I have been observing the Telecom/Internet Infastructure in India both as a former vendor to service providers and also as a customer. I am of the firm opinion that in its current state, the sector will not grow and also shall hinder the progress of the rest of the country by not fulfilling its role as a connectivity provider.
I feel it is time to break the sector proactively and nudge it toÂ bring in disruptive innovation.
Run-down Telecom Infrastructure
The Indian telecom sector is bridled with so many inefficiencies. The telecom companies have no incentives to create innovative offerings, let alone raise their quality of services.
Part of theÂ problem might lie in the fact that creating infrastructure for a pan-India telecom service from theÂ ground up is a huge task. Maintaining whatever infrastructure that has been created is evenÂ more of a nightmare.
Every telecom company in every circle needsÂ to dig ditches across cities, towns andÂ villages. Along highways, waterways, railwaysÂ but mostly in the air on tree tops, roof-topsÂ and even on electricity poles. The CapExÂ sunk on this infrastructure goes waste many aÂ times, due to the whims and fancies ofÂ individual local bodies who decide to fix aÂ road, dig a tunnel or just embark upon someÂ â€˜developmentalâ€™ work. The fuel costs that goesÂ into powering the diesel generators, invertersÂ for the base stations and repeaters easilyÂ consume most of the OpEx.
With the infrastructure in such a mess, noÂ wonder consumers are short-changed orÂ presented with a lack of alternatives.
There are other issues that contribute to the mess too. The state-owned telecom companiesÂ serve more as Indiaâ€™s equivalent of a Social Security program rather than efficient andÂ innovative Service Providers. Even ignoring probable corruption, the very nature of their slowÂ and staid operations does a huge disservice to the young and dynamic nation.
Suggestions for a viable and efficient sector
Now, after a thorough panning of the existing situation, here are some suggestions for fixing theÂ sector.
Break the state-owned operators into two parts initially – one, to pool all their infrastructureÂ assets, the second to hold all their operations including subscriptions, plans, etc. The operationsÂ part could be further broken into smaller units – a la Baby Bells.
The infrastructure, including highly valuable land, buildings, country wide fiber, last mile copper,Â etc should be vested with a new company probably called – The National CommunicationsÂ Infrastructure Company. All the private operators should also be asked to hand over theirÂ infrastructure assets for a corresponding stake in the new company. This company to be run byÂ professional management drawn from the government, private businesses, academics shouldÂ be the sole custodian of creating, maintaining and innovating country wide communicationsÂ infrastructure.
From no MVNOs to only MVNOs
A Mobile Virtual Network Operator (MVNO) builds consumer services on top of leasedÂ infrastructure – both last mile and upstream. Currently, India has no MVNOs by design.
The Infrastructure Company should be able toÂ lease out the infrastructure to all the existingÂ players under a compulsory mandate. AllÂ existing telecom operators should transition toÂ become MVNOs.
With the costs of capital coming down, thereÂ could be new special purpose MVNOs whoÂ provides only B2B services, M2M services (veryÂ relevant in the context of 100 Smart Cities/IoT),
P2P services. With decreased responsibilities,Â and increased focus, the new InfrastructureÂ Company as well as the new MVNos are boundÂ to innovate and create valuable products andÂ services for their users. The consumers benefitÂ from a decent competition and reliable services.
The society at large is benefitted by a decreaseÂ in the number of road-cutters. Mother earth willÂ be happy because of reduced pollution.
- McKay Savage (https://www.flickr.com/photos/mckaysavage/3921003774/)
- Ken Banks (https://www.flickr.com/photos/kiwanja/3170290086/)
- All logos for representation purposes only