Empowering Gati Shakti - The Transport & Logistics Platform

Done right , the smart platform for infrastructure planning and execution could lead to tremendous productivity benefits.

Shyam Ponappa   |   November 2, 2022 

The National Master Plan for logistics development on a digital platform, Gati Shakti (Speed and Strength), was introduced in October 2021. It is a much-needed initiative to introduce effective management systems in coordinating relevant ministries for all aspects of transportation and logistics. It establishes digitised institutional processes for comprehensive, integrated project planning and execution, to assist ministries and infrastructure sectors in achieving results. The aims are more efficient outcomes at reduced cost and time. Done correctly, this will result in tremendous productivity benefits at a low cost and with better environmental impact.

A primary purpose of Gati Shakti is prioritisation for growth. Based on limited lay access (more on this later), an element that needs attention is telecommunications reform. The need is for inexpensive, higher capacity/intensity connectivity, by enabling spectrum usage for wireless and shared networks at lower capital investment with better utilisation. The platform’s effectiveness depends on this.

Gati Shakti is based on the recommendations of the National Transport Development Policy Committee1 in January 2014. Government agencies such as the railways, roads and highways, shipping, aviation, power, telecom, and so on reportedly use this for integrated planning and execution. During the past year, ministries responsible for fertiliser, coal, ports and the like reportedly identified nearly 200 “infrastructure gaps” in first-mile or last-mile logistics. An inter-ministerial expert panel monitors and recommends corrective action. Presumably, this will be tracked through the digitised database and portal, which also has geographic positioning capabilities.

Prioritisation And Policy Changes More Essential Than Capital 

As observed in an earlier column, a World Bank study across many countries validates the importance of telecommunications (and electricity) for growth.2 A report published by the Asian Development Bank Institute confirms that for India and China, internet and mobile density contribute to their high rate of growth.3

Apart from these findings from past data, telecommunications and digitisation are now essential to most aspects of living. Most importantly, telecommunications and the internet need major policy changes on network sharing and reduced taxes. These are needed even more than capital, to accelerate network coverage and delivery. Examples of changes required include permitting high-speed wireless without loading discretionary costs, such as up-front auctions, high costs for wireless links, and onerous procedures. Policy changes can reduce pricing and sticky process/procedures for operators and, ultimately, users and society as a whole. Until this is done, users are either deprived of services because they are simply not there, or constrained by erratic and low-quality services, or burdened with high charges. The impact is in many areas as indicated below:

- Environmental care & climate mitigation: Effective broadband coverage and shared networks significantly improve both.

- Education and work life reach: Extending broadband coverage to the many millions living in rural or distant areas is one obvious need. This is also true for the many urban users who endure poor services, beyond the privileged, relatively few who have fibre or reliable high-speed wireless. Undoubtedly, a whole gamut of content and methods will need to evolve to enable effective learning for less educated users, as will ways to mitigate costs to provide access. But it is probably the only way crucial services can reach so many quickly, channel our population productively and pre-empt their degeneration into disruptive problem creators. This will open education to many more boys and girls, and employment opportunities to men and women.

-  Similar benefits are feasible in areas such as e-commerce, distributed healthcare, government services, in small and medium manufacturing and services enterprises for work process support systems, and entertainment.

Temples to Metaphysics and Physics

In the 1890s, Acharya Jagadish Chandra Bose (Sir Jagadis Chandra Bose) demonstrated wireless technology at 60 GHz (V-band),4 but his pioneering work languished in India. Meanwhile, countries such as the USA, the UK and others, including China, have exploited this technology for high-speed gigabit wireless in their networks in place of fibre.

Much time and public resources are devoted to overt religiosity in India. Whereas Bose, scientist extraordinaire, in his inaugural address dedicated the Bose Institute in Kolkata in 1917 as not merely a laboratory but a temple. Adding Paramahansa Yogananda’s “keen interest in evidence that India can play a leading part in physics, and not metaphysics alone”, we would do well to apply more physics and science—as in using wireless technology in our networks, and having more temples to science, systems, and other practical disciplines.

India has just enabled restricted use of 60 GHz, although devices were available abroad for years. If government permits telcos to use 60 and 70-80 GHz “mmWave” technology for pay-for-use backhaul with no loading of extraneous costs (auctions, extra taxes), there would be enormous service and cost benefits in India, as in San Francisco and London (see the device maps in the charts for one supplier).

 

V-Band and E-Band Devices in San Francisco and London for One Vendor (2017)

Figure 3: Siklu radios in San Francisco, CA, according to FCC database

Source: https://go.siklu.com/blog/custom-blog/the-evolution-of-mmwave-2 

Figure 5: Siklu radios in London, UK, according to OFCOM database

Source: https://go.siklu.com/blog/custom-blog/the-evolution-of-mmwave-2 

Changes are also needed to institutionalise easier access to spectrum for authorised institutions and researchers, so that India’s research and development for commercial and defence is freed of arbitrary, self-imposed constraints and delays.

Public access to the Gati Shakti portal, limited for security reasons, was allowed from October 2022. A cursory look at the portal does not disclose project details on sectors. It may be more amenable to authorised users; to a lay user, it appears to be a repository of reports that does not cater to meaningful queries or logical searches. Adding such capabilities would make it more informative and useful, although this will need to be balanced with security.

The essential points are that improving living conditions requires enabling and applying technology and know-how. Attention to scientific and domain applications to deal with ground realities will help improve our state of infrastructure for productivity and ease of living. Prioritising digitisation and telecommunications will help correct losing out on growth and associated living conditions because of inappropriate policies, and genuinely add both Gati and Shakti to our efforts.

 

 

 Shyam (no space) Ponappa at gmail dot com

  

1: India Transport Report

Moving India To 2032

Vol I - Executive Summary

National Transport Development Policy Committee, January 31, 2014

Rakesh Mohan et al

Summary Recommendations: http://www.aitd.net.in/NTDPC/rep_ntdpc_v1.pdf

 

2: How Much Does Physical Infrastructure Contribute to Economic Growth?

An Empirical Analysis

Govinda Timilsina, David I. Stern, Debasish K. Das

World Bank Group, Development Economics

December 2021

https://openknowledge.worldbank.org/handle/10986/36780

 

3: Digitalization and Economic Performance of Two Fast-Growing Asian Economies: India and The People's Republic of China

Dukhabandhu Sahoo, Suryakanta Nayak, and Jayanti Behera

ADB Institute Working Paper Series

No. 1243

March 2021

https://www.adb.org/publications/digitalization-economic-performance-fast-growing-asian-economies-india-prc

 

4: Jagadis Chandra Bose: Millimetre Wave Research in the Nineteenth Century

Darrel T. Emerson

National Radio Astronomy Observatory

949 N. Cherry Avenue, Building 65

Tucson, Arizona 85721

1998

https://www.cv.nrao.edu/~demerson/bose/emerson_delhi.pdf

The 5G Opportunity For A Unitary Paradigm

Adopt high-speed wireless subnetworks of small cells, and a commons approach.

Shyam Ponappa   |   October 6, 2022

An explanatory note on the draft Indian Telecommunication Bill touches on how spectrum is similar to atma, the soul. If this idea is pursued through a unitary approach to regulation, emphasising functionality and avoiding fragmentation, services would proliferate because of lower costs and easier installation. The truth, however, is that the regulatory environment in the last decade has not been coherent and integrated.

With 5G, India has the opportunity — once again — of adopting a resource-sharing approach, as is the case in some other forms of infrastructure. Airlines, for instance, share flight paths and airports, while vehicles and transporters share highways and transport facilities, and ships and shipping companies share routes and ports. In the same way, shared telecom infrastructure and spectrum will maximise efficient use of capital for 5G. The need is for integrated networks with many small cells, which are also effective for 4G. Both users and service providers benefit from capital-intensive infrastructure that permits open access to authorised operators paying for usage. Telecommunications has evolved in a more fragmented way than airlines and transport by land and sea. The latter systems are organised around the principle of a unitary approach to resource-sharing for efficient use.

One reason telecommunications evolved in this way was because of technology limitations, particularly wireless interference. Another was the approach in developed markets, particularly the US, the UK, and Europe. From the 1990s, these markets experienced waves of deregulation, privatisation, and a worshipful attitude to competition.¹  Meanwhile, the dissolution of the Soviet Union encouraged indiscriminate acceptance of free-market ideas. The strongest impetus driving governments, however, may have been the windfall revenues from spectrum auctions. This was amplified by the incongruous phenomenon of people equating government collections with public benefit, paradoxically as capitalism was in the ascendance. Auctions were idolised even after the collapse of telecom in the 2000s. The sector recovered gradually after many years, although services were seen as being deficient globally, resulting in broadband policy interventions even in the US, as in many countries.

However, barring notable exceptions, the concept of property rights continues to dominate spectrum assignment, as does homage to unfettered competition. Consequently, alternative approaches are scarce, although the technological and economic rationale for sharing integrated infrastructure, as in roads, rail, air and waterway routes and facilities, is self-evident, and is unquestioned. Quite simply, it is the logic of sharing high fixed and operating costs to maximise capacity utilisation, whether for communities or for nations. There are similar compelling reasons for sharing wireless technology and equipment, with developments in reduced interference, reuse in smaller areas with wider spectrum bands, and technological innovation far beyond earlier benchmarks. But this is not yet widely accepted, and much less so in India.

Some countries with a propensity for cooperation, as in Scandinavia, have successfully implemented a consortium approach, but this may be restricted to places with a collaborative culture. Others have tried government control of common access networks or spectrum, such as Mexico’s 700 MHz network, Australia’s Next Generation Network, or Africa’s open access network, none with success. The opposite, private control of networks and spectrum, prevails, as espoused by the US and followed by many, including India. The US, however, is moving rapidly to shared secondary use of spectrum as well as more open access, both of which are promising when it comes to effectiveness and efficiency.

Yet another way is the commons approach, with common carrier sectoral access to a public resource, spectrum, for the public good, with a fair sharing of costs for usage, as for airlines and other infrastructure. The example below shows how this could be done.

New Paradigm For Low-Cost Networks 

This outline is for 5G services in cities with fibre optic connections, which is extendable to rural areas without fibre. A recent press report mentions a government plan for Patna as a model for 5G rollout in cities. The city map is apparently divided into grids of 200 square metres to estimate the number of towers required, with the finding that the towers have to be doubled to over 3,000 for quality coverage. Whether this is really under consideration or not, the government surely needs to evaluate a wireless approach that is less expensive and more feasible than towers and fibre.

A conceptual plan by an equipment manufacturer for 5G serving a million users in 400 sq km is shown in the chart. Hexagonal cells with sides of 3 km and area of about 23 sq km cover this service area with 60 radios and 50 node switches. These can be installed on existing towers, buildings, and street furniture.

Source: https://elva-1.com/data/files/docs/ELVA-1_Dual-band_Urban-Scale_Wireless_Networking_Concept.pdf

This calls for a true paradigm shift in India’s policies, applicable for both 4G and 5G networks. The following administrative changes in regulations are required:

1. Permit authorised operators wide bandwidth use of V-band (60 GHz) and E-band (70-80 GHz) for multi-gigabit transport, with operators paying for actual usage. Permit channel width of 2.16 GHz (currently only 250 MHz for E-band) and channel aggregation for multi-gigabit throughput.

2. Permit Wi-Fi in the 6 GHz and 60 GHz bands for end user access.

3. Adapt US regulations for these bands to India’s needs, as has been done for 5 GHz in October 2018.

4. Implement these changes urgently. The need for speedy clearances and action cannot be overemphasised, given the inordinate delays.

To recap, our requirement is regulations for high-speed wireless in V-band and E-band, in wide bandwidths allowing for multi-gigabit transport for authorised operators paying for usage, together with end-user access through Wi-Fi in the 6 and 60 GHz bands. The costs, difficulty in installation, and completion time will reduce considerably, with far less towers and fibre because of the use of buildings and street furniture for wireless equipment. Radios will connect through wireless links in a mesh for coverage. Within cells, towers will connect to sub-cells for user access through Wi-Fi in the existing 2.4 and 5 GHz bands, or faster through 6 and 60 GHz.

This is an opportunity the government must not lose.

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Shyam (no space) Ponappa at gmail dot com

1: Paul Starr: "The Great Telecom Implosion," The American Prospect (September 9, 2002), 20-24.

On-Time Payments Can Drive High Growth

Lacklustre trend growth calls for attention to the economy, with less distractions, diversions, and disruptions. Government can lead with payment on time. 

Shyam Ponappa | September 1, 2022 

India’s economic recovery from the recent slump offers hope of reasonable prospects for the future. There are other encouraging factors that bolster this expectation, such as the reduction in the non-performing assets (NPAs) of banks. Yet, there is the sobering reality of a number of counterpoints that give pause. 

Warnings about constraints limiting average growth to 5 per cent annually arise from many factors: 

- Bank NPAs at nearly 6 per cent are still well above prudential norms. 

- Unviable government overdue payments, the unacknowledged counterpart of NPAs (more on this below). 

- Electioneering practices that are socially disruptive and financially ruinous. 

- Low proportion of women employed (20 per cent). 

- The need for increased provision to improve access to better jobs, either by migration or by remote access. 

- The need for improved digitisation for quality and output, including clean, secure databases. 

- Government interference that decreases public sector productivity and performance. 

- Uncertainties and disruptions from external threats (border tensions/clashes, and global disruptions of critical supply chains). 

Some factors are beyond policies and regulations, while others are not. What realistically could be the expectations of government policies and actions? An annual average of 5 per cent (only)? Or could it be higher, as we need it to be? 

The chart shows recent annual growth rates since a peak of 8.26 per cent in 2016.

The annual average since 2016 is 5.19 per cent, which means growing at 8 per cent for the next three years will yield an average of only 6.03 per cent since 2016. Even growth at 9 per cent annually for the next three years will result in an average of 6.33 per cent for the period. Realistically, if the government and the rest of the country do some right things, an average 5-6 per cent is all that is likely. While this is indeed sobering, it signals the need for serious attention to the economy, and less distractions, diversions, and disruptions. 

Payment Discipline & NPAs 

There are of course broad, interlinked reforms needed in many areas, such as in farming, the judiciary and dispute resolution, trade protectionism and tariffs, and so on. But there is a simple, fundamental change required that is essential if India is to genuinely address “performance” instead of maundering its way to “non-performance” as in the case of NPAs (i.e., non-performing assets), which, however, for some reason doesn’t happen. This simple change is performance of timely payments by government and government-owned entities. 

On-time Payments Can Drive Higher Growth 

Three years ago, this column explained how overdues lead to NPAs, and more broadly why a fundamental change is required in adherence to payment discipline.1 While much has been made of NPAs being unacceptable, there seems to be a tacit acceptance of government and public sector overdues. Whereas government overdues are like the counterpart of NPAs, reflecting government non-performance of payment obligations. The Central Repository of Information on Large Credits (CRILC) for collated data on bank loans and NPAs was created in 2014. Until then, such data had to be obtained from diverse sources. But there is no matching single point access to payments due and overdue from government and public sector entities (central and state). The power ministry’s portal from 2018 (praapti.in) is an exception, as is the Samadhaan portal for micro, medium, and small-scale enterprises (MSMEs) of the Ministry of MSMEs from 2017. 

For electricity, at the end of July 2022 state subsidy overdues to distribution companies (discoms) were reportedly at Rs 75,000 crore, while total overdues to generators and discoms was Rs 2.5 trillion. Regarding government overdues to MSMEs, nearly 100,000 applications had been filed in the four years to October 2021. A press report in October 2021 cited an estimate of overdues to MSMEs of Rs 1.5 trillion. 

Bank NPAs were finally addressed in 2014-2015 by the Reserve Bank of India (RBI) enforcing existing regulations to clear dues or be classified as NPAs. For most enterprises, this was like being sentenced to the guillotine. While this appeared draconian instead of calibrated attempts at restructuring, arguably, developments thereafter may justify the recourse to harsh methods. 

Less drastic ways are possible, just as restructuring stressed loans through effective processes and timelines is possible, but only for viable projects, and not without difficulty. This is the alternative to overdue bank loans being declared as NPAs, followed by bankruptcy and distress sales. An example of the effect of this blunt instrument occurred in 2019 to a number of power generators and distributors. There were 34 power producers with viable projects who had unpaid dues from electricity distributors, or were facing coal supply problems, or were in the process of restructuring loans. Classified as defaulters after the RBI-mandated 180 days regardless of the cause, they had to seek judicial relief. The Supreme Court quashed the order that gave rise to this condition, i.e., the RBI Circular of February 2018. 

Others had a worse fate, such as a major construction company whose receivables far exceeding its debt were overdues from major public sector companies, but suffered severe financial distress because it could not service its debts. 

For government dues, it would be far more preferable to institute a credible, calibrated and systematic process, including real-time monitoring and penalties (with minimum discretion), rather than adopting the guillotine approach. This is because the cost of the resulting economic shut-down has to be avoided if at all possible. Similar real-time processes and systems could be set up for bank loans for NPAs, and to prevent overleveraged borrowing. Uncollated data on government dues are already in the goods and services tax system, as detailed in this article two years ago.2 Fundamental changes in operational standards are essential for on-time payments, with penalties (penal interest, with restrictions on borrowing), with strict enforcement for non-performance. Central and state governments have to provide the lead on this necessary aspect of governance. 

Just getting cash flows on time would probably be sufficient for India to grow at well beyond an annual average of 5 per cent 

Shyam (no space) Ponappa at gmail dot com 

1: https://organizing-india.blogspot.com/2019/04/delayed-cah-flows-and-npas.html; 

https://www.business-standard.com/article/opinion/delayed-cash-flows-and-npas-119040301417_1.html 

2: https://www.business-standard.com/article/opinion/clearing-dues-from-the-government-120100601684_1.html

Infrastructure Sectors That Boost Growth

 

Apply proven policies in telecom and electricity to rev up the economy.

Shyam Ponappa  |   August 4, 2022 

Does infrastructure spending promote economic growth, or is it the other way around? The arguments go back to questions such as whether building America’s railroads in the 1850s led to growth, or the reverse. While the costs and benefits of building transportation may be contested, partly because of what is measured and what is not, one positive linkage that has emerged is between improvements in information and communications technology and economic growth.

Potentially useful findings are given below.

1. A World Bank study (2021) reviewed the contribution of three categories of infrastructure to growth from 1992-2017: Transport, electricity, and telecommunications. The study covered 87 countries out of 189, because of missing data and to ensure a balanced panel. One finding was that infrastructure, especially electricity generation and telecommunications, significantly affected economic growth. This effect was larger more recently (1992-2017) than before (1970-1991), and developing economies experienced stronger effects than industrialised economies.¹

The researchers considered the contribution of physical capital, human capital, electricity, roads, railways, mobile phones and telephones to gross domestic product (GDP). The first principal component derived from these that explained most of the variation, comprising mainly electricity, mobile phones, and land-line phones, was characterised as the telecommunications and electricity factor. The second principal component, comprising largely roads and railways, was characterised as the transport factor. These factors roughly kept pace with population except mobile phones, which increased very significantly, driving the increase in the first principal component.

The chart of the GDP response to the two principal components demonstrates the effect of the primarily electricity-and-telecommunications principal component PC1, and of the primarily transport principal component PC2. The latter initially reduced output for some years. The implication is a need for policies that prioritise telecommunications, including broadband and internet, and electricity.

2. An Asian Development Bank publication on digitalisation and economic performance in India and China found that the internet and mobile density have a significant impact on economic growth.²

3. A study of factors that drove the surge in India’s service exports by researchers at the Institute of Economic Growth and Symbiosis found that attributes that affect the highest service exports (computers, communication and other services were nearly three times the traditional service exports in 2013), were driven by teledensity, together with financial sector development, human capital, and R&D expenditure (chart 2 ).³

The impact of telecommunications and electricity together with strengths in computers and communications services points to India’s needs: Prioritise enabling policies for telecommunications infrastructure for broadband and internet (integrated with the rest: Electricity and transportation, water and sewerage, logistics/transport, financial support, taxation, and so on). Parallel support is required to develop local ecosystems for equipment, which would have to be imported otherwise.

Effect on Policies 

What matters is how these conclusions affect government’s policies, because policies and regulations permit or constrain what we do and how we live. The solutions required ideally are for overall community needs, and not for what individuals, sectors, or stakeholders might need, as the consideration below indicates.

5G Auction & Prospects

Now that the government has bagged Rs 1.5 trillion from the 5G auction, what are the prospects for growth? If this amount is channelled to support BSNL/MTNL, with more government intervention to make them profitable, consider the probable outcomes.

(a) Things could turn out as planned, resulting in a strong telecommunications sector with four operators propelling growth. BSNL/MTNL certainly need support for their important, widespread services. The issue is whether they can be profitable, given their role. On the one hand are their market position in coverage/saturation and diminished share, while on the other are their responsibilities for essential services for strategic purposes and in difficult, unremunerative locations.

It is unreasonable to expect profitable performance in competition with private operators who can cherry-pick their markets. The very idea that governance through providing essential services must make profits is untenable, as it is for security, defence, or disaster management. Yet, this expectation has led to price cuts that have ended in a race to the bottom. Such pricing is a disservice, because it constrains investment in services, and thereby overall country capacity, to low-quality bottom-feeding. We expect and get low prices, but are saddled with low quality. The sector cannot build high-quality, reliable services, and is falling farther behind global service levels. India cannot possibly compete burdened with such self-imposed handicaps.

(b) Another possible outcome is that there will be unsustainable price cuts as before, with unfair access to spectrum (announced), and unfair competition from corporations. The losses could be perpetual, with the sector and the economy in shambles.

The Alternative for Policymakers 

Instead of continuing with unreasonable and ineffective practices that prevent us from realising our potential, even now, the government can change policies to capitalise on our strengths of being imaginative and resourceful, with the capacity to perform well with good systems and processes.

The success of NTP-99 can be repeated, by converting auction payments to revenue-share, this time for spectrum instead of licence fees. The difference is that operator dues can be financed from actual revenues, and not loans on anticipated revenues. This will not only enable immediate investment in networks and services, but as with NTP-99, is likely to result in substantial growth, with much higher government collections, and as a multiplier across sectors.

Legislation can be framed to convert spectrum auction payments to a reasonable percentage of revenues, as for licences. Instead of destabilising markets to favour BSNL/MTNL or corporations, insights can be applied and best-practice regulations can be adapted for our circumstances. The introduction of shared infrastructure through two or more mandatory consortiums led by corporate entities, with BSNL/MTNL as a strategic stakeholder ensuring national security and public interest, will enable even greater leveraging of network assets.

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Shyam (no space) Ponappa at gmail dot com

(1): Timilsina G. et al: https://openknowledge.worldbank.org

(2): D Sahoo et al: https://www.adb.org/publications

(3): Pravakar Sahoo & Ranjan Kumar Dash: "What Drives India's Surge in Service Exports?"

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3620313

Improving The Odds For 5G

Fixing the approach for networks and services is necessary for getting to 5G.

Shyam Ponappa   |  July 7, 2022 

Towards the end of 2021, the government acted admirably in the public interest, making difficult and courageous decisions to partially resolve legacy problems in telecom, such as redefining adjusted gross revenues and withdrawing retrospective tax demands. This gave rise to expectations that reforms would be less constraining, and more beneficial for the public interest. The announcement in June of 5G spectrum auctions and limited E-Band backhaul allocation, alas, falls far short. Why the disappointment, and how might the situation be improved?

Two areas need changes: Backhaul, and access spectrum. One aim is to remove self-imposed constraints. Another is to replicate the successful pattern of other sectors, where enterprises build their business, earn revenues, and then pay taxes. For some reason, this does not apply to communications despite it being a critical essential service.

Backhaul – E-Band

A fundamental problem is the limited backhaul spectrum. Two bands of 250 MHz of E-band spectrum (70-80 GHz) are to be assigned to each telco that wins 5G spectrum. This is puzzling, as there are 10 GHz available (20 times 500 MHz). If press reports that this is temporary are correct because these frequencies are to be auctioned— and telcos must agree to pay the auction price at that time — the situation is disastrous, because 5G needs large backhaul capacity.

In other countries such as the US or the EU, policies are framed so as to enable usage of the full 10 GHz at minimal cost. This provides flexible capacity for much higher throughput, whereas we are creating a self-imposed constraint by restricting capacity. This means that the Organisation for Economic Co-operation and Development countries gain more from increased productivity than a developing country with the same resource. This can be remedied by adopting their regulations as appropriate.

The public interest is well served when policies enable telcos to use available resources to increase productivity and efficiency, instead of being obstructed in delivering services, or having to spend more to achieve comparable service levels. The same goes for the discriminatory allocation of spectrum to non-telcos (private companies), who will apparently be allotted spectrum on preferential terms compared with telcos. India’s networks cannot compare with those of the OECD countries that have such policies, which is why such allocations would be too disruptive here.

Just as we are deprived of network capacity because spectrum is either not permitted for use, or is extortionately priced (both self-imposed conditions), limiting wireless backhaul or pricing it high will hamstring 5G and even 4G, because wireless backhaul will not be deployed extensively if the cost is prohibitive. These circumstances are aggravated by the threat of auctions for backhaul spectrum.

Without extensive wireless backhaul, access spectrum from auctions cannot be fully utilised because of limited direct fibre connectivity. Unlike countries that have good wireless backhaul— business hubs such as Mumbai’s Bandra Kurla Complex or Nariman Point, Gurugram’s DLF Cyber Hub, Connaught Place or the Dhaula Kuan, — the Airport stretch in Delhi, hospital and medical research complexes, engineering and manufacturing clusters, and so on, are denied vastly improved communications and access to data using gigabit wireless mesh networks. Even the spread of 4G small cells is constrained, reducing efficiency and productivity.

It would be useful to base India’s regulations on what others such as the US, the EU, and the UK are doing with E-band. They require non-exclusive nationwide licences, with mandatory coordination and link registration (usually through a geolocation database). Our comparatively less developed networks make it inadvisable to adopt their policies wholesale, because it would disrupt equitable network development in India, accentuating the divide by skewing investment to the most profitable areas.

Our authorities need to focus on setting up and institutionalising processes such as non-exclusive licensing to telcos, and the mechanism of geolocation databases for backhaul spectrum for mandatory coordination and registration. Policies need to be framed so as to help builand grow gigabit wireless links to reinvigorate the sector, to recoup its stellar trajectory and contribution as in the past.

An instructive example is the approach taken by the City of London, or the “Square Mile”, in addressing communications for its 400,000 workers every day, 10 million visitors annually, and 9,000 residents. The mix of historical buildings and modern architecture poses a challenge for mobile network services. In 2017, the City initiated a project for providing free public gigabit Wi-Fi throughout the Square Mile.¹ The design incorporated 4G small cells for better connectivity, and the City offered 3,000 street assets (such as lampposts), stipulating that the system must be a neutral host open to all service providers.

The project was awarded to a joint venture of which one company is active in India. The backhaul uses a self-organising millimetre wave (mmWave) mesh as a “neutral host” that enables use by multiple operators. The mesh gives all service providers gigabit backhaul and access applications at 12Gbps with its 60GHz mmWave access and backhaul.

5G Access Spectrum

Assuming the objective is ubiquitous 5G and other services, India needs a different approach. Spectrum auctions will not get us there. We achieved a level in mobile telephony by adopting a reasonable revenue share on licensing around 2003 after NTP-99. The same needs to be done for spectrum.

One proposed approach² suggests that as there are only three serious telecom operators, spectrum can be allocated equitably to all three without auctions. This seems reasonable, as the funds diverted to auctions could then be invested in networks, and collections from revenue sharing are likely to far exceed collections from auctions, as they did after NTP-99.³ The downside is that it would require the development of three networks, unless the operators share infrastructure. An alternative approach would be mandatory infrastructure sharing with one neutral host network, or two competing networks owned by different consortiums.

If the authorities could take these points into consideration in improving the regulations, we are likely to have better outcomes in terms of networks, services, and the state of the sector.

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Shyam (no space) Ponappa at gmail dot com

1) The City of London Case Study: https://www.gsma.com/futurenetworks; 

2) Rajat Kathuria and Mansi Kedia: https://indianexpress.com/article/opinion/columns; 

(3) See Chart 2: Telecom Auction Fees Foregone vs Licence Fees + Spectrum Charges at: https://organizing-india.blogspot.com/2020/08/configuring-indias-digital-ecosystem.html

Telecom Reforms: Reducing Self-Imposed Barriers

 

Less restrictive regulations with better process discipline could improve broadband reach and functionality.

Shyam Ponappa   |   April 7, 2022 

Uncertainties with global supply chains are likely to persist even if geopolitical tensions ease in the coming months. With India’s dependence on energy imports of oil, gas, nuclear fuel, and materials such as cobalt, lithium and nickel for solar cells and batteries used in communications and information technology equipment and electric vehicles, we need to dedicate more focus and serious effort to fending for ourselves where possible over the longer term.

The ongoing processes of strategy formulation, execution and resource allocation necessarily involve trade-offs in choosing where and how to allocate time, capital, and human resources. In this context, advocates for services over manufacturing, or freewheeling opportunism, or those against performance-linked incentives (PLI) for manufacturing, may be glossing over the fact that our size and circumstances make for imperatives that could have been different if we were a smaller country, or at a different stage of development, but ultimately, only if it were a kinder and tidier world. Retaining a degree of autonomy requires a level of security in essentials, including in defence, food, and other areas. Our stage and state of development are also often overlooked, especially when commentators don’t tailor solutions to fit the context of our facts, including the culture/s, processes, and institutions, or the lack of them.

Two conditions in particular that hamper our capacity for enterprise and productivity need redress, besides social disharmony. One is an unsystematic approach, lacking goal-oriented, integrated planning and end-to-end execution. The second is regulatory constraints, often in the form of legacy holdovers that have not been reformulated to meet our present and anticipated requirements.

An example of the consequence of unsystematic practices is stranded electricity generation projects, despite potential users without adequate power, because transmission and distribution have not been built into the project “solution” as a prerequisite. Another example is the state of our broadband and telecommunications services, where many users have unreliable or inadequate access, because end-use delivery has not been successfully configured. A third instance is our highways, for which impressive statistics contrast with the highly uneven experience in using some of them

The open secret, of course, and the most difficult part, is to have a dedicated, end-to-end plan for projects, with the linkages thought through and provided for and executed in their entirety to achieve effective delivery without being distracted by new leads and schemes. Given the way technology linkages have developed, communications and information technology are key drivers for all technologies and infrastructure, as well as many aspects of superstructures. We sorely need pervasive, reliable, well-functioning networks. The criteria of good delivery and efficiency require policy reforms regarding the way spectrum is assigned, used, and paid for, how it is regulated for operator access, and how all network resources are optimally utilised for user benefit. That is the task, starting from where we are, with what we have.

For optimal service delivery, there are three aspects to the structure of our telecommunications requirements:

- The core network or backbone and skeleton,

- The distribution to user clusters beyond, and

- End-user connectivity within clusters.

At the first level, fibre networks are available in most urban and semi-urban centres, but in less than half of our gram sabhas or village-cluster centres. The criterion to be ensured is network quality for delivery standards including up-time, not just nominal connections. Rural coverage perhaps needs to be tackled systematically in sections, with realistic time frames and budgets, unalloyed by electioneering grandstanding and exaggerated claims that emphasise announcements over delivery and performance.

The second level is the extension and distribution of links from existing fibre networks within cities, and to villages in each cluster. Given continuing difficulties in completing the BharatNet fibre network to the numerous village clusters that don’t have fibre connections, a possible way to bridge this gap may be to enable and use high-capacity wireless links. Policies facilitating the use of viable wireless means do not exist even as these could improve network reach and functionality. Appropriate changes could enable the use of spectrum bands such as 60 GHz and 70-80 GHz for point-to-point fronthaul, mid-haul and backhaul. Six GHz could be enabled for high-speed Wi-Fi. Financial viability could be evaluated using modelling and simulation exercises.

Perhaps wireless links up to several kilometres to gram sabhas also need to be considered in place of fibre which has not been possible to install for years on end. In more remote cases, the use of satellite links may be a necessary expense, with the likely availability of such links with recent changes in policies. The third level needs a combination of fixed and wireless end-of-middle-mile links, with cellular or Wi-Fi user access.

Given the legacy of colonial-era laws, a conscious, imaginative effort may be useful, such as the use of a negative list as in trade agreements of prohibited items, with the rest open to consideration by due process when sought by service providers. This would enable, for instance, industry representatives mooting the consideration of 12 GHz for Wi-Fi going forward, on the lines of developments in the US, the European Union, or the UK.

For equipment and solutions, there is a product-and-services aspect for global as well as local markets that is much larger, which involves manufacturing and integrating services to deliver solutions. These avenues are closed off to our talent and enterprise because of our regulations. These regulations hamper us needlessly, forcing us to constrain ourselves in ways that other nations do not restrict their people. Enabling policies could remove these constraints, so that research, development and experimentation are facilitated for our vast talent pool. There is no other way in which we can hope for domestic production for local markets, for instance in wireless equipment, without prohibitive levels of imports.

If we have rapid facilitation of controlled trials and testing by authorised industrial and academic institutions, active development and proliferation of devices would be possible here. This would enable the design, development, and production of solutions for local use, as well as for the much larger global markets, e.g., for 5G applications, for which there is no domestic market yet.

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Shyam (no space) Ponappa at gmail dot com

Disclosure: The writer is associated with proposed wireless trials.

Winning Can Equal Settling For Less

An accommodative approach can provide greater gains.

Shyam Ponappa   |   February 3, 2022

My previous article “Moving Beyond A Zero-Sum Approach”¹ dealt with how in most interactions, focusing on one’s own gains narrowly can lead to ignoring coordination, which then results in inferior gains. Coordinated solutions can be in the form of cooperation, collaboration, or accommodation. The reason is that while a situation may not have a win-lose (zero-sum) structure, if one party in seeking gains takes an approach as if it were win-lose, the areas for beneficial joint gains through collaboration or settlement are often ignored. This is likely to result in worse outcomes for all (a Nash Equilibrium in game theory). Conversely, if participants consider the interests of all parties and are willing to accommodate, the outcomes are likely to be better for all.

This can apply to battles of attrition as well. In resisting arbitral awards, it is a question of settling for a better outcome instead of being compelled to accept less/lose by seeking to enforce entitlements. It may be less damaging in our overall interests to seek a settlement, even if we believe we are right.

A review by the government of its committed direction is warranted in some areas, taking stock of the facts afresh to decide what is best for us. One of these is resisting the arbitral awards to Devas, because this is a battle of attrition, and the risk of attachment and seizure of government-owned assets abroad will continue. The requirement is not on principles, of not relinquishing a position once taken, or of establishing whether or not there was fraud. It is the issue of continuing national waste of attention and time on resisting international awards, diverting these away from actual governance needs. The awards are there, and enforcement will be pursued. The reputational damage to India from attachments and seizures will continue, as will the waste of time and money on resistance, until there are diminishing returns for the claimants.

In such situations, alternative strategies to be considered include possible accommodative responses. Should India resist claims indefinitely in these circumstances, considering the likely outcomes and the negative repercussions, especially to developing its manufacturing capabilities? Or should it consider possible ways to settle this matter for less than foreseeable costs, and shift its attention and energies to constructive activities in other areas?

The diagrams explain this graphically. Chart 1 (from my previous article (1)) is the example of Company A acquiring a stake in Seller S for an alliance. Chart 2 highlights the potential for gain from a collaborative or accommodative/coordinated outcome, as explained below.

The potential for gain is in the shaded area between the “bliss points” and the lowest achievable benefits, comprising: (a) S1, the Seller’s desired highest price for selling a lower stake;( b) A1, the Acquirer’s desired lowest price for the highest stake; and (c) N, the lowest achievable outcome.

The minimum-gains for both are at the origin at N, the Nash Equilibrium, which is the likely result if both sides pursue their respective interests to the exclusion of the other’s. However, if both consider mutual benefits through collective gains, both will gain as they move away from N towards the contract curve S1 to A1. The gains are maximised at any point on the contract curve.

For the arbitral awards, the ideal requirement is for an accommodative agreement on an amount or arrangement that leaves both sides better off, rather than litigating indefinitely, having already been contending for the last 10 years.

Telecom As Infrastructure

A second area that deserves recall is the The National Telecom Policy-1999 (NTP-99). Briefly, in 1994, regulations required telcos to bid for licences. Most won with high bids, some had to forego their licences, and all were stuck with no cash flows to pay licence fees. Cash flow constraints limited their networks and the ability to lower tariffs to attract customers. Based on an accommodative consultation between the government, the telcos, banks, and other experts, and thereafter the public, a revenue-sharing arrangement was introduced for licence fees. It was faulted for being prepared without Parliamentary debate, and for its lack of transparency, with some people charging that it was a sell-out to telcos. Initially, the revenue share was set too high until 2003, when a lower percentage share and reduced charges stimulated enormous growth and proliferation in mobile services, until 2011. At that point, the 2G scam broke the trend, followed by retrospective adjusted gross revenue demands, and it hasn’t recovered since.

In terms of process, the government initiated a coordinated arrangement in consultation with the telcos and other industry representatives and experts, and then with the public. The outcome after some years, after initial missteps because of overcharging by the government, was a remarkable success.

This is the process that deserves consideration, with improvements such as for Parliamentary consultation followed by public consultation at the appropriate time, and legal and regulatory inputs. It is in lieu of the committed course of extracting cash from telcos through auctions, while expecting them to make massive investments to provide state-of-the-art services.

An objective consultation and design process by a multi-disciplinary group led by the Ministry of Communications and Information Technology is required, with coordination through the Prime Minister’s Office as for NTP-99 drawing on other government departments, industry and experts, with assistance from behavioural science facilitators for work-outs. The scope to be covered is everything from network infrastructure, spectrum, and new technologies, with a systems approach using objectives-oriented process design.

Ideally, apart from techno-economic, civil administration and managerial aspects, behavioural science inputs to assist groups in addressing inter-departmental resolution for overall gains needs to be made a part of the consultation process.

Adopting an approach geared towards the benefit of society shifts the focus away from the adversarial, competitive perspective of fixating on defensive strategies that result in least gains, and opens up to greater benefits through group effort. This is what we should be aiming for to improve communications infrastructure.

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shyamponappa@gmail.com

1: https://organizing-india.blogspot.com/2022/01/moving-beyond-zero-sum-approach.html

2: GE's Work-Out Process

Unlike conventional methods of teaming, whereby problem-solving or “task” teams meet for short periods over several weeks or even months, the heart of General Electric Work-Out is its efficient, focused, multiple-day work sessions.  These are carefully designed and closely facilitated by one or more of our GE Work-Out-experienced Senior Associates.

https://thinkgagnonassociates.com/core-capabilities/ge-work-out

Gagnon Associates did the first workouts for/with Jack Welch at GE.