Going cashless, a tall order beset with many challenges

By G Krishna Kumar, Dec 26, 2016,

In a recent TV interview, Niti Aayog CEO Amitabh Kant said that Indians will wholeheartedly embrace cashless transactions over the next six months. It is a tall order, despite the lucky draws announced for promoting digital transactions.

But then, the demonetisation may drive the “hesitant digital citizens” (people who are aware of cashless modes, but always preferred cash over debit/credit cards/net-banking etc) to adopt cashless transactions.

“Cashless” is emerging as a global trend and the government, following demonetisation, is trying its best to create a cashless digital society. A major bank in Australia has declared that it will no longer accept notes/coins. In Nordic countries, most banks do not accept cash or dispense cash in their branches. Sweden expects over 99% of all transactions to be cashless soon, and is slated to be the first cashless country in the world.

India’s cash-to-GDP ratio is 11%, much higher than the advanced economies and even other BRICS countries. A study reveals that India could save Rs 70,000 crore over five years even if 25% of the cash transactions move to cashless. Sample this: a recent report indicates that at least 90% of retail transactions in India are in cash. Compare this with the advanced countries, where the number is just 10%, while it is 40% in emerging economies. Hence, it is not surprising that India fares poorly in the 2016 Digital Money Index, published by Citibank and Imperial College, London.

The Digital Money Index uses four pillars for rating - government support, financial and technology infrastructure, presence of digital money solutions and propensity (of consumers and businesses) to adopt digital innovations. India stands at 63rd position (out of 90 countries) while Finland tops the list and China is at 38th position.

India has a better rating on financial and technology infrastructure compared to China, Korea and Malaysia, but fares poorly on propensity to adopt digital innovations. On this parameter, India is at 74th position, Korea and China are at 14th and 46th respectively. The US, UK, Sweden and Japan are among the top due to high propensity of consumers and businesses to adopt digital innovations.

India has joined the United Nations’ “Better than Cash Alliance” (BTCA). The BTCA aims to encourage governments, development organisations and the private sector to commit to the digital transition. This, along with the government’s massive thrust encouraging people to use digital modes should help India securing a higher rank in the Digital Money Index over the coming years.

A recent survey by a business daily states that six out of 10 people don’t believe India can go cashless. Well, that’s precisely how we would have responded 10 years back if had asked whether most Indians would own a mobile by 2016. Just as the mobile revolution surprised everyone, the cashless (or less cash) transactions could be the next revolution.

The current demonetisation has provided an opportunity for the public to experience cashless transactions by adopting mobile wallets. Right now, the digitally literate Indian is spoilt for choice – among others, Paytm, Olamoney, Mobikwik, Freecharge Reliance’s Jio Money, with the latest addition to this list being Airtel Money.

The government has been asking people across the country to understand different digital channels for transactions. There are quite a few examples where semi-literate road-side vendors have quickly adopted m-wallets for selling tea, vegetables and flowers, allowing even small value transactions of Rs 5.

While India is gearing up for going cashless or less cash, there are definite challenges. Many shops, even established doctors have always discouraged customers from using credit/debit card payments citing a 2% additional surcharge. The 2% additional amount is charged despite RBI ruling against charging customers. We need a permanent ban on surcharge and convenience fees imposed by merchants.

Despite the popular Pradhan Mantri Jan Dhan Yojna, over 160 million Indians are still unbanked. Sustained effort is needed from the government for inclusion of this segment.

For debit card usage in the country to improve, the point of sales (POS) terminals needs to be significantly increased. A report suggests that India has only 14.6 lakh POS terminals. The number of POS terminals needs to increase five folds to reach the average in Russia or China. The RBI has established Acceptance Development Fund (ADF-corpus through contributions from banks) for subsidising and promoting installation of POS terminals.

Banking services
Considering that credit cards and debit cards are vulnerable for hacking and also the fact that 99% of the adults have Aadhaar card, the Aadhaar-enabled payment set up as an alternative to plastic cards, must be aggressively pursued. How about using the ADF for strengthening the Aadhaar-enabled payment system?

While a basic phone can be used for banking services, it is not intuitive. Availability of low-cost smartphones, localised content and digital literacy are needed. 

Considering that we have about 30 crore illiterates, simple user experience must be ensured. We also need special focus on improving the quality of Internet in terms of its speed.

The National Payments Corporation of India launched Unified Payment Interface or UPI, a single mobile application that can be used for several banking services. However, for availing this service, smartphones are required.

In the excitement to create a digital society, security should not be compromised. This means, even if it takes longer for improving the percentage of cashless transactions, secure transactions must be ensured. The government has already embarked on an awareness campaign.

While the government’s plan for cashless transactions has drawn both applause and criticism, for its success, we need sustained awareness, coupled with simple, intuitive and secure payment system to be created. Only then, India could become a cashless (or less cash) digital society.

(The writer is Adviser, Centre for Educational and Social Studies, Bengaluru)

For all the wrong reasons

Reliance Jio effect ensured other telcos get busy wooing subsidies, but focus is wrong
The much hyped October 2016 auction has ended in a flash with the government making only a fraction of the anticipated Rs 5 lakh crore.

By: G Krishna Kumar | New Delhi | Published: October 13, 2016 6:10 AM

The much hyped October 2016 auction has ended in a flash with the government making only a fraction of the anticipated Rs 5 lakh crore. Sixty five per cent of the spectrum was unsold, and the efficient 700Mhz spectrum did not find takers. Was it steep base price or prudent bidding (unlike the usual recklessness seen in the previous bidding)?

While we digest the outcome of this flash auction, the Reliance Jio effect has ensured all the telecom operators (telcos), including the state-owned BSNL, are busy wooing subscribers. Let’s hope this would shake-up the telecom sector and enable delighted subscribers, but there are challenges galore. The government, telcos and the regulator must work together in improving the overall quality of experience.

The next telecom wave in India is undoubtedly data. India already has 350 million internet users and this is expected to double to over 730 million internet users by 2020, as per a recent National Association of Software & Services Companies (Nasscom) report. More important, 75% of new user growth is expected to come from rural areas.

Back to basics—Call drops

While India’s rapid rise in voice and data penetration is appreciated, it is unfortunate that the telecom sector is not focusing on fixing the vexing call drop issue. Despite all the effort from the government, media and public, there is hardly any change in the ground situation. While the telcos claim to have added thousands of towers to reduce call drops, the fact remains that the call drop menace just continues.

The Supreme Court had struck down the telecom regulator Trai’s proposal asking telcos to compensate for call drops. The relationship between Trai and telcos, also seems to have hit a low. Notwithstanding this, the government must ask the telcos to improve the call drop issue urgently. Trai should seek direct feedback from the subscribers and not just depend on the test reports on call drops.

Regulatory levies

It is to be noted that the regulatory levies in India are three or four times higher compared to China and other countries. Recently, the government decided to retain the weighted average formula for computing spectrum usage charges (SUC) as against a simple flat rate. The complicated weighted average formula takes into account the frequency band, when the spectrum was acquired, among other parameters. While the government imposed a flat 3% SUC for the recently concluded auctions, it should go for the flat rate for all the spectrum soon.

The tussle between Trai and the telcos about IUC (interconnect usage charge) meanwhile continues. IUC is the charge levied by telcos for calls terminating in their network. For example, for a call made by someone from Network A (called calling party) to someone on network B, an IUC of 14 paisa per minute is charged by A to B. Since we follow a calling party pays model, this charge is passed onto the subscriber initiating the call. The IUC was reduced by 30% from 20 paisa to 14 paisa in March 2015. The recent consultation paper from Trai suggests that the IUC be abolished. Obviously, the big telcos are upset as they are set to lose a few thousand crores with this move.

The smaller telcos, especially the latest entrant Reliance Jio will be the beneficiaries, if Trai suggestions are implemented. Considering that we have eight operators (down from 10-12 due to spectrum sharing/trading pacts amongst the operators) in each circle and India still being a large voice driven market, a staggered reduction in IUC could be considered.

Zero IUC or Bill and Keep (BAK) model allows for calls to be terminated at no-charge. Basically, the operator recovers their costs from their own customers instead of charging other operators. The BAK model is followed by the landline service providers in India.

This means, no termination charges are levied for calls made from landline to another landline or mobile network. To encourage landline phone use, BSNL allows free calls to any network in India on Sundays.

Tariff war 2.0

Globally, telcos allow internet telephony or Voice over IP (VoIP), but Indian telcos don’t support it. Why? Telcos earn 5-6 times more using a traditional call as compared to VoIP calls. No wonder telcos get jittery about zero-IUC. Trai’s proposal of a zero-IUC is intended to encourage telcos to provide VoIP services.

Reliance Jio’s Voice over LTE services, completely an IP driven network is sure to disrupt the market. Jio’s aggressive growth will be a challenge till the Interconnect issue is sorted.

The anxiety amongst incumbent telcos to counter Jio has resulted in tariff war 2.0 for data, with many of them reducing tariff by over 50% to retain subscribers. This reminds us of the tariff war 1.0 or call tariff paisafication started during 2003, when voice call rates were drastically reduced (again thanks to Reliance). But then the quality deteriorated over a period of time.

Undoubtedly, the tariff war 2.0 is good news for the subscribers. Instead of only trying to provide cheapest data tariff with average quality, the telcos must compete on excellence in quality of service for data, India specific content and superior user experience. All these without compromising on net-neutrality.

Again direct subscriber feedback on quality and ensuring the telcos offer acceptable data-rate over a specified period of time are much needed.

For India’s dream of a digital society to be a reality, the government, regulator Trai and the telcos need to work cohesively for ensuring superior subscriber experience.

The author is ICT professional. Views are personal

Internet addiction’s a public health issue

G KRISHNA KUMAR

Hindu Business Line 16th july 2016, Page 8, EDITORIAL PAGE

Japan and Korea are grappling with net-induced intellectual and emotional disorders. Why fall into that trap?

The telecom and IT minister recently announced that India will soon have half-a-billion internet users. That’s an unprecedented achievement considering India’s struggle to add internet users just 5-8 years ago.

As a result of easy access to WiFi, intuitive user-experience through touch screens, and availability of affordable mobile and tablet devices, internet usage is poised for a dramatic rise in the coming years. Although India’s mobile data consumption is just one-tenth of that in the US and other advanced countries, we are witnessing challenges due to the overuse of internet, especially among youth and children.

Sheer overuse

Studies have revealed that constant internet use results in reduced creativity, reduced ability to remember, and significantly hurts long-term memory. Another study shows that internet users get increasingly impatient. The psychological impact due to constant use of internet and mobile phones has been researched for many years. The anxiety among those who use their phones for email and social networking activities is known. For instance, ‘always connected’ people are nervous when the battery runs low.

Not surprisingly, ‘online anytime’ people get stressed in a no-internet zone. Of late, we have begun to accept mobile phones/tablets and other gadgets as replacements for kids’ toys. Indeed, parents often boast of their kids’ ability to use smartphones with ease.

According to a study, the addiction problem in India is real and at least 24.6 per cent of adolescents have problematic internet use or internet addiction disorder (IAD). A report by the Indian Council for Medical Research says that 12 per cent of individuals using internet in the country suffer from this problem.

The problem’s growing

Internet addiction is a growing problem world over. Japan, known for its early adoption of technology, was among the first to recognise the challenge of IAD. It is estimated that over 5 lakh children in the 12 to 18 years age-group are victims of screen addiction. High school students spend over six hours during weekdays and, in many cases, skip school to be online.

Japan’s education ministry has started internet fasting camps where the affected children are asked to spend time on physical activities. The intention is to help them get away from the online/virtual world and encourage them to have real communication with other children and adults — basically, teaching them the importance of human relationships. The Japanese government claims that the fasting camps have been successful because they motivated children to spend much less time online.

South Korea, another technologically advanced country, considers internet addiction a public health crisis. ‘I Will’ centres have been set up in Seoul. These are intervention institutions for internet and smartphone addicts among children and youth below the age of 24. They are provided counselling, preventive education, and alternative activities.

India’s premier mental health institute, the National Institute of Mental Health and Neurosciences (NIMHANS) has set up an internet de-addiction centre for healthy use of technology. A similar centre has been set up in a few cities. But considering that millions of Indians are either already or likely to be affected with IAD, shouldn’t there be many more such centres across the country?

Government help

India has the youngest population in the world but the demographic dividend we are so proud of could soon vanish if we don’t inculcate the right habits among gen next. India’s culture which revolves around strong family bonding is expected to address the issue. Yes, it can, but with low awareness of the IAD issue, we need multiple initiatives. Today, most of us do not accept that the problem is real.

India needs a strong framework for tackling IAD. This is a good opportunity for the telecom, human resources, health and AYUSH ministries to join hands and come up with suitable actions before the problem becomes an enormous issue. The ministry of health and family welfare should consider creating a pan-India initiative similar to the National Addictions Management Service (NAMS) created by the Singapore government. Under NAMS all types of addictions are brought under a single umbrella.

We need a multi-pronged awareness campaign directed at different age groups. The Government should embark on an awareness drive aimed at educating the public on the main symptoms of internet addiction. The AYUSH ministry could consider providing intervention programmes for people who are already found to be addicted to the internet.

The HRD ministry should consider mandatory training for school and college staff, who in turn can educate students on responsible use of the internet. The main focus should be on improving children’s cognitive skills and thereby nurturing creativity. Schools can play a supportive role by educating parents about symptoms and possible actions.

Can the telecom ministry ask internet providers to run regular campaigns educating people about internet addiction?

In an increasingly connected world, we cannot shy away from the internet. However, we need a strong framework in the country to educate the public on the symptoms of screen addiction and provide intervention mechanisms. We don’t want IAD / screen addiction to spoil our demographic dividend.

The writer is an adviser to the Centre for Educational and Social Studies, Bengaluru. The views are personal

(This article was published on July 15, 2016)

Airtel dials 'self-regulation' to address call drop issue

PRAVEENA SHARMA | Fri, 13 May 2016-08:30am , New Delhi , dna

A day after winning the legal battle against Telecom Regulatory Authority of India (Trai) in the call drop compensation case, India's largest telecom operator Bharti Airtel has rolled up its sleeves to get its act together to spruce up its quality of service (QoS).

The Gurgaon-based telecom service provider claimed it has imposed on itself 25% more stringent call drop benchmark of 1.5% than telecom regulator's prescribed 2%.

Gopal Vittal, managing director and CEO (India & South Asia), Bharti Airtel, said the self-regulatory move emphasised the telecom company's commitment to improve its QoS.

"This self-regulation on quality of service further underlines our commitment to our customers despite the challenges of limited spectrum availability and acquisition of sites in urban areas," he said in a statement issued by the telco.

The telecom service provider's move comes after a huge debate over the rising call drop menace and its resolution, which led to the telecom regulator imposing a penalty of telcos in the form compensation of Rs 1 for every call drop, with a limit of three call drops per day. The penalty was to begin from January 1.

Telecom players fiercely opposed it and approached the Delhi High Court, which delivered a verdict against it. They raised the issue in the Supreme Court, which has ruled in their favour and struck down Trai's punitive compensation for call drops, terming it as "arbitrary and unreasonable".

Commenting on the SC's judgement on Wednesday, Mahesh Uppal, director at telecom consultancy firm ComFirst (India), said that Trai had "exceeded its brief and short-circuited the process" by trying to penalise the telcos for call drops.

"I think, Trai's heart was in the right place but clearly it had exceeded its brief and short-circuited the process. I'm hoping that this (SC's order) will persuade Trai to do what regulators elsewhere (in the world) do to deal with quality of service, which is to put information (on QoS) in the public domain. This will help users find out which operators offers good service and choose the most appropriate one. This is how market regulation works and this is how it should have worked here (India)," he said.

Uppal said the sector regulator had taken "a very whimsical approach"; "it was a very whimsical approach and virtually unenforceable. So, it is good that this method of dealing with the problem (of rising call drop) is going to be abandoned and a more market-based method will have to be resorted to".

Rajan S Mathews, director general of industry lobby body Cellular Operators Association of India (COAI) said with the apex court striking down Trai's way of addressing the call drop issue, it was time to move "forward, along with the Department of Telecom (DoT) and Trai, to address key issues like affordable spectrum, state permission for cell towers and right of way (RoW)".

"These are the things that create the call drop and so if you address them, we are sure to address the issue of call drops for the customers," he told dna.

G Krishna Kumar, Bengaluru-based telecom executive, believes some penalty would have been "desirable".

However, he feels, the public uproar over the past 6-8 months on the call drop issue has ensured that telcos will not ignore the issue.

"The compensation for call drop was only to be seen as a deterrent for ensuring the telcos provided the right quality of service," said Krishna Kumar.

He said Malaysia has effectively implemented call drop compensation and achieved 30% reduction in call drops over three months.

"It will be sad if the telcos don't continue to invest and improve the infrastructure and strive to meet the prescribed call drop norms. We need impartial and accurate information on call drops and other quality parameters to be published on a weekly basis," said the Bengaluru-based telecom analyst.

Most telcos have announced huge investment for network expansion. Airtel, under its Project Leap, would be spending Rs 60,000 crore over the next three years to improve its mobile network.

GDP growth calls for holistic traffic management

By G Krishna Kumar, Apr 29, 2016, DHNS

The odd-even rule is back in Delhi till the end of April and could well be a regular fortnightly feature going forward. Is odd-even the only solution to overcome the traffic mess in our cities? Traffic congestion will be a huge issue considering that India is poised for superlative GDP growth. Why? It is established that GDP growth correlates which car sales.

Before we jump into possible solutions, let us look at some data points on passenger car sales and GDP growth in India and other leading economies. India’s passenger car sales increased by about 10% to 2 million units in 2015 compared to about 1.85 million in 2014. China is the leader in the world with over 20 million cars sold in 2015, while 17.5 million cars were sold in the US.

Interestingly, until 1990, India’s per capita GDP and car sales were higher than China. However, by 2005, China had about 2.4 times India’s per capita GDP and sold 3 million cars, about 2.2 times India’s car sales. In 2011, China overtook the US to emerge as the number one market in car sales. India has less than 20 cars per 1,000 people, while china has over 50. The US, Japan and the UK have 500 to 750 cars.  

Notwithstanding the recent turmoil in the Chinese economy, over 25 million cars are projected to be sold in 2020. Thanks to India’s growth momentum, over 4 million units are expected to be sold in 2020. Increased affordability and aspiration for bigger and better cars (in terms of advanced infotainment features) can be attributed for significant addition of new cars.

Thousands of cars are added every week in our cities. In Bengaluru for example, 9,688 cars (including 2,089 taxis) were added on an average every month over the past 6 months. Another 25,000 new two wheelers are added every month and not surprisingly we experience all-day rush hour! The situation is similar in the other cities. 

Congested roads mean significant stress on drivers and drastic productivity and economic loss. In fact, a study indicates that India loses over Rs 60,000 crore due to traffic congestion on our roads. Cars contribute to just 13% of the vehicles on our roads. We need a holistic approach from the government, car manufacturers and the general public to improve the situation.

Improving road infrastructure by widening roads or adding flyovers seem the most obvious solution. But, a study indicates that traffic will consume 90% of the additional capacity within 5 years. The government’s increased spend on smart cities can offer solution through integrated traffic management using sensors. Studies reveal that car drivers looking for parking space is the main reason for traffic pile-up. Perhaps an efficient smart car parking system needs to be developed which will provide timely parking availability information to the drivers on their mobile phones.

Congestion charge, which is imposed while driving during peak hours or in the central part of the cities, is being effectively used in London. But again, this will not work in our cities until we have efficient public transport system in place with park-and-ride or incentive parking facilities. Exactly for the same reason, odd-even formula may not work. China’s Shanghai city introduced auction of private car licences (number plate). Essentially, a fixed number of cars are allowed to be registered in a month. People trying to circumvent the system by registering cars in smaller towns are not allowed on the major roads of Shanghai during peak hours.

Although highways in India have improved over the past decade, several of them are crowded like any other city road. Just shows lack of foresight from the planners.  We will need top quality highways and expressway network similar to the one in the US or China. While China and the US have 1.2 lakh and 75,000 km of expressway, respectively, we are way behind at just over 1,300 km.

On-time completion

The government plans to add another 18,000 km of expressway by 2022. Let us hope for on-time completion, unlike the golden quadrilateral project which took 13 years for completing the 5,700 km highway. Eventually, the government’s short/long term vision and ability to deliver infrastructure projects on-time will remain the key.
Newer technologies like the vehicle-to-vehicle communication allow cars to communicate with other cars and with roadside objects, to help in reducing traffic congestion.  Car manufacturers along with the government could work closely in piloting such initiatives. 

Driving licence is the first step towards responsible driving, but then, it is really easy to obtain a licence by using bizarre methods.  Should we blame the government or public or both? A recent newspaper report indicates that the failure rate in driving tests in India is just 3-7%. An experiment conducted in Pune where applicants were made to drive on special tracks monitored through CCTV cameras revealed that the failure rate shot up to 40%. The systemic issue needs to be addressed urgently.

Technology in the car can be used to determine driving habits and thereby annual insurance premium can be linked to the same. Basically, responsible drivers pay less compared to the reckless ones.

We need to sensitise the drivers to be responsible. May be car makers could use part of the mandatory corporate social responsibility spend for sensitising public on responsible driving. 

The car makers could also tie up with not-for-profit organisations to spread safe driving. We should get students in colleges to undergo rigorous training, and through such an effort, we could see a large number of mature drivers on our roads in the coming years.  

(The writer is Adviser, Centre for Educational and Social Studies, Bengaluru)

Giving BSNL a new lease of life

G KRISHNA KUMAR

V SRIDHAR

Divestment can pave the way for a more agile management, that can put the infrastructure to optimum use.

Bharat Sanchar Nigam Limited (BSNL) has been in the news recently for reporting an operational profit of about ₹672 crore in 2014-15 after continuous losses for the previous years. But the company is still hugely loss-making, and the CMD expects it to turn profitable by 2018.

Sliding performance

Recent announcements indicate that both BSNL and MTNL lag behind the private telcos in revenue growth. The market share of BSNL/MTNL in mobile is 8.5 per cent which declined from 14 per cent in 2008. Included in the list of Navratna public sector units in 1997, the sister firm MTNL (the operating company in Delhi and Mumbai) is on the verge of losing its coveted status, having accumulated losses at the rate of more than ₹1,000 crore per year.

The share price of MTNL has declined by 95 per cent since its heydays of ₹390 in March 2000. Though the issue of merging BSNL and MTNL to form a single company with pan-India assets and subscriber base has surfaced time and again, successive governments have put it on the backburner. While the divestment talks have not yet touched upon BSNL yet, it is time for the government to think along these lines. Here are the reasons why.

The average share of spectrum, the essential resource for providing mobile services, held by BSNL is about 20 per cent in a circle, which is significantly more than that held by most of the private telcos. The number of cell sites and associated Base Transceiver Stations (BTS) of the combine is more than 70,000, comparable to some of the leading telcos.

Unutilised infrastructure

Commanding 75 per cent of the landline user market, BSNL is a near monopoly in wired direct exchange line, especially in rural areas.

However, with all these assets, why are government telcos floundering in recent years? The main reasons, as pointed out partially by the minister, include (i) inadequate marketing of their services (ii) slow decision making with respect to purchase of equipment and managing contracts with managed service providers and (iii) inadequate management flexibility in pricing plans, and sharing arrangements, to name a few.

These have also started affecting the quality of service as is evident in the recent Quality of Service report released by TRAI.

The government firms had their own share of sops such as (i) year-ahead early start in the assignment of both 3G and Broadband Wireless Access (BWA) spectrum in 2009 and (ii) reimbursement of about ₹10,000 crore of licence and spectrum charges during 2001-06, as part of commitment to BSNL corporatisation. However, the 6.2 MHz spectrum in the much valuable 900 MHz band held by BSNL/MTNL is coming to the end of its life in 2017 and it may have to be renewed pan India at the market value (if government does not provide sops once again!).

Despite the early release of spectrum, due to sloppy decisions in technology and service procurement, the BWA spectrum assigned to BSNL/MTNL in 2500 MHz band remains under and even unused in most of the circles, and has already been returned in about eight circles. The minister has also indicated that the spectrum in rest of the circles may also be surrendered soon.

Given the intensity of competition in the telecom sector, it is time that the government formulates a strategy for reviving the lagging telcos.

Globally, with the exception of China, most countries have reacted to the realities of the telecom market and acted accordingly — the notable examples being Telstra of Australia and British Telecom of the UK. In both these cases, government control was drastically reduced; they are listed in the stock exchange; with improved and agile management structure and accountability to shareholders, the companies have performed remarkably well, despite competition. The reasons for an overhaul are persuasive.

Revamp and divest

First, is the effective use of infrastructure and spectrum that BSNL/MTNL have. Despite 18.26 million fixed line subscribers with BSNL/MTNL, the number of fixed line broadband subscribers is just about 60 per cent, indicating that rest of the infrastructure is grossly under-utilised. A possible way to monetise these wired local loop assets it to accelerate unbundling it to ISPs or other telcos which TRAI included in its recommendations on Broadband last year.

Now that both active and passive infrastructure sharing is allowed along with spectrum sharing the firms should consider improving utilisation of its assets and to monetise the same using appropriate business models.

BSNL has wealth of infrastructure and network especially in the semi-urban and rural areas. It is time that BSNL adopts ‘collaborate and compete’ philosophy by sharing the infrastructure with private players and monetising the same.

Second, thanks to its preferential status, it stands to gain in phase II implementation of BharatNet. Most of the States have started developing plans for this phase; it is only appropriate that BSNL takes a lead in being part of the project as (i) contractor for laying the optic fibre to selected Gram Panchayats or (ii) provider of broadband access services or both.

Third, the government’s Digital India agenda cannot be sustained unless there is a robust broadband infrastructure and associated content available across the length and breadth of the country. BSNL/MTNL combine has the requisite infrastructure to implement the same.

For example, Telstra achieved providing their 4G network coverage to over 94 per cent of the Australian population. Telstra launched MyCareManager in April 2015, an integrated eHealth product designed to help disability, community and residential aged care providers deliver innovative services and information from a distance.

Public projects in the areas of governance, health, and education require digital infrastructure and BSNL/MTNL should take active part in building infrastructure and content for the same.

Fourth, competitors of BSNL are way ahead in vendor management practices, incorporating fully outsourced models and technology de-risking. BSNL should implement best practices in the industry for vendor management to survive in the marketplace.

However, to achieve all the above, government should lend a free hand to flexible decision making, incorporate a professional management team, inculcate customer centricity in the organisation and make it super agile. All of these are possible, only if government steps aside by divesting and making over BSNL/MTNL to a professional, responsive, and responsible organisation. This will be a great relief for the tax paying public!

Kumar is an ICT professional; Sridhar is a Professor at IIIT-B. The views are personal

(This article was published on March 20, 2016)

Here's how much subsidy Freedom 251 would need to fulfill 6 crore phone orders

PRAVEENA SHARMA | Tue, 23 Feb 2016-09:10am , New Delhi , dna

Even if we were to put aside all other doubts about Freedom 251, priced at Rs 251 by Ringing Bells, Pankaj Mohindroo, president of Indian Cellular Association (ICA), says it would be impossible for it to fund the subsidisation of the smartphone.

The recently launched Freedom 251 has taken the Indian market by storm with its unbelievable, and as many claim commercially unviable, pricing.

Mohindroo, who has asked the telecom ministry to look into the venture's tall claims, told dna it was a "serious matter" and that just the cost of subsidising the seven crore orders received in three days by the company would be more than daunting.

Even G Krishna Kumar, a Bangalore-based telecom analyst, said Ringing Bells would have to rely heavily on cross-subsidisation model to meet its promise on pricing, with the "bill of material" for a decent quality mobile phone in India currently being upwards of Rs 2,000 per unit.

"The bill of material of a decent quality phone will be upwards of Rs 2,000, that is the bare minimum cost to make a phone. There will also be overheads irrespective of the channel used for selling the phones (e-commerce or brick and mortar shops). So, if they are selling it at Rs 251, someone is subsidising the phone," he said.

After the overwhelming response that the company received for its product, it has stopped taking any more bookings.

dna was unable to reach the company officials on Monday, but according to reports in the media one of the promoters of Ringing Bells Mohit Goel assured all orders would be met on time.

Krishna Kumar observed that the orders that the handset company had received was more than 50% of the current smartphone market. According to the market research and analysis firm International Data Corporation (IDC), India's smartphone market was 103 million in 2015. The three-day order of Ringing Bells of around 70 million comes to about 70% of this.

"Rs 251-phone, if indeed can be realised with acceptable quality, can hugely disrupt the Indian smartphone market. India is among the fastest growing market for smartphones with about 2.5 crore smartphones sold every quarter in the country. That's about 100 million phones in a year," he said.

However, he said India had moved beyond the "cheapest only sells" market. "Just 10 years back before the Indian mobile phone makers entered the market, ultra-cheap Chinese phones were popular, but then they soon lost the market due to poor quality," said the telecom expert.

Imagining life in a Connected India by 2050

G KRISHNA KUMAR | Fri, 5 Feb 2016-06:30am , dna

In terms of preventive healthcare, advancements in wearables would mean real time measurement of body vitals like heartrate, cholesterol levels, blood sugar etc would be possible and predictive systems can anticipate health issues.

By 2050 India is expected to develop into world's number one economy and the most populous country wiyh 50% people expected to live in urban areas.

Such hyper growth would bring many challenges but also opportunities to leverage new technologies and innovations. Let us explore some of the new technologies that could shape our country.

We are sure to go beyond odd-even formula with smart traffic management and reliable/efficient public transportation. Connected technologies like the vehicle to vehicle communication will fully mature within the next 20 years. This means, accidents can be largely avoided as cars will alert the drivers by communicating with other cars and roadside objects.

Another example is when a drunk driver gets into the car. The car would just refuse to start! It calls the nearest rent-a-driver or even better, the car enters into an autonomous or self-drive mode and perhaps even stops at a chemist to pick up some headache tablets that it has pre-ordered.

In case of an accident/crash, the nearest ambulance is alerted, traffic lights altered for clear path to the site of the accident, injuries are pre diagnosed, right specialists are called to the hospital and even the operation theatre is booked. This will dramatically increase the number of lives saved.

In terms of preventive healthcare, advancements in wearables would mean real time measurement of body vitals like heartrate, cholesterol levels, blood sugar etc would be possible and predictive systems can anticipate health issues.

Fully connected intelligent homes will be a norm. But, won't it be amazing if you have a helping hand in the form of humanoid robots? Affordable and easy to maintain robots supporting us with daily chores, be it cleaning the house or preparing a cup of coffee would delight us.

Advanced streaming and virtual reality technologies can bring real life-like effect, experiencing stadium-like feel watching soccer match or a live concert just sitting at home.

Education sector would transform through the creation of highly knowledgeable skilled workforce. In fact, connected classrooms could obliterate the need for visas.

Let us now look at some key factors that can make the above sample cases a reality. Over the next 3-4 decades, we will see affordable and super high speed data rates giving "live experiences" for the citizens all the time.

We will see significant progress in the fields of machine learning, voice recognition and artificial intelligence, there will be a complete new paradigm with which people will interface with devices, gesture and voice support ( in local languages) will replace keyboard to a large extent. This means the digital divide between urban and rural populations will be eroded and access to technology will be simplified.

Energy efficiencies will see significant improvement over the next decades resulting in cars, mobiles, homes and even offices consuming significantly less power. We should not witness any power outages. We will also have close to unlimited data storage and instant access to data through the high speed data connections.

With a highly interconnected world, there could be challenges of too much info about an individual's likes and there could be security challenges. But then, the highly connected world will ensure basic human desires be it communication, search, shopping, entertainment, sports and travel to be much better.

Our journey is poised to be exciting over the next three decades as India gets connected and the citizens are sure to witness a safe, healthy, active and enjoyable life.

The writer is information and communication technology professional

Government will have to cut 700 MHz base price, say experts

PRAVEENA SHARMA | Wed, 3 Feb 2016-08:15am , New Delhi , dna

GSMA terms the telecom watchdog's valuation of the spectrum band as "unrealistic"; one expert says it could be slashed by as much as 20-25%

After the outcry of the Indian lobby body Cellular Operators Association of India (COAI) on the exorbitant pricing of spectrum in the 700 megahertz (MHz) frequency band, international mobile operators' representative organisation GSM Association (GSMA) also on Tuesday termed it "unrealistic" and telecom experts said the government had "no choice but to cut the price".

Hemant Joshi, partner, Deloitte Haskins & Sells LLP, told dna the government would have to come out with a "fair and workable price".

The government has no choice but to cut the base price, which is unrealistic and not reflective of National Telecom Policy 2012 (NTP 2012) and Digital India objectives. They should come out with a fair and workable price and time it (the spectrum auction) in a way that everybody (telecom operators) can participate in the auction, or else a few of them (operators) will corner the spectrum (in the efficient 700 MHz band)."

The NTP 2012 and Digital India programme aims to provide connectivity to all in affordable, secure and reliable manner. Last week, the Telecom Regulatory Authority of India (Trai) came out with its recommendations on spectrum pricing for the forthcoming auction, where it has valued the airwaves in 700 MHz band at a base price of Rs 11,500 crore per MHz.

G Krishna Kumar, Bengaluru-based telecom professional, believes the sector regulator had intentionally set the price high so that it had the margin to further negotiate the price.

"As in the past, the Trai proposes a high base price for the auction, and after the uproar from the telecom companies (telcos), reduces it. Eventually, the reserve price could be reduced by 20-25%," he said.

Krishna Kumar said globally 700 MHz-based data services are being pursued mainly by countries that have matured data subscribers like the US, Germany, Japan or Australia.

According to him, leading service providers like T Mobile and Telstra are aggressively using this spectrum to bolster their data services.

"The benefits of 700 MHz spectrum, also called as the digital dividend spectrum, are very high, offering 3-4 times coverage area. They can be very useful for the rural areas," said the telecom expert.

He sees a challenge in the mass adoption of this spectrum band because currently there are only a few high-end phones supporting 700 MHz.

Deloitte Haskins and Sells's Joshi believes the four times multiple valuation of the 700 MHz band spectrum, based on the discovered price of 1800 MHz in the last auction, did not make sense at a time when the balance-sheets of most telcos were stretched and realisations from voice and data services dipping.

Happy Mobile Subscribers Key to Digital India

By G Krishna Kumar

Published: 13th January 2016 06:00 AM

Last Updated: 13th January 2016 01:52 PM

 

India has 100 crore mobile phone subscribers, indeed a significant achievement considering we had less than 10 crore subscribers in 2005. Such hyper growth was possible thanks to the competitive mobile service offered by the telcos and availability of affordable phones. But then, quality of service provided by telcos has been the challenge.

Indian subscribers’ patience was tested during the past 12 months due to the incessant call drop menace. The national movement started by the television news channels, nicely followed-up by the public, ensured that the government started monitoring the call drop issue closely. 

The management adage “What gets monitored, gets done” is perhaps apt in the current context as the Telecom Minister Ravi Shankar Prasad is relentlessly tracking the call drop issue.

The Telecom Minister has rightly stated that the responsibility of providing good service to the subscribers lies with the telecom operators. The government’s decision to impose a penalty from January has certainly triggered some action from the telcos. Over 29,000 towers have been added by the telecom operators across the country over the past few months. We are certainly experiencing an incremental improvement in the dropped calls.

It is quite intriguing that the telcos did not act proactively in fixing the vexing issue earlier. Also, why did neither the government nor the telecom regulator, TRAI, monitor the call drop issue with the same intensity in the past?

Call dropping is not unique to India. Malaysia handled this issue using penalties as a deterrent. Malaysia’s telecom regulator Malaysian Communications and Multimedia Commission (MCMC) imposed a penalty of $370,000 (about Rs 2.5 crore based on the current exchange rate) on the telcos. The impact was immediate — in the very next quarter call drops were down by over 30 per cent.    

Due to the potential financial burden, the Indian telcos have sought quashing of TRAI’s ruling mandating the telcos to pay subscribers Rs 1 per call drop (capped at three per day). TRAI has blamed the lack of investment in infrastructure from the telcos for call drops. TRAI has also argued that the decision to impose a penalty has been taken in public interest. 

The Delhi High Court verdict is expected soon, but some form of penalty for poor service is needed as it will act as a deterrent. Interestingly, Telenor, a service provider in India with presence in a few states is offering a compensatory call for every dropped call through its “call katega, muft call milega” initiative.

While 100 per cent call drop-free coverage across the country is practically impossible and not required as per TRAI regulation, equally hard is to comprehend that people will “create” call drops on purpose by getting into an escalator or some area with low network coverage.

The telcos have stepped up investment plans, with Airtel planning to spend Rs 60,000 crore through the “project leap”. It has also announced the launch of a website to show live status of network coverage and site expansion. The recent announcement of Idea Cellular buying spectrum from Videocon has set the ball rolling in terms of spectrum trading.

While all the actions from the government and the telcos must be lauded in getting the call drop issue addressed, India has a fundamental issue, with too many players providing mobile service.

The spectrum is a scarce resource and due to highly fragmented mobile telecom market, Indian telcos own just 1/5th of the spectrum compared to their peers in other countries. India has an average of 10-12 telcos offering mobile telephony compared to just three in China, while the global average is four or five.

In terms of network infrastructure, a recent report states that China invested $50 billion in its networks during the past year, while India’s spend was $5 billion.

Another report states that a telco in a metro city like Delhi carries 49 hours of voice traffic every day per mega hertz of spectrum per tower. This is at least five to eight times more compared to Shanghai or Singapore.

The problem gets aggravated when we look at the way mobile phone users are consuming data in the country, as data requires far more spectrum compared to voice. Data relates to everything from Internet browsing, accessing social networking sites to downloading audio and video files.

As per the International Telecommunications Union report, India has only 20 per cent individuals using Internet compared to over 50 per cent in other BRICS (Brazil, Russia, India China and South Africa) countries. However, this is fast changing as the data usage has gone up by 50 per cent in the past year and is poised for faster uptake.

This means the government needs to free-up additional spectrum, and also water down the stringent merger and acquisition guidelines. 

If the poor data connection issue persists, it will not be surprising if we witness a call drop-like uproar this year. Public Wifi can be a potential solution that the telcos are trying to offload some of the mobile traffic onto the Wifi network. Some state governments have already laid out plans for providing free Wifi and the Indian railways’ plan to provide free wifi at select railway stations through a tie-up with Google would mean good news for the subscribers.

Facebook, trying to aggressively market its free Internet plan through the “free basics” campaign, has already triggered reactions from the proponents of net neutrality. The government’s stand on this will be keenly watched over the year. Net neutrality or not, the average phone user needs good quality connection, unrestricted access to Internet and more importantly at an affordable price. As more people use their mobile phones for Internet, the quality of experience will become critical. 

In this context, TRAI should provide an easy-to-use mobile app to report any issue related to poor quality of experience. Maybe a rating system should be introduced, so that we know the best service provider in a given city or town. TRAI’s performance indicator report gets published with a lag of four to five months, but this has to be reduced significantly for effective action. The Digital India, smart city and e-governance plans will be largely mobile-oriented. Hence, it is all the more important that a good subscriber experience is ensured.

The call drop issue has certainly triggered actions on the ground from both the government and telcos. But, this needs to be sustained to keep the 100 crore subscriber base happy by focusing on quality of experience for both voice and data.

G Krishna Kumar is an ICT professional and columnist based in Bangalore.

Email: krishnak1@outlook.com