India has made giant strides in digital technologies. India has a world-class mobile network<\/a> for voice and data. The large network supports a vibrant digital economy. We have achieved enviable success in our payment systems, and see impressive growth in e-commerce, healthcare, education, transport and entertainment, to name a few.
There are over 100 times more phone connections than the barely 8 million 30 years ago, when India began the telecom reform and deregulation process. We have come a long way from the time when the government was the monopoly provider offering a single service (fixed-line telephony). Mobile services have vastly overtaken fixed-line services. A mix of government and private players provide telephony and data services.
With the sharp growth in access to broadband internet, over 4G, 5G, fibre etc., consumers enjoy hundreds of over-the-top (OTT) services which the large underlying telecom network enables. It is difficult for most internet users a life without access to popular OTT apps and services like Google<\/a>, Facebook, Twitter, WhatsApp, Spotify, Gmail, Uber, PayTM etc. Thanks to the telecom network and OTT services<\/a>, the sector significantly reduced the disruption and pain caused by the Covid pandemic. India and its telecom sector have much to be proud of.
The government is therefore right to support and promote digital services as powerful instruments of growth and governance.
However, an occasion like the WTISD<\/a> merits a closer look at the existing gaps and areas in which India could improve or change direction.
A key shortcoming is the huge digital divide in the country. The divide is sadly greater than what is indicated by the statistics put out by the Telecom Regulatory Authority of India (TRAI<\/a>), which report on the number of live telephone or internet connections but not the actual number of unique users. The numbers ignore many users with multiple SIMs, a fact borne out by the over 100% teledensity in metro cities like Delhi and Mumbai and the significant fall in subscriptions in recent years.
Similarly, statistics downplay the challenge of increasingly expensive smartphones and the need for more relevant content, especially in fewer mainstream languages. Less than half of India’s telecom users come from rural areas where the population is nearly twice that of urban. This explains why India is second in the world in connected people and first in those unconnected. Correcting such a divide needs careful regulatory strategies and a mix of inputs like technologies, research, innovation, smart players, entrepreneurship, and business models.
Robust competition and private investment will make the task easier; high regulatory costs will make it harder. Fortunately, India has sufficient evidence of the benefits of a liberal and competitive telecom market. Given the nature and extent of the challenge posed by the digital divide, there is good reason to expand it and mobilize the available technical, financial and business resources.
Special attention will be needed to promote private investment since the government is no longer a major player in the telecom market and, therefore, cannot be seen as a service provider of last resort.
The above analysis, if accepted, provides a set of criteria by which to evaluate some recent government proposals. The first one is the Draft Indian Telecommunications Bill, 2022, which proposes expanding the scope of an already extensive and burdensome licensing regime in the sector.
While currently, providers of all network services require a licence, the Bill proposes to license even OTT services<\/a> like WhatsApp, Zoom etc. This will fragment internet content into two categories – one licensed, the other not- and violate net neutrality. The higher regulatory burden can only shrink the use of OTT services when we should be making it easier and cheaper to access services of obvious popular appeal and relevance.
The same analysis also tells us the problems with the DoT’s interest in auctioning satellite spectrum<\/a>. DoT recently sought TRAI<\/a> recommendations on how this spectrum can be auctioned. It ignored that the satellite players can, and do share spectrum, globally. They simply do not need exclusive access at all. This spectrum is unlike the mobile wireless spectrum, e.g. 2G, 3G, 4G and 5G, where exclusive access is a prerequisite to offering the service.
So, auctions of cellular spectrum promotes its efficient use while the auction of satellite spectrum<\/a> does the opposite by restricting spectrum usage to one player when many can use it easily to provide services. Insisting on auctioning satellite spectrum will help a bigger player corner it and reduce competition between players and technologies. It will make it less likely for satellite services to be used in rural areas where they are the best option and where services are needed most urgently.
India can take justified pride in world-class cellular services. There is every reason to lower the regulatory burden for such services. However, increasing the burden of providing OTT by licensing them or satellite services by making it prohibitive to access spectrum is a bad way to reward the success of cellular players.
On WTISD India must focus on expanding access to telecom services by doing all possible to improve the economics and ease of providing competitive networks and services.
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