AmazingTransformation of Telecoms in India

(Apply, Apply – No ReplyTo

Haath haath mein telephone Gaon gaon mein Internet)

ByDr T.H.Chowdary

* Director, Center for Telecom Management & Studies* Chairman, Pragna Bharati (Intellect India), AP

* Former Information Technology Adviser, Government of A.PChairman & Managing Director

Videsh Sanchar Nigam Ltd., BombayT: +91 (40) 2784-6137/6667-1191(O)

F: +91 (40) 6667-1111 (O) Talk @ Helapuri Fort Group, Hyd: 12 Nov 2010

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Spectacular Growth Since NTP-1994

1947 1994 2009 2010

Telephone 80K 400mln 750m

PTs 420 >4m

Waiters 2x the Haves No waiting No waiting

Waiting time 3 to 5 years Upto 10Y On demand On demand

* Highest Annual Growth 120 mpa

* World’s 2nd largest system

* Highest Growth Rate in the world

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Wait & Wait.....

Telephonic address: “WAIT LIST” Apply for the grandson Consult: Sooth sayer when the Trunk Call

comes Post - It can't be slower ; Don't “telegram”

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Waiting Hataao!Becomes: Waiters Hatao

(like garibi/garibinko hatao!) Renew by priced /prescribed forms (Rs. 10/-) 50% disappeared Re-renew by putting a deposit of Rs.1000/- 50% disappeared Own Your Telephone (OYT) First Rs. 3000;

revised to Rs.8000/-) 25% disappeared Tatkal Rs.40,000 deposit

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Wrong Numbers 1/2

Dead Telephones Dead phones & Burglary in Mumbai

“That is why I say, the burglar must be from out of town. He cut the telephone thinking it works”

Inflated Bills “Pay First: Complain later - “Fiat car for sale to pay telephone bills”

“Look! IT may be raining outside...

“No sir! There are only clouds!” “If it is wrong number why are you answering?”

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Wrong Numbers 2/2

Unsure in any Need. (Unsafe At Any Speed: Ralph Nader about US Cars)

“Lots of phones on the table.This for incoming callsThat one for outgoingThis for wrong numberThat farther one for cross talkThat beyond for musicAnd that last one – dead for 3 months Cables dead; Tent over a trench,for months

“men@work” In order to not inconvenience people frequently, we have

decided to leave it like that permanently”thc_ctms

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Rajya Sabha Question

M.P: What steps are government taking to save people from wrong numbers, cross connections, dead phones, inflated bills, delayed trunk calls, call drops, very old telephone directories?

Minister: C.M.Stephen

“There is no compulsion to have a telephone. One is at full liberty to surrender”

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Monopoly's ills 1/2

Unbridled because it was by a government department

Socialism meant “telephone is for rich man, so fewer the better; the worse it works, less the profiteering so, little investment & bad maintenance

Raise prices to generate capital funds 50% of billed amount not for service Plan to generate jobs, not for work

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Monopoly's ills 2/2

One employee for 12 telephones in the 1980s in DOT

(Now 1 for about 300 in BSNL; 1 for 10,000 in P-Telcos)

No new services like mobile phones, e-mail, FAX; radio-paging, Internet, Video conferencing - all these are for the rich;

inadmissible in Nehruvian Socialism

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PCI

AX TSP

Time

(a) Affordability

A PCI/ Tele-Service Price- PCI: Per Capita Income- TSP: Telephone Service Price- A: Affordability

Bring down price to increase affordability

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Affordability of Telephone

1951 1994 2007 2010

Revenue /Line at current exchange parity

$125 $250 $125

Rev. as % of PCI

2.5 1 0.12 0.06

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Affordability PCI ------------------------

Tel. Svce.Price

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Cost of an year's telephone service vs: PC GDP

• Affordability increasing rapidly.

• The annual cost for a basket of services was 2.5 times PCI in 1951; equal to PCI in 1994 and now 0.00 in 2010!

• So “Haath mein telephone:

Carpenters, Vegetable Vendors, Milkmen, Mason, Plumber, Driver, Mazdoor, Electrician, Beggars ( in Tirumala, Shirdi..)

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Growth of Phones in India($ mlns)

Year 1997 1998 1999 2000 2001 2002

A 14.54 17.8 21.63 26.79 32.97 39.13

B 0.34 0.88 1.2 1.88 3.58 6.43

Year Dec '03 Dec-'04 April-'05 March'06 Sept'07 2008 2010

A 41.42 44.87 41.43 41.54 40.75 39.42 30 mln

B 10.48 34 52 90 165 310 750

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A: Fixed line telephones including WLL ( PSU+Pvt )B: Cellular mobile phones ( GSM+CDMA)

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Teledensity

India Metros (4 cities)

Other Urban ( about 6000

towns)Rural

65% >100% to 150%

70% 30%

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Sale of Cell Phones

Year 2001 05 06 07 2010

mlns 2 31 74 90 200

PCs sold/year: 7 mln PCs in use : 25 mln There are 60,000 retailers of cell phones A cell phone is changed on eh average in 9 months! Nokia, Ericsson, Motorola, LG are the leading vendors

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Mobile Subscribers

• Prepaid : 90%

• Churn : 15%

ARPU/month

Year 2000 2001 2002 2003 2004 2005 2006 2007

$ 29.31 24.73 19.64 14.08 11.68 9.50 8.33 5

Indian Software Industry Exports

1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01

US$ Million 1,124 1,755 2,700 3,900 5,700 8,000

2001-02 2002-03 2003-04 2004-05 2008 2009 2010

US$ Million 10,000 12,000 16,000 21,000 38,000 48 bln 54 bln

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Internet & B.B

160 ISPs

80 mln Internet users

10 mln Broad-band subscribers

65% of 750 mln cell phone users access Interent

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Telecom Demonopolisation (1/2)

1984-'89: Rajiv Gandhi ended State monopoly on equipment production & launched C-DOT

1991: P V Narasimha Rao began ending State monopoly on services.

(socialism=state capitalism) 1994: National Telecom Policy ended case by

(suit) case licenses 1997: Statutory Telecom Regulator, TRAI May-Aug 1998: BJP-led NDA's IT &SW; Internet

policies thc_ctms

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Telecom Demonopolisation (2/2)

NTP 1999 Regulatory reform TRAI, TDSAT NTP '99 saved dying P-Telcos by migrating

them to revenue share & not upfront crippling licence fee payment unrelated to network & revenues

Level-playing field by corporatising DOT's services into BSNL in Y 2000 and end to STD/ISD monopoly.

Private capital, Indian & foreign (upto 74%)thc_ctms

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Beneficences

Printing Roadways;Railways; Electricity; Automobile;

Telegraph; Radio/TV; Computer Machines extended man's physical power ICTs & telephones are extending

mind/knowledge power Machines for work Men to think, divine & design Numbers replace names Convergence/ multi functional cell phone Telecoms become electronic-photonic

infrastructure for storage and transport and exchange of electronified information.

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Numbers exceed names! (population)

Nordic countries, Italy, UK, France Japan, Korea

Delhi, Mumbai.... Some persons have cellphones from different

companies Delhi, Mumbai, Bangaluru, Chennai,... are

exceeding 100% teledensity. Calcutta & Hyderabad TD is upto 150%

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Investments Poured in (1/2)

P-Telcos put in Rs. 200,000 cr

BSNL/MTNL share reduced to 16%(8% in mobiles)

Annual investment in the Sector > Rs. 40,000 cr

Annual revenues Rs. 200,000 cr

More than Rlys & Electricity

Less than only the oil & Gas Sector

Over 40 P-Telcos in fierce competition(8 to 13 in a State)

Many more P-telcos got 3G licenses

WiMaX & 3G licenses fetched Rs. 1,10,000 cr for spectrum alone

While 4G is already being deployed in Japan, USA, E.Uthc_ctms

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Investments Poured in (2/2)

Telecoms transformed into globally connected electronic-photonic highways system for information enabling Bharat as IT, SW & ITES supplier to the world

Telecoms is the most lucrative portfolio for Ministers Very scandalous licencing & PSU purchases. DOT coveted by Regional , “Secular” parties ( Rlys,

Highways, Seaports, Mines, Fertilisers too. 55 persons held the portfolio since Independence ( i/c

P.M, Vajpayee)& I K Gujral Those remembered for distinction are: Rafi Ahmed Kidwai, Jagjiwan Ram, C.M.Stephen, Sukh

Ram, Mahajan. Arun Shourie & Sushma Swaraj

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Unintended Consequence

• Telecom Equipment Production nearly dead

• R&D neglected

• India imports “know-how” not only from Europe/Korea/Japan but also China

• Indian create IP: but ownership by foreigners.

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Mis-use/ Misbehaviour

Cell phone talk in public places- roads,waiting rooms; in lifts; buses; trains; in queues; walking & talking

Addiction, fiddling; profane, SMS-ing – Rs.18 cr/day Vulgar ring sounds, ring backs So small, tantalisingly “thievable” Annoyance & public nuisance increasing Love-zihad Seeing & reading screens (TV, PC, cell phone)

no reading & writing & thinking.thc_ctms

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What are the services not provided No Telephone (Directory) Services

BSNL's by BSNL from BSNL numbers only. No P-Telco publishes whom to approach for

help / complaint / grievance Executive's Name Tel No / Mobile No / e-mail

BSNL Directories used to publish this information i/c hierarchy

P-Telcos don't hold Telephone Adalats ( i.e like BSNL does)

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What is yet to be realised

Internet to every village Internet to every Educational Institution & class room Broad-band to every town/village Total territorial coverage Intellectual property creation (R&D); Manufacturing (China, Korea recently; Japan earlier) India can.eg: Indian cos. Have within the last 4 years

captured 20% cellphone handset market! A Mission like C-DOT to make India sleep reliant in

ICTs. Set up a “Bell-Labs” (formerly of AT&T) ICT Universities

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Dhanyawad:

Thank You

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