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Journalism of Courage
India8217;s large business houses have historically played a fundamental role in industries that are critical to national development. That the telecommunications industry in India received infrastructure status only in 1997 8211; 98 budget, reflects the low priority it has been accorded.
Without strategic positioning, national consensus and political will, India will not achieve a mere tele-density of 2.2 compared to China8217;s 9 by the year 2 000. Only 22 million fixed and 4 million cellular phones will be installed in India compared to 116 million fixed and 8 million cellular phones in China.
Both the private sector and the government must share the blame for this state of affairs. Operating in a competitive market place and without a clear assessment of the economics of providing telecommunications services in India, the private sector willingly promised an exorbitant entry price to obtain a piece of the cake. When the private sector slowly began to comprehend the implications and sought the government8217;s understanding to re-examine unrealistic NPV calculations, it faced inertia and/or resistance at various levels in the system.
There may have been fear of losing monopoly control over what some perceived to be a finite or shrinking telecommunications pie rather than an expanding market with room for many players.Fortunately, both government and industry are climbing the learning curve. There has been a heartening attitudinal shift at the helm of India8217;s decision-making apparatus. This sea change is most evident in the pragmatic and leadership role and the strategic initiatives adopted by the Telecom Commission8217;s Chairperson, by the Finance Ministry and the country8217;s financial institutions. Government and industry are now seeking long-term joint-maximization outcomes to create a viable and healthy telecommunications industry.There is a growing realisation that tax payments to the government must be rationalised. Licence fees could be replaced by an escalating tax rate pegged to an expanding subscriber base and/ or enhanced per subscriber revenues or by revenue-sharing arrangements when industry achieves positive cash-flows. The global oil industry has many good models that could be adapted to suit the Indian telecommunications industry and the government8217;s revenue requirements. A healthy industry will have the capacity to pay handsome revenues to the government in the medium -and long -term, it will provide affordable and efficient telecommunications services to the largest number of consumers. But national consensus is required if India is to achieve the status of a significant telecom player. Eliminating inter-bureaucratic rivalry, a blue-print for multi-media convergence and a scheme for financing the industry and installing networks are essential and urgent ingredients. It also requires backward and forward integration and linkages among service -providers, IT software and hardware manufacturers, TV producers and content providers.
