Dial G for government

A third of your phone bill goes in taxes. Millions of the poor still don8217;t have phones. When will these realities change? Unless you are a teenager for whom MMS is horribly passe and an I-pod phone, no longer a novelty, you will consider the telephone the most potent metaphor for economic change in India. And this is because most of us remember only too well the days when booking a trunk call was a day long agony and getting a phone connection was a mark of social clout. In the process we forget that the heavy hand of government still rests on telecommunications. As a finance ministry strategy paper states, Rs 30 out of every Rs 100 in landline or mobile bills goes to the taxman. This is apart from the so-called access deficit charges ADCs 8212; taxes levied on private operators, who pass it on to subscribers, to supposedly help fund BSNL8217;s social obligations on providing universal connectivity.

TRAI has been battling with the government on ADCs for some time now. But on the 8220;direct and indirect taxes, fees and levies8221;, as the ministry puts it, there has hardly been any debate. Hopefully, the finance ministry has started a process that will see another incentive for operators to drop rates across the board and increase coverage. Coverage is another blind spot in the popular assessment of Indian telecom. Breathless media reports on a couple of million mobile subscribers being added every month ignore the fact that not only is general teledensity appallingly low, even mobile usage is far less impressive than in many developing countries. Plus, there are ungodly policy complications.

Wireless fixed phones are a great answer to poor rural connectivity. Costs increase for wireline operations because of last mile wiring obligations. But, in a typical Indian response, the fact that some city slickers took advantage of the portability of a wireless fixed phone 8212; using it as a quasi mobile 8212; led to the withdrawal of fiscal incentives from this form of telephony. The obvious sufferers are rural subscribers. Would that the government think like jaded teenagers 8212; communications are not a luxury but a boring necessity.