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Wednesday, July 15, 2015

Billion telecom subscribers feeding into Digital India

Last week, a release by India’s telecom regulator TRAI said that India’s telephone subscriber based had hit one billion phone lines. This includes a paltry 26 million landline phones too, which have been anything but growing during these years.

The historic milestone comes just days ahead of the country ready to get into the 25th year of economic reforms.

The three big telecom companies – Bharti Airtel, Idea Cellular and Reliance Communications – whose stocks are listed on the stock exchange clocked nearly Rs. 100,000 crore or nearly $16 billion in revenue during the last financial year. The industry’s revenues, including those of the unlisted companies is in excess of Rs. 200,000 crore or nearly $32 billion.

Despite the scams in the 1990s and the last decade, there is little reason to doubt the success of the telecom sector. If cricket and Bollywood are the religion of the country, the familiar ring of a mobile phone can be described as the soul of every Indian. From about 18 million landline phones and less than half a million mobile phones in 1997, that is a stupendous journey.

No other infrastructure has enjoyed the success that the telecom sector has in the quarter of a century of stuttering reforms. If there are any self congratulatory messages that are floating around, it is time to stop that. A little bit of perspective will help temper the enthusiasm of those who are touting this as an achievement.

India continues to be a power deficit country with a peak power shortage of nearly 15 per cent and shortage of power will stunt growth for the industry. That is woeful for a country that is looking to alleviate poverty and accelerate growth to near double digits. With nearly two-third of the energy needs met by coal, the green brigade continues to point out that it is a cause for worry for the nation. The power sector was opened up for reforms in 1992 with eight fast track power projects, including the infamous Enron. Nearly 25 years later, reforms in distribution of power have been the slowest and the proverbial last mile connectivity continues to be a challenge.

UPA2 had promised to build 20 kilometres of roads everyday and when the government ended its term last year, the figure was no better than 8 kilometres. The NDA government has promised to take it to 30 kilometres a day beginning 2016. During the current financial year the government is hoping to build 8500 kilometres. But the worry is April-May has seen an average of 4 kilometres a day. Road Minister Nitin Gadkari has said that PPP model for the roads sector is not viable so the contracts for the next two years are being awarded through the engineering, procurement and construction or EPC route.

There has been some momentum in the last 12 months in the ports sector and over 30 projects have been awarded which will add over 250 million tons per annum capacity to India’s ports. India’s $300 billion plus goods exports could do with more efficient ports that could ship and ship in products faster, freeing up locked capital for companies.

As we enter the 25th year of reforms, it is time to reform the reformers. The half baked reform measures, evidently, have not helped. It is time for a full Monty so that it could serve as a showcase for the world. The focus now should be on identifying what India has missed out on because of tardy implementation and the half measures in the name of reforms.

For telecom, though, there is one reason for the Republic to celebrate. The man who was the telecom minister in the 1990s when the sector was being deregulated, Sukh Ram, has been cooling his heels in Delhi’s Tihar Jail, convicted on corruption charges in 2011. Now, when a former Defence Minister allegedly threatens a senior police officer on the phone, the recorded conversation has found its way to YouTube. Without the proliferation of mobile phones, could this ever have been possible?

Look at it in another way: Riding on the foundations of the telecom revolution, the recorded conversation is going viral. Are we testing the waters of the Digital India plan? 

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