communications is that returns on investment tend to accrue sooner and for a lower magnitude of investment than from other capital-intensive infrastructure such as energy or transport. In addition, this potential is enhanced by the likelihood of significant pay-offs from purely administrative and/or legal changes. This is possible because legacy developments in India in communications are such that the same assets and capital expenditure can result in greater delivery capability - capacity and throughput - from "simply" changing the administrative rules, that is, by framing enabling regulations.
A case in point is the opposition by the department of telecommunications (DoT) to 3G roaming. This kind of restriction results in a reduction in output from investment, because available capacity (that is, a readily usable service) is constrained. Is it likely that the DoT would intentionally deprive the economy of the productivity gains from roaming? Or is it more likely that the motivation to protect the position of the public sector companies, Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL), and the fear of being accused of giveaways to operators after the accusations in the 2G spectrum scandal have hamstrung decision-making that would be more beneficial for the common good?
Constraints such as these seriously hamper the scope of Digital India, an initiative that would add hugely to productivity when India sorely needs greater enabling capacity for a larger number of young people. Yet high-speed internet, the first item in the Digital India vision statement (deity.gov.in/sites/upload_files/dit/files/Digital India.pdf), doesn't appear to be getting the step-by-step, detailed flowchart approach that will help get us there, despite the hoopla.
Consider the evidence:
To materialise, improvement in communications will need to be in combination with some level of improvement in energy and transport/logistics, to the point where gains from communications are realised. This is likely to happen by improving the extent of realisation for efforts and inputs, through productivity gains from such areas as, for instance, online education, transactions and logistics tracking. In sectors such as healthcare or tourism, productivity could improve with online transactions relating to accommodation, transport and procedures/events. Obviously, there need to be satisfactory facilities and services available to users in these sectors, without which there will be few gains.
The reason for starting with communications is that returns on investment tend to accrue sooner and for a lower magnitude of investment than from other capital-intensive infrastructure such as energy or transport. In addition, this potential is enhanced by the likelihood of significant pay-offs from purely administrative and/or legal changes. This is possible because legacy developments in India in communications are such that the same assets and capital expenditure can result in greater delivery capability - capacity and throughput - from "simply" changing the administrative rules, that is, by framing enabling regulations.
A case in point is the opposition by the department of telecommunications (DoT) to 3G roaming. This kind of restriction results in a reduction in output from investment, because available capacity (that is, a readily usable service) is constrained. Is it likely that the DoT would intentionally deprive the economy of the productivity gains from roaming? Or is it more likely that the motivation to protect the position of the public sector companies, Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL), and the fear of being accused of giveaways to operators after the accusations in the 2G spectrum scandal have hamstrung decision-making that would be more beneficial for the common good?
Constraints such as these seriously hamper the scope of Digital India, an initiative that would add hugely to productivity when India sorely needs greater enabling capacity for a larger number of young people. Yet high-speed internet, the first item in the Digital India vision statement (deity.gov.in/sites/upload_files/dit/files/Digital India.pdf), doesn't appear to be getting the step-by-step, detailed flowchart approach that will help get us there, despite the hoopla.
Consider the evidence:
- Our spectrum policies are unchanged, with the government expecting Rs 1 lakh crore from the coming auction. Our networks will be deprived of that investment, as they've been deprived of previous payments in spectrum auctions. One estimate is that the investments in networks and equipment, excluding spectrum, amount to $30 billion (Rs 1.8 lakh crore), while cumulative charges for spectrum also amount to the same (www.financialexpress.com/article/economy/spectrum-auction-running-out-of-cash/30603/).
Instead, if authorised operators were able to access broad swathes of spectrum on a pay-for-use basis as needed without ownership, imagine what it could do to increase investment in networks and services.
- A 2009 study by ABI Research estimated that operators could save $60 billion worldwide over the following five years from active infrastructure sharing. This assumed active sharing of the entire network, including the radio access networks (RAN) and spectrum. The estimate of incremental savings from active sharing over passive sharing was 40 per cent. If network sharing were adopted on common-carrier, pay-for-use principles, imagine how much more effective coverage in rural/less-populous areas could be, and how the payback potential would improve. A more recent article reinforces this finding, emphasising the benefits to tower companies as well as operators ("Active RAN sharing business models can bring benefits to towercos as well as operators", www.analysysmason.com/About-Us/News/Newsletter/Active-RAN-sharing-Oct2014/).
- Digital India needs to have access to more spectrum at less cost to bridge the last mile, in addition to considering other innovative approaches such as cable and satellite technologies, and TV bands that can be used for broadband delivery of TV broadcasts as well as the internet.
In sum, we need the end-to-end connectivity planned and extended beyond the National Information Infrastructure concept down to household clusters and individual households, as well as to commercial and educational units and customer service centres. The regulations and methods that enable structures, organisations and procedures that could make this possible involving government agencies, public sector units, private operators and service providers need to be worked out to get the benefits of a fully Digital India.
shyam no-space ponappa at gmail dot com
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