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The Case For Staying With Ethanol 10

Ethanol blending over 10 per cent may be desirable but a full understanding of its environmental and economic impacts is crucial.

Shyam Ponappa  August 3, 2023

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Shyam Ponappa on ResearchGate

Comprehensive, Integrated Strategy & Execution

India has been coasting along on a post-feudal-colonial mélange of currents and tides, with the brigandage of opportunistic politics fed by our (the voters’) greed for short-term benefits. The result is grotesque populism and corruption, in lieu of the deferred gratification of pleasing cities and countryside with the appurtenances of proper governance: sidewalks and drains, toilets, transport, administration and order, hospitals and schools.

We have to organize and manage ourselves, “engineer” our way ahead, taking steps to build and develop our solutions, building systems and processes, and not just wait for things to happen. We need a comprehensive and integrated, systemic, silo-busting, problem-solving approach.

This applies across the board in the broadest “spatial planning” sense that integrates housing and land use at all levels with commercial, industrial, cultural, scientific and educational activity, transportation, and all governance and infrastructure: water, sewerage, energy, communications, basic health and education. Infrastructure being the first level of enablement is the essential starting point.

Previously, India’s leaders acknowledged that infrastructure is India’s great need. Yet, they took no steps [exception: NTP-2011 in October, 2011] to marshal forces to draw up a credible strategy and execution plan. This is what needed and needs doing. Only good intentions and/or money won’t do, because delivery systems and processes have to be developed, i.e., planned, and built from scratch.

It looks like the NDA II will seriously address the development of enabling infrastructure.  A beginning on a long way ahead.  The next few months will demonstrate the resolve of the NDA II to really break the mould and get the job done.

- July 2014

And it got worse for Digital India with another spectrum auction [March 2015] and the attendant deprivation of network rollout and service delivery. 

...And worse: another auction with Rs. 109,000 crore (~$17.6 billion). - April 2015

... And yet worse, as another auction reduced investment by over Rs. 65,000  crore  (~$10 billion). - October 2016

... And annual auctions threatened from 2017! - March 2017

Lack of integrated systems and controls led to the worst bank fraud in India - PNB $2 billion - February 2018  And IL&FS - September 2018

The National Digital Communications Policy 2018 is only an aspirational statement - October 4, 2018

Big bang for Wi-Fi!  5 GHz regulations similar to the US FCC. - October 2018

As the sector stalls, government talks 5G spectrum auction, wanting more cash while the industry drowns in debt. - January 2021  

The Supreme Court reverses previous rulings in favour of telecom operators on retroactive charges for spectrum based on an all-inclusive definition of Adjusted Gross Revenues continues...

Another ill-advised auction - March 2021.  And another monumental failure, neither serving the government's cash needs (too much left on the table), nor the consumers (too much spectrum left untouched).

A reversal (FINALLY!) of the retroactive tax amendment affecting Vodafone, Cairn, and others - August 5, 2021.

Spectrum Usage Charge zeroed; past due demands being reconsidered? - October 7, 2021

5G Spectrum Auction July 2022 nets Rs. 1.5 lakh crore (about $19 billion), making that amount of capital unavailable for investment in networks.  Allocation of an even larger amount to reviving BSNL and MTNL increases uncertainty of outcomes.

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

4G, 5G, or 6G - All Need Wireless Backhaul

A rose is a rose - or is there one that is sweeter?

Shyam Ponappa   |   December 2, 2021

Calling our networks 4G, 5G, or 6G makes little difference. What matters is service delivery to users. Once there is connectivity, the criteria for judging a network are speed, capacity, and latency (lag in response time). Our 4G experience is far short on these measures. Improvements are possible if our government proceeds on the basis of (a) objective assessment, and (b) concerted action on systematic, realistic, and phased plans and execution. The starting point is a factual assessment of our networks and service delivery compared with the rest of the world. The next steps are to frame policies and regulations to enable the better use of available resources for service delivery, without irrational hurdles.

An aspect of telecom not obvious to users is the reality of layered technologies that exist even in advanced environments. For instance, a country with excellent mobile services such as Norway has achieved among the fastest average speeds of over 50 Mbps with continued investment in 4G networks. 4G has evolved considerably and provides the core network, except for Standalone 5G networks. 4G has latency down to two-digit milliseconds, and speeds comparable to 5G in the lower user bands (below 6 GHz). High-frequency 5G provides faster user access on 4G platforms.

Realistically, we should plan for a mix of technologies going forward as 4G continues to evolve over the next decade. However, we need policies that result in full 4G coverage of good quality, not merely indulgent talk. Also, while 3G is being phased out because of its less efficient use of spectrum, it will take years to transition fully to 4G and beyond because of the cost and scale. In Europe, for example, even 2G is to continue until 2025 for certain applications.

What are the policies that can give us improved services? A good place to start is the Parliamentary Committee report tabled in February titled, “India’s Preparedness for 5G”.¹ Its main findings are that while 59 countries had deployed 5G, though largely on a limited scale, India had not done so. No 5G trials had been permitted as of January, and sufficient preparatory work had not been done. The challenges highlighted are:

• Inadequate spectrum, with only 50 MHz per operator, half the global average. For 4G, average spectrum per operator was even less, at a quarter of the global average.
• Exorbitant spectrum prices.
• Insufficient development of 5G use cases.
• Low fibre network availability.
• Deficient backhaul capacity.

The report emphasises the need for heavy investment to develop fibre networks, including for backhaul, and then deals with other aspects such as investments and local manufacturing.

Fibre does indeed provide the best connectivity. While highly desirable, it is the gold standard, and often prohibitively expensive. Fibre connections to towers are ordinarily justifiable only when financially viable. Second, small cells have to proliferate for 4G, 5G, and 6G, with wireless or fibre links (backhaul) to networks and Wi-Fi user access. The question is whether aiming for full or even substantial fibre connectivity to towers and small cells is realistic, compared with alternatives and technology trends.

Interestingly, the GSM Association published two reports addressing this in February 2021. The first was a study on backhaul in 40 countries titled, “Wireless Backhaul Evolution: Delivering next generation connectivity”.² The second was on the spectrum required for this titled, “Spectrum for Wireless Backhaul: GSMA Public Policy Position”.³

The first report indicates that 5G’s growing traffic and network capabilities will need massive augmentation of backhaul capacity through evolution. Wireless links are estimated to constitute 65 per cent of global backhaul links between 2021 and 2027, evolving to higher frequencies with wider channels, with regulators’ decisions helping or hindering specific 5G markets. The E-band (70-80 GHz) is expected to dominate wireless backhaul from 2021 to 2027. Many countries are also using V-band (60 GHz) delicensed for Wi-Fi. Even countries with high levels of fibre such as Japan and South Korea are using E and V bands for backhaul. Shouldn’t we do this, too? (See chart)

Chart: Full 4G + Some 5G with V-Band and E-Band

India has many urban and rural sites where fibre is infeasible, because of factors such as congestion, distance, terrain, dispersed users, and limited commercial potential. Wireless backhaul can fill in where fibre is not accessible or affordable, although evolution to higher, wider bands will be necessary. Meanwhile, wireless V and E bands are now reasonable alternatives for distances of about 1 km, and 3-4 km or more, with the disadvantage of rain attenuation. The GSMA report suggests this could be mitigated with carrier aggregation (combining) of E-band with lower bands (such as 15, 18 or 23 GHz) to provide 10 Gbps links for up to 10 km.

Active Network Sharing

Regulators worldwide are considering or pursuing the substantial benefits of active network sharing for enhanced coverage, reduced costs, and faster deployment. A McKinsey report in 2018 cited network sharing becoming a standard model for mobile operators, with a reduction in the total cost of ownership by 30 per cent, while improving network quality.⁴

Steps for Consideration

Formulate policies, laws and regulations for the following, with mandated spectrum/network sharing, paid for by reasonable revenue share (2-3 per cent) after a moratorium of 3-5 years (no auctions). Cap profits, and penalise diversion of revenues/profits.

1. Small cells: For Wi-Fi user access, V-band lower range and 6 GHz (using FCC model, as done for 5 GHz). Consider 12 GHz for Wi-Fi next.

2. Wireless backhaul, small cells/towers: V-band upper range and E-band, with light-licensed sharing among telcos for connecting to networks.

3. Private networks, small cells and backhaul: V-band light-licensed* for private networks, with public network connection through licensed telcos.

* After reconsideration December 4, 2021: "V-band allowed in private spaces for private networks and extensions, with public network connection through licensed telcos."

4. Active network sharing: Consider enabling or mandating active sharing of all elements of networks to speed up deployment, reduce clutter and radiation, and for efficient capital investment.

Orchestration and coordination across government departments and consultation with industry, as for NTP-99, to ensure better outcomes.

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Shyam (no space) Ponappa @ gmail dot com

1. https://eparlib.nic.in/bitstream/123456789/799780/1/17_Information_Technology_21.pdf

2. https://www.gsma.com/spectrum/wp-content/uploads/2021/02/wireless-backhaul-spectrum.pdf

3. https://www.gsma.com/spectrum/wp-content/uploads/2021/02/wireless-backhaul-spectrum-positions.pdf

4. https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/network-sharing-and-5g-a-turning-point-for-lone-riders

Telecom Reforms: Relief - With Hope?

 

This could be a good first step towards a real transformation.

  Shyam Ponappa    |   October 7, 2021

At first glance, the big-bang telecom relief package last month might seem disappointing. A closer look shows the possibility of real promise. Could it be a subtle masterstroke, the first in a series of steps that will revive the sector? Here’s why.

• By not fully resolving the debt burden to result in sustainable cash flows, it gives the impression of a grudging debt-restructuring that doesn’t quite revive the patient, while prolonging the agony.
  
  
• However, it provides immediate relief with a four-year moratorium on cash outflows.
  
  
• An issue that defied resolution since 2003, of what constitutes revenues for sharing, has been defined rationally as revenues from telecom.
  
  
• The spectrum usage charge has been rescinded.
  
  
• Solutions for revival are to be worked out as next steps.
  
  

Although the last three are prospective, telcos get immediate relief without awaiting the formulation of complex solutions. The relief is temporary though, as outstanding dues must be paid with interest. Unless much more is done, there will be a prolonged attrition, with high opportunity costs from the continuing non-availability of services that severely constrain our capacity and productivity.

Meanwhile, another significant reform was introduced unobtrusively: Active network sharing. Blocking active sharing amounts to depriving the country of full utilisation of capital-intensive resources. Imagine having separate private road systems, or gas pipelines, and insisting that vehicles (or gas) must go from place to place only on their own networks. This was the situation in telecom until interconnection was made mandatory, but the latter did not eliminate network duplication, whereas active network sharing allows for eliminating it.

Thereafter, news that the government may change its position on spectrum charges due suggests more pragmatism. If the above interpretation is correct, the subtlety and quick action while avoiding opposition by not seeming to give away too much augur well.

For transformative reforms and a genuine revival, the Ministry of Communications and Information Technology could take the approach that worked reasonably well for NTP-99, with coordinated planning and initiatives through the PMO across ministries and corporations, and external advice as appropriate. While it was not perfect, the NTP-99’s adoption of revenue sharing succeeded in expanding mobile telephony enormously. Learning from that experience in handling the details may help to avoid situations such as the legal wrangles on the scope of revenues, and the false starts. For instance, the government’s share was set too high initially at 15 per cent, and thereafter, spectrum auctions after the “2G scam” crippled the sector because of the “winner’s curse”, as auctions did in much of the world. We had best avoid such situations.

Wi-Fi Small Cells

The ongoing evolution to small cells amplifies the need for sharing. Mobile handoff to Wi-Fi is already the norm for 4G. Ubiquitous 4G networks and later upgrade to 5G and 6G will require the installation of many more small cells, with Wi-Fi for high-speed user access. These could augment existing Wi-Fi bands (2.4 and 5 GHz) with 6 GHz and 60 GHz when these bands are permitted. Proliferation of small cells will be more feasible because of lower costs and easier installation with wireless point-to-point links instead of fibre, and mandatory sharing. “Wireless fibre” links could use light-licensed (open access to licensed service providers for connecting to the internet) spectrum in the 60 GHz (V-band) and 70-80 GHz (E-band). Gigabit delivery at far lower cost than fibre could be deployed across urban, semi-urban, and rural markets.

Small cells for users need to be built out with “wireless fibre” links from where fibre terminates in much of the country, in urban as well as rural areas. An alternative depending on costs is satellite links to small cells. In effect, the need is for the national fibre network, BharatNet, to be extended to non-urban users outside district and block headquarters. Small cells funded by the Universal Service Obligation Fund combined with the BSNL’s and other installed networks could fulfill this need, with service providers given non-discriminatory access on payment through revenue sharing. A consortium approach with private sector leads could be considered.

Shared Spectrum & Infrastructure

A burdensome remaining constraint for network proliferation is licensed spectrum costs. Yet, the alternative of giving access to a spectrum pool without auctions for a share of revenues would probably result in much higher government revenues, as happened with licence fees after NTP-99 (see charts).

Chart 1: Operator Revenues ($ Billion)

https://www.ibef.org/download/Telecommunications-June-2020.pdf

Chart 2: Revenue Share Collections Exceed Auction Payments After NTP-99

          Telecom Auction Fees Foregone vs Licence Fees + Spectrum Charges

For explanation, see: https://organizing-india.blogspot.com/2020/08/configuring-indias-digital-ecosystem.html

Shared access by licensed telcos to pooled spectrum will enable broadband for more areas and people, with full utilisation of unused spectrum greatly increasing traffic and revenues. The DoT needs to start with regulations for spectrum bands in 60 GHz, 70-80 GHz, and 6 GHz. Thereafter, regulations could be considered for shared spectrum without auctions. (1)

Debt Resolution for Cash Flows

An immediate priority for the sector is sustainable cash flows. The burden of adjusted gross revenue (AGR) and spectrum usage dues arose from misconceived policy errors, by efforts to include unrelated revenues, and overcharging for spectrum. Debt restructuring customarily involves elements such as reduced principal (“haircuts”), interest waivers, and extension of repayment periods, to enable sustainable cash flows. Much of the principal for AGR dues was created by including revenues unrelated to the licences to be paid for, an error corrected going forward. Past licence-related revenues would be much less, and favourable judgments prior to 2019 upheld this. The interest component in AGR dues is about three times the principal. The government could justifiably adopt policies to reduce most or all outstandings with this reasoning, as also consideration of the effort, cost and hardship endured by service providers, their employees, and the public for service deprivation of the critical support that broadband can/could have provide/(d). Further, this would also facilitate investment for better services.

Corrective Policies, Laws, Regulations

A participative process on these issues starting with debt resolution could be used to frame policies going forward, including the requisite legislation and regulations. The above measures can revive and invigorate our telecom sector.

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Shyam (no space) Ponappa at gmail dot com

(1): See “Enable Spectrum Usage on Feasible Terms” at:  https://organizing-india.blogspot.com/2020/03/indias-self-goal-in-telecom.html

List of Articles with Hyperlinks

1 FX Reserves & Infrastructure

[Finance/Economics]

2 The Rewards of Excess: Benefits of Growth Exceed Costs
[Finance/Economics]

3 Learning from Our Champions
[Goals, Tasks & Project Management

4 Organizing Aviation (Competition, Open Skies ...and Bust?)
[System (Re)building: Organization & Systems] 

5 Organizing: Biofuels (More Energy for Ethanol and Biodiesel!)
[System (Re)building: Organization & Systems] 

6 Thinking Big - Scale, Ownership & Results
[System (Re)building: Organization & Systems]

7 Organize - by the Judiciary? (Dispute Resolution & India's Body Politic)
[System (Re)building:Organization & Systems]

8 A Tale of Two States (Gurgaon vs Bangalore)

[System (Re)building: Organization & Systems]

9 Organizing PSU's: Performance is the Key
[System (Re)building: Organization & Systems]

10 Organizing Ourselves - 1: Systematic Reforms (It Can Be Done Here)
[Goals, Tasks & Project Management]

11 Safeguarding India's Capital
[Finance/Economics]

12 India’s Growth Engines: Services + Manufacturing (Breaking the Mould)
[Goals, Tasks & Project Management]

13 Prioritization & Planning: A ‘Ballooning’ Approach (A Wish List for India's Dream Team)
[Goals, Tasks & Project Management

14 Governance Successes (Bull's Eye for Governance)

[Goals, Tasks & Project Management]

15 Organizing Renewables- Next Steps for Biofuels)
[System (Re)building: Organization & Systems]

16 An Investment Fund for India
[Finance/Economics]

17 Integrated Area Planning (Spatial Planning) [Infrastructure: Rural & Urban]
[Goals, Tasks & Project Management]

18 Tata's Corus Buy-A Game Theory Analysis
[Game Theory: Collaborative Gains]

19 Productivity Reforms: Government from Ruler to Facilitator (Beyond India's Tipping Point)
[System (Re)building: Framework & Principles]

20 Productivity & Regulatory Constraints (Opportunities for the Left)
[System (Re)building: Framework & Principles]

Save Telecom With A Reprise Of NTP-99

Radical steps are needed to fix the telecom crisis.

Shyam Ponappa    |   January 2, 2020 

If telecom and connectivity are not revived, one of our most successful sectors since liberalisation will be incapacitated.

To fix this devastated sector, look no further than the National Democratic Alliance (NDA) government’s action 20 years ago to rescue and revolutionise telephony in India through the New Telecom Policy 1999 (NTP-99). It was before India’s growth story and the mobile phone revolution. The telecom sector had stalled, and some 15 operators were struggling for survival under the burden of high licence fee demands, limited customers, and too much competition, with no money to build out networks to earn more revenues to service their overwhelming debt. That was when prime minister Atal Bihari Vajpayee and his team made a bold move, working with industry and professionals to effect what seems in retrospect like magic. They implemented some constructive policies for telecom that set in motion phenomenal growth with vast changes in markets and behaviour.

The situation in 1998-99

The sequence of events began in 1998, when the Prime Minister’s Office (PMO) decided to look into the problems in telecom. After considering studies by ICICI and the Bureau of Industrial Costs and Prices, the PMO consulted with professionals within and outside the government, stakeholders in industry and financial institutions, and formulated the NTP-99. While the policies were not optimal because political accommodation was mixed with objective-oriented processes, a fundamental improvement was that government collected charges from operators as a share of revenues actually earned, instead of up-front payments on auction commitments for licences. This was a difficult political decision, because of a mistaken public perception that it was a giveaway to the operators. The government held firm despite being taken to court, and the decision turned out to be clearly in the public interest, as results detailed below were to prove.

Success did not follow immediately, because the government’s share was set too high initially. However, two developments in 2004 changed the trajectory. Government’s share of revenues was lowered to 8 per cent of revenues, and “calling party pays” was introduced for users, as against both caller and receiver having to pay for a call. This boosted supply as well as demand, resulting in explosive growth in mobile telephony (see Chart 1), making India among the fastest growing and most attractive markets. In hindsight, government collected far more through revenue-sharing than the auction commitments, as shown in Chart 2. Knowing this, it is incomprehensible that governments haven’t built the sector to improve government revenues, instead of bleeding it to the point of collapse.

Source: https://www.ibef.org/download/Telecommunications_171109.pdf
Taken from citation in: http://organizing-india.blogspot.com/2016/03/connectivity-lets-apply-what-we-know.html

Sources - Table
Sources

Column 1 - 1999-00 to 2006-07:

Indicators for Telecom Growth, Study Paper No. 2/2005,TRAI:

https://main.trai.gov.in/sites/default/files/ir30june.pdf

Columns 2 & 3 – 2002-03 to 2009-10:

Peformance Audit Report on the Issue of Licences and Allocation of 2G Spectrum by the Department of Telecommunications, CAG:

https://cag.gov.in/sites/default/files/audit_report_files/Union_Performance_Civil_Allocation_2G_Spectrum_19_2010.pdf

Columns 2 & 3 – 2010-11 to 2014-15 are from the TRAI web site:

http://www.trai.gov.in/Content/PerformanceIndicatorsReports/1_1_PerformanceIndicatorsReports.aspx


The present crisis

The telecom crisis today is much the same as in 1998. Our regulatory policies have resulted in price-wars and beggar-thy-neighbour strategies disrupting the market, while most people are deprived of good, reliable services. Thus, while India has incredibly low prices, they are unsustainable, far below what could reasonably be expected from the high volumes and the experience curve reduction in costs. These price levels do not support even the maintenance of current service levels, let alone expanding coverage to the sparsely populated countryside. Urban areas with low prices often suffer unreliable services of low quality, while less populated areas are deprived of services altogether. Further, the squeeze on operators is aggravated because of the Supreme Court upholding the government’s apparently gaming approach to defining “Adjusted Gross Revenues”, imposing retrospective dues on all spectrum holders.

The government needs to gather the resolve to do what prime minister Vajpayee did in 1999: A radical intervention to revive the telecom sector and the economy. PMO officials have reportedly been meeting with the Department of Telecom for months. Now, we need decisive action, including:

• Revenue-sharing for spectrum charges instead of auction fees, as was done for licence fees in 1999, as the major beneficial change. It would also result in more rational use of spectrum as a public resource for connectivity and growth, instead of just for government revenues.
• Removal of additional spectrum usage charges would greatly facilitate communications for development and growth, correcting impediments to efficiency in India compared with the rest of the world. A windfall profit provision could be instituted in the event there are excessive profits, or inappropriate diversion of funds.
• Policies to enable new technologies. For instance, the latest version of Google Pixel hasn’t been introduced in India because 60GHz is available only with limited bandwidth. In 5G, India is already far behind, and will take years to benefit from this without drastic changes in spectrum access.

Additionally:

• Pooling of spectrum to provide broader bands for higher throughput. This can be done through geolocation database-driven shared spectrum, as in Licensed Shared Spectrum (LSA) in Europe, or Authorised Shared Spectrum (ASA) in the US, and harmonising 60GHz regulations with the US FCC, but limiting its use to operators.
• Possibly structuring spectrum sharing through a consortium approach to infrastructure, and unbundled, use-based costs for delivery. This can be done by separating infrastructure (network development and management) from service provision.
• Another possibility is to have two or three vertically integrated consortiums, each with its own infrastructure (which will require significantly more capital investment).
• An active government role in coordinating industry-wide, consultative, goal-oriented action through the formulation of enabling policies and regulations. Multiple government agencies are involved, namely, DoT, MeitY, TRAI, DD, Finance, Law, as well as state governments for uniform Rights-of-Way and tower installation.

Functioning without mobile telephony seems unimaginable today. Instead of being among the leaders using telecom for our benefit, on our present trajectory we are likely to miss these opportunities for years — unless the government finds the imagination and courage to act.

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Shyam dot Ponappa at gmail dot com