INDIA: Technology Helps Untangle Red Tape in Communications

By Ranjit Devraj Reprint | | Print |

Ranjit Devraj

NEW DELHI, Nov 14 2003 (IPS) - Technology is coming to the aid of reformers determined to leapfrog over a tangle of licences and permits that have held back India’s communication sector for decades.

This week, India’s Telecommunications Minister Arun Shourie, who also holds the disinvestments portfolio, brushed aside stiff opposition from vested interests to announce details of a ”single licence” system that would govern a bewildering array of fixed and mobile services that have mushroomed across the country in recent years – each with separate tariff structures.

According to Shourie, the trouble with licensing is that they create vested interests which then worked to prevent progress and even resist the march of cheaper and better technology. This, he added, has discouraged investment in India’s rapidly expanding telecommunications sector.

Shourie’s unified licence scheme settled a war raging in India between the providers of Groupe Speciale Mobile (GSM) cellular handphone technology and those cutting into their business by offering similar services through the more advanced code divisions multiple access or CDMA technology.

Under the earlier regime, different licences at vastly differing rates allowed operators to offer cellular, limited mobility and fixed-line services. But some providers with short-distance licenses began to use technology to provide ”roaming” facilities.

”The state cannot keep providing compensatory packages to those who are disadvantaged by each wiggle of technology or fortune,” Shourie, a journalist-turned-politician.

He was responding to demands for compensation by GSM providers, who argued that they had to pay large licence fees for their services and were therefore entitled to protection if disadvantaged by the entry of CDMA providers.

Shourie said it had become impossible to fine-tune the flood of technological change, what with service providers offering nearly 600 schemes and packages with differing combinations of attractive prices, credit arrangements, deferred payments, handset choice and every available voice and data service.

The GSM operators, grouped together as the Cellular Operators Association of India (COAI), took the issue to the Supreme Court on Thursday and publicly denounced Shourie’s unified licence as ”partisan and one-sided”.

What worries the COAI is that powerful players that use CDMA technology, such as Reliance Infocomm, will now use their cheaper and better efficient technology to offer consumers more for less and wipe out GSM in India. Their services include fast Internet as well. Earlier this month, Reliance beefed up its network by acquiring the global broadband provider Flag Telecom – which has 50,000 kilometres of undersea cable networks stretching from the United States to Japan – for a sum of 207 million U.S. dollars.

”We are looking ahead of just mobile telephony – we are planning a revolution that will cover millions of Indians,” said Amit Khanna, spokesman for Reliance Infocomm.

Khanna said his company’s next target was the estimated 100 million Indian homes that are hooked to cable television, which would be used to provide voice and data as well as video services.

Reliance Infocomm already has five million subscribers for its CDMA-based cellular service. With the blessings of the unified licence scheme that allows it to legally provide roaming, its subscriber base is expected to grow in leaps and bounds.

On Thursday, the company paid the government a total of 130 million dollars as ‘migration’ fee and a 100 million dollar penalty for providing roaming illegally.

”When technology enables people to avail of or provide a service and licences prohibit it, the licensing regimes will be violated,” said an indulgent-sounding Shourie, departing from the iron-fisted approach of his predecessors.

According to Shourie, experience has shown that setting enforcers on violators only encouraged corruption, while technical sophistication was constantly making policing more difficult.

The minister cited the example of how the government tried to crack down on people using Internet telephony to circumvent India’s high long-distance tariffs a couple of years ago – but ended up legalising ‘voice over internet ‘ while lowering tariffs on regular telephone lines.

Another curious case of technology triumphing over those who would harness it for profit is the case of cable television operators that resisted plans to introduce conditional access systems (CAS).

CAS involves using a set-top box and allowing the government to monitor actual usage of television channels and claim a share of profits.

After shifting several deadlines and much lobbying, the government failed to introduce CAS, except in southern Chennai city and has shelved plans to get cable operators elsewhere to comply.

This month, both the government and the cable television providers were defeated by the emergence of direct-to-home (DTH), which allows users to capture satellite signals using a small dish antenna – and for about a third of prevailing costs.