Future Trends in Indian Telecom

Given the pace of expansion of telecom, it is very hard to predict the future trends in telecom industry. I am trying my bit to make some sense of the same. Consolidation. That is the buzzword of the present state of industry. However, barring Airtel, there seems to be no other provider who would straddle in the fixed line as well as mobile telephony business. Airtel would be keen to gobble up the small time fixed line operators in order to avoid the duplication costs. They have done so with their mobile telephony business.

Why consolidation is a not good for us? For all the arguments that these companies forward in the name of economies of scale, ultimately it boils down to the user options and choice. There are a few players now in the telecom landscape. Few of them who had bid for the licenses exited out their business realizing ineffectual regulatory regime. Some of them had jumped in the fray little realizing the incremental costs. In the meltdown that happened, the few with deep pockets survived. So what do I do if I am not happy with one operator? Well, given that the thrust on quality of services is almost nil, there is nothing really to differentiate one from another. In fact, the multiplicity of their plan options serve to confuse me rather than track my usage options or get me the best deal on my investment. True that these people are not in charity. However, when I get to hear first person accounts of faulty billing and a raw deal that they give to their distributors, well, I am better off minus all the headache. Especially with the GSM operators. We might see better billing systems in the future!

Similarly in the fixed line telephony business. BSNL hardly has any competition in this field. It s true that people are surrendering their phones on a big scale and shifting on to mobile telephones. However, for broadband access one has to depend on the fixed line operators. Especially when Internet through cable has been a non-starter. I have read first person accounts of Sify broadband here. Well, there are enough reasons to tear your hair apart rather than fight out for what is due to you given the upfront payment costs that one has incurred. Given the talk of imminent merger of BSNL and MTNL, that again is not really a good idea. It is like merging devil and the Satan together. Two sides of the same coin. I have a feeling that the stage maybe set up for privatization of this behemoth. Howsoever I may loath at this entity; the fact is that one needs them. This is because, being a government enterprise, it is essentially important for national security because telecom is one of the most crucial sectors of the economy. There is no guarantee that a private operator may not pull the plug in times of emergency. Well, perhaps it may sound laughable at this time; no other country allows FDI to the extent that we have done. Given the fascination of Indians to “emulate” the white races, well, it is surprising that we have not learnt this thing from them. For arguments sake American government does not allow FDI in its own telecom infrastructure.

Hence, consolidation is not good for the consumers.

Broadband Access down the line would be feasible. In my earlier post, I had mentioned that how Reliance would change the face of Internet access. However, that would take another 5 years or so to be commercially feasible. That is my estimate. Until then, one has to suffer the insanities of the government owned telecom operators. Interestingly, there is 100% FDI in the Internet sector. However, there are not players in the international market that are falling over to invest in this sector in what is called as IT destination of the world. One major reason is the local loop owned and operated by BSNL. They are not ready to either open up the same or willing to share it on a national scale. Part of the reason is that much of the local loop cannot be utilized for broadband. Perhaps because of outdated exchanges. Where is the thrust on the quality here?

In the article under telecom muddle, I had mentioned about carrier access codes. It would give a real choice to the consumers to choose the operator to carry voice service across the nation at extremely competitive rates. However, the recent mandate by TRAI had ended up in a deadlock. First, it would give an advantage to the private players to drop the prices to capture the market. BSNL would be hurt in the process. If Reliance can offer unlimited calls on its network for a fixed limited sum, it is trouble for others too. For too long we had to suffer high access rates. I believe that once the broadband is a reality, I would prefer to load up something like Skype. It would be real freedom to call anyone anywhere in the world to any Skype user. Perhaps we might see the growth of telecom operators like Vonage in India. That would be the death knell of companies like BSNL here. It is possible down the line though.

Last but not the least. We might just have a better regulator. That would REALLY look in the interests of the consumers. Complaining to TRAI on the service issues of telecom operators does not yield any result. It is much better to articulate the same concerns here. What we need is a voice of the consumer. I really wish that someone from TRAI actually looked in the forums designed specifically to discuss the issues of ISP. Perhaps then, we might have some action taken on ground. In India, just like broadband, this seems to be a far-fetched dream!

Discuss on: Sify Broadband, Tata Indicom, Airtel Broadband, Reliance Broadband, MTNL - BSNL Broadband, Dial Up, Others

This post was submitted by Dr. Abhishek Puri on the Broadband Blog on Techwhack.