5G will transform the telecom landscape, but India will have to wait

 Globally, 5G subscribers were expected to touch 1.3 billion by Dec 2022

G Krishna Kumar, AUG 07 2022, 21:36 ISTUPDATED: AUG 08 2022, 01:17 IST

The much-touted 5G auction has concluded and the Centre is set to garner over 1.5 lakh crore. This auction was estimated to fetch over 4.3 lakh crore, however, just before the auction, the government reduced the expectation to Rs 80,000-90,000 crore. Very high base price meant that 29 per cent of the spectrum remained unsold. As in the past, the government will conduct follow-up auctions for the unsold spectrum; hopefully, at an attractive base price. 

India’s mobile telecom journey has been quite unprecedented. From the first mobile phone call back in July 1995 to the expected 5G launch, we have seen several transformations. From exorbitant call charges to ‘paisafication’ of tariff; from 12 mobile service providers to just 4 and from being a predominantly 2G (voice) market to becoming among the highest per-capita data consumers, India has come a long way. 
The introduction of 5G is expected to further transform India’s digital footprint. Considering that 5G data speeds will be 5 to 10 times faster than 4G, users can expect amazing experiences. But there are several challenges to be addressed. Before we delve into them, a quick look at the global scenario for 5G.

Global 5G uptake
Globally, 5G subscribers were expected to touch 1.3 billion by Dec 2022. However, the revised forecasts indicate that the number could be short by 300 million. This is still a significant achievement considering that it took 12 years for achieving the one billion user milestone for 3G, 4 years for 4G and it would be just about 3.5 years for 5G. If not for the Covid-19 impact, 5G uptake could have been much faster.
A recent report states that 70 countries had 5G networks as of June 2022, up from just 38 just two years back. South Korea was the first country to deploy 5G services back in 2018. By 2025, 60 per cent of South Korea’s mobile subscribers are expected to be using 5G.
5G uptake in the EU has been sluggish. A recent European Telecommunications Network Operators’ Association (ETNO) report states that Europe accounts for only 2.8 per cent of the total mobile connections although 62 per cent of the population has access to 5G. In the US, 13.4 per cent are using 5G. Even Thailand has had a sluggish 5G uptake.
Another report states that the US and China lead on the number of cities with 5G coverage, with 356 and 296 cities, respectively. The Philippines with 98 cities and South Korea with 85 are the countries in Asia among the top 10 countries.   
While 5G involves significant expenditure from the telcos, an Ericsson report states that 5G ARPU (average revenue per user) can gain 34 per cent by 2030 if the telcos offer differentiated services to the consumers.

Poor mobile experience
Indians will lap up 5G connectivity if the telcos retain the tariff. India’s data tariff is amongst the lowest in the world. Price per GB (gigabyte) in India is at $0.17 per GB, while it costs between $3.85-$5.95 in Japan, the US and Canada. No wonder the ARPU of the Indian telcos is under Rs 150. The global average is between Rs 700-Rs 1000. Perhaps, low ARPU is a key reason for the poor quality we experience while using our phones.

Dropped calls continue to haunt the Indian subscribers. Government had planned to penalise telcos with poor call quality, call drops etc. No action was taken and telcos have got away with no accountability for providing poor quality of service.
Many of the challenges we face with connections (especially indoors) would continue even with 5G. The main reason is that the high frequency spectrum, also called millimetre wave (26GHz), is capable of carrying a significant amount of data, but constrained with coverage distance.
On the other hand, the efficiency is much better in the sub-GHz band (600-900MHz). But exorbitant prices meant that the telcos did not bid aggressively in the lower frequency band.    
In India, 4G picked up significantly as people were able to enjoy live-streaming videos, news etc. The speeds are good enough for the current set of applications as 5G specific applications are largely absent. Subscribers may not pay higher tariff for 5G if the quality is largely 4G-like. 
With 5G limited to a few patches, it is highly likely that users will be pushed back to 4G where 5G connectivity is absent (even 2G if 4G coverage is poor). In addition, availability of affordable handsets will be a deterrent for major uptake in 5G. Presently, less than 10 per cent of the smartphones in India support 5G. 
A very strong fibre-optic backhaul network is required for 5G, but only 30 per cent of the mobile towers have fibre-optic connectivity. This needs to be increased to 80 per cent for a seamless 5G experience (Just as an example, South Korea has over 70 per cent fibre-optic coverage).
Sample this: India’s fibre kilometre per-capita is 0.09 compared to 1.35 in Japan and the US and 0.87 in China. Fibre-optic connectivity must be ramped up on a war footing for India to realise its 5G dreams.

Enterprise segment
The Centre’s plan for pricing the spectrum for captive non-public network (CNPN) is awaited. Most enterprises in India will be eager to get on the 5G bandwagon. Also, considering the challenges in 5G deployment for retail mobile users and the fact that enterprises are still major contributors to telcos’ revenue, it is likely that the telcos would prioritise enterprise segment for faster 5G adoption.  
Summarising, for Indians to enjoy a true 5G experience, it will certainly take a few more years. Till that time, we should be happy with occasional 5G and mostly 4G.
(The writer is a columnist and ICT professional based in Bengaluru.)

Great expectations as govt looks to reshape e-commerce landscape with ONDC

ONDC is a not-for-profit, open e-commerce platform that aims to provide a level playing field for all types of sellers

G Krishna Kumar, JUN 05 2022, 22:16 ISTUPDATED: JUN 06 2022, 07:33 IST

Buoyed by the success of several digital initiatives in the country from Aadhaar to Co-Win and UPI transactions, the Union government has embarked on an ambitious project “Open Network for Digital Commerce” (ONDC).

ONDC is a not-for-profit, open e-commerce platform that aims to provide a level playing field for all types of sellers, from kirana stores to retail chains and even larger e-commerce players.

The pilot phase of ONDC was kicked off recently in five cities (Bengaluru, Bhopal, Coimbatore, Delhi-NCR, Shillong) with 150 sellers, and over the next 6 months the footprint is expected to increase to 100 cities across the country with over 3 crore sellers. Reports suggest that there are 1.2 crore kirana stores in the country and just 15,000 of them are e-commerce enabled.

Online retail Gross Merchandise Value (GMV) has tripled over the past 5 years and yet it represents just 4.3% of the total sales in the retail segment. In comparison, e-retail as a percentage of overall retail sales in South Korea, China and the UK are at 26%, 25% and 23%, respectively.

A recent report indicates that the e-commerce market is predicted to increase from an estimated $75 billion by 2022 to $350 billion by 2030. It must also be noted that Amazon and Flipkart account for about 60% of the e-commerce market in India. Can ONDC seize the moment in the retail space?

As of now, large players like Amazon, Paytm etc have created apps/portals where buyers, sellers, logistics and payment are integrated onto their platform. Thus, a customer who is connected to one app or portal (say Paytm) can buy goods from that portal alone. If the buyer wants to buy from any other app (say Amazon), he/she has to log into the app and buy goods. Presently, all the e-commerce players have a centralised approach. ONDC on the other hand has a decentralised network approach. Here, the same Paytm platform can be used by the buyer to search for a product. Instead of seeing just what is offered by Paytm sellers, the buyer can choose from a variety of sellers: it could be from a nearby kirana store or from other established e-commerce players. This gives freedom of choice for the buyers and sellers as well. Most importantly, the buyer can buy goods or services without logging into different e-commerce portals or apps.

The buyers and sellers can transact irrespective of the platform or application they use to be digitally visible. Such a public digital infrastructure enabled by ONDC can potentially disrupt hospitality, travel, food delivery and mobility segments in addition to the retail segment.

The ONDC is based on an open protocol called Beckn, which allows interoperability of a wide variety of buyers and sellers. This effort to standardise all aspects in the entire chain involving various entities for exchange of goods and services is much needed as it would enable seamless experience for all the participants within the ONDC network. The platform is expected to perform the role of an enabler for e-commerce expansion and to be a market- and community-led initiative instead of being a regulator. Most importantly, such an open and decentralised network would certainly spur innovation.

It aims to work on three key aspects: dynamic pricing, inventory management and optimisation of delivery cost, and thereby bring down the cost of doing business for all players, including retailers.

Several technology startup companies have already started working on ONDC. To provide long-term vision and support for the initiative, private sector banks (HDFC, Kotak, ICICI), public sector banks (SBI) and financial institutions like BSE and NSDL among others are jointly owning ONDC. Several news reports indicate that many private banks, tech giant Google and FMCG companies like Dabur, ITC and Unilever are likely to join the ONDC network.

One of the biggest challenges ONDC will face is to replicate or better the existing user experience and quality of service provided by leading e-tailers in the country. As the e-tailers own the end-to-end system, they are able to provide assurance on the quality of products and timely delivery. ONDC would need to include the right checks and balances to create predictability in the decentralised system.

In addition, a strong grievance redressal and dispute resolution mechanism must be in place for earning the trust of buyers and sellers alike. While some of the big e-tailers provide local language support in their portals and apps, ONDC could play a significant role in language localisation, voice- based search and better user experience.

There were several unsuccessful attempts to digitise kirana stores in the past. Lack of success can be attributed to technology that was still evolving as well as low-speed internet, high mobile data tariff and low awareness amongst kirana store owners. Right now, India’s 4G data charges are among the lowest in the world at $0.68 per GB. In addition, availability of cheaper mobile phones will help in onboarding users onto the ONDC ecosystem. Awareness among local sellers, however, holds the key to success. Most importantly, established e-commerce players participating in the ONDC initiative will be a win-win for the overall ecosystem as India tries to catapult into the digital commerce space. Can ONDC replicate the success of UPI, where the banking sector actively participated? It will be a challenge, but with active participation from stakeholders, there is hope. 

(The writer is an ICT professional and a columnist based in Bengaluru)

Burdened telecom sector awaits government intervention

 We had 15 operators back in 1999 and 21 in 2009, and now, it is down to four

G Krishna Kumar, SEP 12 2021, 20:38 ISTUPDATED: SEP 13 2021, 01:33 IST

The recent news of Vodafone Idea Limited’s (VIL) near-bankruptcy situation has sent shockwaves across the telecom sector. VIL accounts for the highest share of rural subscribers in the country. While the overall telecom sector’s financial distress is well known, a significant player like VIL's potential exit is not desirable. Should it exit, the mobile operators' space would become a duopoly with Reliance Jio and Airtel, and the PSU BSNL/MTNL being a fringe player. We had 15 operators back in 1999 and 21 in 2009, and now, it is down to four. Many large global telcos found it challenging to play in the highly competitive Indian market and no wonder, all of them wound up operations during the past decade. So, how many operators would be ideal for India?

 

The Herfindahl-Hirschman Index, or HHI, is often used to measure market concentration and is a metric used to determine market competitiveness. An HHI < 1,500 is a highly competitive market while 1,500 to 2,500 is seen as moderately competitive and greater than 2,500 is a highly concentrated market.
HHI trends in the Indian mobile telephony have always been below 1,500 until 2015. In 2018, the HHI moved to around 2,000 and now it is over 2,800. If VIL exits the Indian market and the subscriber base is shared between Airtel and Reliance, the HHI will be above 4,000. Globally, only China has an HHI of 4,400. China also is unique as all the three mobile operators in the country are controlled by the government. Brazil has about 2,800; USA about 3,000. India would need at least four-five players with relatively similar market shares for a competitive setup that can spur innovation and help mobile subscribers with a better user experience.
BSNL+VIL: A game-changer?
The VIL has debts close to Rs 1.8 lakh crores with 90% payable to the government. The company is struggling with its operations with an ARPU (average revenue per user) of Rs 107, the lowest when compared with the other two private telcos who have an ARPU of Rs 140. While VIL and Jio have similar spectrum holding, Jio has 60% more users per Mhz spectrum than VIL. Increasing the tariff is not an option for VIL as more subscribers will port out and worsen its operational parameters. As per a TRAI report, VIL has lost 42.8 lakh subscribers in June 2021. To stop predatory pricing by mobile operators, VIL has been persuading the government to establish a floor price and provide a level playing field. Like airline ticket prices, can the government create a price range for telcos as well?
For the sake of Indian subscribers, direct and indirect employment generated by VIL and more importantly, to emphasise India’s commitment to the telecom sector, the government should bail out VIL. Can it acquire a controlling stake in or merge with BSNL? But this needs to be done cautiously by setting clear performance parameters. The deal construct should be directly linked to improving subscriber experience parameters. When successive governments have failed to improve BSNL/MTNL’s fortune for decades, can the government be successful in reviving VIL? There are bound to be challenges including HR aspects. However, a strong governance board with experts should oversee the performance of the entity. Globally, there are several examples of government intervention in the private sector yielding significant success to the overall ecosystem. Can the VIL+BSNL become a game-changer and we have a strong government-run mobile operator like China Mobile?     

Satellites for broadband
While India has created an extremely competitive mobile telecom market, we will need four-five operators for sustaining this competitiveness and innovation for a healthy market. Although the entry barrier is high, we should encourage new local companies or global players to provide services in the country.
The price per GB of data in India at $0.16 is the cheapest in the world and no wonder, the average data usage has increased to over 15GB per month, among the highest in the world. However, over 50 crore Indians are not using mobile data. The government should open satellite communication services for improving data coverage. The ultra wide band (UWB) spectrum in the Ku and Ka bands for satellite communication can provide data rates of over 25Mpbs (although theoretically, much higher data rates are possible). This would provide internet access in the most remote areas.
Several global players like Amazon’s Project Kuiper, OneWeb (backed by Airtel), Starlink from Elon Musk’s SpaceX and Canada’s Telesat are at various stages of offering broadband data globally. The spectrum for UWB cannot be auctioned as these are global frequencies. The Indian government should consider allocating spectrum on an administrative basis, of course with appropriate fees and the right checks. Satcom would help the digitally unconnected Indians to become connected.
The government must fast-track the much-delayed 5G auctions. At the same time, spectrum pricing must be handled carefully and unsold spectrum avoided. The government must improve the fibre optic backbone in the country as this will decide our ability to rapidly move into 5G technology.
The overall debt in the telecom sector means that telcos are unable to upgrade their infrastructure. The government should lower the burden on them by reducing taxes and regulatory levies. Presently, Indian telcos pay over 25% (including GST, licence fees, etc) of their gross revenue as tax, compared to less than 10% in other countries.
News reports indicate that the government is working on a relief package for the telecom sector, triggered by the VIL issue. This could provide a breather for VIL, but from a long-term perspective, we need a multi-pronged approach for strengthening the telecom sector.

(The writer is an ICT professional and columnist based in Bengaluru)

Monitoring digital content

G Krishna Kumar  | Updated on April 13, 2021

 The mechanism must be transparent and unbiased

The government’s Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021 sent shock-waves across the digital and OTT industry. And why not? This is the first time the government has undertaken any initiative towards regulating the hitherto unregulated digital media and OTT (over the top) platforms. It is a fine line between regulation and restriction and hence the government is offering repeated clarification that it is aiming for “soft touch” regulations

India’s Internet usage has been growing rapidly, doubling to over 70 crore users now compared to 2015, and is expected to touch 100 crore users by 2025. During the past three years, subscribers on the digital and OTT platforms have also grown rapidly.

Two-sided marketplace

Digital platforms (like Facebook, YouTube) and OTT players (like Amazon Prime, Netflix) are often called as intermediaries in a two-sided marketplace. In such a market, two sets of players interact through the intermediary or platform. In the case of, say, Netflix, the two sides would be the content creator (movie or documentary producer) on one side and the consumer who watches the content, on the other.

“Network effect” plays a major role in a two-sided marketplace. Essentially, more the number of subscribers on a platform, the better it is for the content providers. The content moderation guidelines need to balance the needs of the general public and the content providers.

Social media companies have, of late, been facing a trust deficit as issues related to data breaches, privacy, provocative posts, fake news, etc., have been reported across several countries. India banning Chinese apps for data breach and the subsequent surge in equivalent ‘Made in India’ apps/platforms is well known. This should serve as a warning to the global tech giants on India’s ability to act in case of non-compliance.

EU regulators are pushing for laws that would hold the intermediary companies directly responsible for dissemination of illegal content on their platforms.

The UK is seeking to hold the intermediary companies responsible for a predefined list of online harms including illegal content and harmful user behaviours. France requires companies to remove illegal content within 24 hours from receiving a notification.

Singapore’s digital content regulation by Infocomm Media Development Authority (IMDA) focusses on community standards while providing more choices for adults and protecting the young. IMDA believes in co-regulation as an effective mechanism.

Recently the Australian government started an inquiry into the role of global technology firms/platforms in spreading false information. Already, global tech firms have responded by launching a voluntary code to prevent spread of false information on their platforms.

India’s plan to trace the source or origin of harmful content is a good step as this will deter mischievous elements from spreading false or harmful content on social media platforms. This will also push the content providers on OTT platforms and OTT companies to abide by the guidelines.

However, considering the size of the digital user base in the country, the government must create the right framework to understand the challenges in implementation. Can anyone raise objection, and how will the system handle if there are thousands of complaints? The online platforms should provide clear information on their operational model and responsibilities.

India’s plan to establish a three-level grievance redress mechanism looks to be a good model. The grievance redress officer needs to acknowledge complaints within 24 hours and resolve them within 15 days. The government has defined a threshold of 50 lakh registered subscribers for an intermediary to be considered as “significant”. Such intermediaries are mandated additional compliance and reporting. Overall, it is still not clear how the whole model will be implemented.

The Information and Broadcasting Ministry will formulate an oversight mechanism. The government having all powers can be tricky, but then it depends on maturity of the overall ecosystem, including the government, in creating an unbiased complaint redress system. While the government is implementing content moderation, issues like consumer/data protection and consumer’s privacy must not be diluted.

Considering the complexities, it would take at least a year for the impact of the present regulations to be visible. With several stakeholders involved in the process, regular audits and reporting will help in strengthening the regulations and bring a practical, unbiased and transparent mechanism in the country.

The writer is an ICT professional and columnist based in Bengaluru. Views are personal

Much ado about banning Chinese apps

IN PERSPECTIVE

G Krishna Kumar,

Jul 15 2020, 23:08 ist | updated: Jul 16 2020, 06:39 ist

Recently, Prime Minister Narendra Modi asked Indian techies and start-ups to come up with innovative mobile applications as part of the Atmanirbhar Bharat Innovation Challenge. This comes in the backdrop of the government banning 59 Chinese apps, including TikTok and Helo, among others. These apps have been extremely popular in the country and have helped thousands of Indian entertainers and artists gather millions of followers and enjoy celebrity status. A moot question for us to ponder over is, with over our four million-strong IT workforce and being the ‘IT capital of the world’, why don’t we have top class Indian apps in our own country and in other countries?

Another question: Is the ban on Chinese apps a precedent? Will we ban Google, Facebook and others, should we have a rough relationship with the US in the future? Banning apps by itself will not solve the larger challenges faced by India’s digital ecosystem. Before we look at the areas for the government to focus on, let us understand the impact of the ban on the Chinese companies.   

With India accounting for 70-90% of their global subscriber base, Chinese companies that provide apps like ShareIt, UCBrowser, Camscanner, Likee and TikTok are sure to be impacted. This will also impact thousands of their employees in India, adding to the unemployment challenges in the country due to the Covid-19 situation. As per the latest reports, the Chinese companies are still hopeful that the Indian government will revoke the ban.

Alternative Apps

Social media is already abuzz with alternative “made in India” apps. The key is for these apps to match the banned apps in terms of user experience. Failing which, end-users will find alternative methods, like using Virtual Private Networks (VPNs) to access the banned apps.

India could learn from countries like Russia and China when it comes to encouraging a world-class app ecosystem. China has banned Google, WhatsApp, Facebook, etc., and the Chinese government supported the local app ecosystem. Baidu, Alibaba and WeChat are popular with over 80% subscribers in the country. Russia also has been successful in developing an app ecosystem that provides best-in-class social networking apps like VK (equivalent of Facebook) and a search engine like Yandex (similar to Google).

The present situation provides a great opportunity for top-class apps from India. Perhaps the government should come up with a 2025 vision of getting at least five of the top 10 apps in the world to be from India? This is certainly not an outrageous thought in a country that can develop Aadhaar and Aarogya Setu, which demonstrate capability to deploy large-scale digital implementations.

Beyond the present app challenge initiative, the government would do well to task the top technology institutions based on the National Institutional Ranking Framework (NIRF) to create world-class apps. As part of the Atmanirbhar Bharat and the VocalForLocal movement, the government should earmark a budget to encourage start-ups.

Internet infra

While a clear indigenous app ecosystem is the need of the hour, there are a few areas that need immediate attention from the government. India’s mobile data rates are pathetic. Sample this: As per the June 2020 Speedtest global index report, India with about 12 Mbps data rate, stands at 129th position amongst 138 countries. It is interesting that countries like Sri Lanka, Pakistan and Nepal fare better than India on this count. While South Korea tops the list with 107 Mbps, China ranks No 3 with 103 Mbps average speed.  

Why is India lagging? It is mainly due to poor internet infrastructure. Mindless bidding during past spectrum auctions meant that many of the telcos soon filed for bankruptcy. If we recollect, just 10 years ago, there were 10-12 operators. Now, we are reduced to a handful. With the government-owned BSNL fast losing its market share, we are at the mercy of the private telcos. The overall debt in the telecom sector means that these telcos are not able to upgrade their infrastructure. The government would do well to reduce the taxes and regulatory levies imposed on the telcos. Presently, Indian telcos pay over 25% (including GST, licence fees, etc) of their gross revenue as tax, compared to less than 10% in other countries.  

Even on fixed line broadband, India fares very poorly compared with the other countries. Broadband has largely remained an urban phenomenon. Our progress in getting rural broadband infrastructure with BharatNet has been pathetic. The target to connect 2.5 lakh gram panchayats has been constantly delayed and is now expected to be completed by 2022. If we had all the villages connected through fibre optic network by now, remote learning for the students in the rural hinterland could have been smooth during the present pandemic.

Since India lacks a strong fibre optic backbone, our ability to rapidly move into 5G technology will be a challenge.

Meanwhile, India needs a clear policy on data privacy and data storage. While the data privacy issues raised over the Aarogya Setu app have subsided, we need strong regulatory oversight and the Personal Data Protection (PDP) law should be passed by Parliament soon. The government should provide a policy on data processing and storage, specifying what data can be processed outside the country, while strictly enforcing compliance. 

Developing alternative apps to counter the banned Chinese apps only solves a part of the overall challenges faced by India’s digital ecosystem. To address the Indian consumers’ increasing digital demands, a strong internet infrastructure and data storage and privacy policies are much needed.

(The writer is an ICT professional and columnist based in Bengaluru)

Some Caveats to Jio-FaceBook deal

Jio-FB deal: Kirana stores to benefit, but the govt must be vigilant

G Krishna Kumar  | Updated on May 05, 2020  Published on May 08, 2020

While the on-boarding of kirana stores onto a digital platform like JioMart will give a fillip to these stores, the government will have to address issues of data privacy and Net neutrality

Amidst the lockdown due to corona, the news of ₹43,574 crore investment from Facebook into Reliance Jio has provided a much needed positive sentiment in the country. The deal means a tie-up between Jio’s e-commerce grocery platform “JioMart” (a platform that would connect consumers with neighbourhood kirana stores) and Facebook’s WhatsApp.

Timing seems right

Jio gets access to WhatsApp’s 40 crore users in India, while Facebook gets access to 38 crore Jio subcribers. It is expected that three crore kirana stores will be onboarded onto the JioMart platform. An opportunity for kirana stores to embrace digital technologies and offer employment. Jio plans to expand JioMart beyond kirana stores and create an ecosystem by bringing in SMEs, farmers, and healthcare workers, among others. Reports already indicate that Jio-FB is aiming for an all-encompassing app like China’s super app WeChat

The internet is already abuzz with the news of JioMart-WhatsApp based service being rolled out as a pilot programme in three suburban areas of Mumbai involving over 1,000 neighbourhood stores.

Will this partnership transform the way we buy daily essentials? Time will tell, but the track record of Reliance in disrupting markets is well known. JioMart is ready to take on incumbent players like Amazon and Flipkart. Reports suggest that online e-commerce is expected to grow seven-fold to $30 billion by 2028.

Will we witness another hyper competitive scenario in the e-commerce space, similar to the one we witnessed when Jio Mobile was launched about three-and-a-half years ago? The government, specifically the Competition Commission of India, will have to actively monitor and ensure predatory pricing is not practised by the new entrant.

The timing for bringing kirana stores onto the JioMart digital platform appears to be right. Several companies have tried to digitise kirana stores in the past. In fact, about 7-8 years ago, a large enterprise software company had tried a similar approach to onboard kirana stores on their digital platform. Lack of success can be attributed to the fact that technology was still evolving, cost of mobile devices, low speed internet, high mobile data tariff and low awareness amongst the kirana store owners.

Things have changed now. A case in point is the wide acceptance of online food delivery platforms like Swiggy with 1.5 lakh restaurants on the digital platform should give confidence to Jio. With the Reliance brand name, much better internet speed and high internet data adoption, coupled with attractive business models would certainly aid JioMart to onboard kirana stores rapidly.

Once a sizeable set of stores are added, JioMart will have access to significant amount of data and by using AI and analytics, the platform can provide insights for providing personalised offers to the consumers. This could also push the neighbourhood kirana stores to come up with innovative methods to woo consumers.

Government must be vigilant

While Jio tries to roll out service across the country, potential concerns on Net-neutrality as Jio and Facebook join hands could emerge. In 2018, India implemented rules for Net neutrality wherein service providers (like Jio in this case) are required to treat all traffic equally, and not charge differently based on content.

The service providers are forbidden from throttling data speeds for any online service, and mandates all content be treated the same. The Telecom Regulatory Authority of India (TRAI) will have its task cut out in monitoring and ensuring Net-neutrality is not being violated.

The other concern can be on protection of personal data considering that India’s Personal Data Protection Bill 2019 (PDP Bill 2019) is still in the works. In fact, a recent article (in The Mint) analyses the privacy policies of Reliance Jio and Facebook and concludes that other than good conscience, nothing can stop the two companies from sharing data as we don’t have a data protection regulator in the country.

In general, a strong regulatory oversight is urgently needed in the Indian context with digitalisation seeing a big uptick across the board. Hope the government will get the PDP law enacted soon.

More competition

Digital payment is another area that is picking up steam in the country. Especially during the current Covid times, digital payments are key to reduce social contact. It is heartening to see several neighbourhood kirana stores refusing to accept cash and preferring digital payments. The National Payments Corporation of India (NPCI) must be enthused with this trend towards digital payments. In fact, a recent report suggests that 42 per cent Indians have increased use of digital payments since the lockdown.

A recent report suggests that the digital payments are poised to increase by five times to reach $1 trillion by 2023. No wonder, foreign companies are keen to play a role in India’s digital payment space. Sample this: Walmart owns Flipkart and digital payments company PhonePe. China’s Alibaba owns over 40 per cent of Paytm. Google Pay and Amazon Pay are also competing in digital payments in India.

The Jio-Facebook deal will provide a tough competition to the incumbent players. Although WhatsApp is trying to obtain approval for rolling out digital payment service, with the deal between the two companies, WhatsApp can lean on Jio’s payment service.

Revival of kirana stores

Back in 2012, when FDI was allowed in the retail segment, it was believed that the neighbourhood kirana stores would vanish soon. While most of them have struggled over the past few years due to demonetisaton and aggressive pricing by retailers and e-tailers alike, it is these kirana stores that have been the lifeline during the Covid lockdown.

A recent report states that 90 per cent of grocery trade in the country happens through kirana stores. This means there is ample scope for many more digital platforms like JioMart and, thereby, create a healthy ecosystem. Making these stores digital should be a win-win for both the consumers as well as the stores, but the government should be vigilant.

The writer is an ICT professional and columnist based in Bengaluru. Views are personal

COVID-19: Need for improved net infrastructure

While remote learning and remote working are a reality now, a big challenge is the speed of internet connectivity across cities and towns
Published: 02nd April 2020 04:00 AM  |   Last Updated: 02nd April 2020 07:19 AM

By G Krishna Kumar

Prime Minister Narendra Modi’s 21-day lockdown notification to ensure social distancing and prevent the spread of the coronavirus has resulted in businesses and educational institutions shutting down. This means employees and students are dependent on the internet to be productive while staying home. With most people connected to the web for entertainment and social networking, the data bandwidth required is huge. Is our internet infrastructure good enough to handle the surge? Before we delve into this, let us understand how people are gearing up for remote working/learning.

While the concept of working from home or home office (a term more popular in Europe) has been around for decades, it has not gained popularity in India, maybe due to lack of trust between the employee and the employer or cultural issues where physical presence is given importance. There are also proven benefits when employees are co-located in an office and it fosters camaraderie amongst the workforce. In sectors like manufacturing, remote working is impossible. But in industries where the physical infrastructure required is a computer and internet connection, remote working can be enabled. It has other positives like reduced traffic and environmental benefits. Perhaps the government should mandate an annual “remote working week”.

Over the past 10 years, the tech landscape has significantly improved for employees to be productive irrespective of their location. There are many software applications for promoting collaborative working. Organisations’ ability to accept and promote remote working calls for a shift in mindset. The present lockdown would test the maturity of organisations and employees alike. In addition, we could witness a shift towards uberisation of the workforce—freelance work as opposed to permanent jobs. Essentially, experts are hired on a need basis for specific tasks, and they mostly work from remote locations. Workforce uberisation is gaining popularity across the world.

In general, firms try to be prepared for emergencies through a business continuity plan . All threats that could disrupt regular business are determined and mock drills conducted to check the plan’s effectiveness. The pandemic has put such plans to test. This is by far the biggest logistical exercise firms have undertaken for enabling employees to work from home. Industry bodies like NASSCOM are actively involved in bringing alignment between industry and government in enabling remote working.

While industries are trying to adapt to the changing situation, universities and educational institutions have started virtual classrooms. The concept of virtual classroom was spearheaded in May 2012 by Massachusetts Institute of Technology and Harvard University with the MOOC (massive open online courses) platform edX, which boasts 2 crore students globally taking over 2,200 courses online. Virtual classrooms are a boon for the educational system in the country, especially during such shutdowns. In fact, this lockdown should provide a trigger for educational institutions to wholeheartedly support virtual classrooms going forward. Maybe some subjects can be taught exclusively online.

While remote learning and remote working are a reality now, the biggest challenge is the speed of internet connectivity across cities and towns. Low/substandard speed internet means a poor experience in downloading/uploading content, and audio/video calls The poor speed can also be attributed to the fact that per household data consumption in cities and towns has increased significantly. Reports suggest video streaming contributes to about 75% of the data consumed on Indian mobile networks. In order to reduce the stress on mobile networks, OTT players like Netflix, Amazon Prime, Hotstar among others have agreed to scale down their video streaming from high definition (HD) to standard definition (SD) on mobile networks during the lockdown period. While SD consumes about 0.7GB data per hour, HD and 4K streaming would consume anywhere between 4 and 10 times more than SD. BSNL’s work@home, a one-month free landline broadband connection, is a good initiative to encourage people to shift from mobile to landline broadband.

Even if we ignore the current surge in data consumption as an aberration and compare India’s internet speed with the rest of the world, the picture is not pretty. A recent speed test report ranks India 128th worldwide for mobile broadband performance and 69th for fixed broadband speeds globally. On mobile broadband ranking, countries like South Korea, UAE and Canada have download speeds between 75-94 Mbps; India is the last amongst BRICS nations with 11Mbps. It is interesting that countries like Sri Lanka, Pakistan and Nepal are ranked higher. In fixed line broadband, downlink speeds in India are about 39 Mbps compared to 203 Mbps in Singapore and 103 Mbps in China.

The current situation should serve as a warning for the government and telecom sector. India could have been better prepared had a rapid fibre optic network been deployed as envisioned in the National Digital Communications Policy 2018. Lack of a strong optical fibre network also puts the superfast 5G network plans in jeopardy. The telecom sector’s financial stress due to mounting debts only adds to the woes of telcos and their inability to upgrade their infrastructure. Governments have not been able to reduce the tax and levies on telcos, among the highest in the world.

The internet has become a lifeline for people to be productive during the lockdown. It is certain that remote working and learning will gain more acceptance going forward. While there is no denial that India’s internet access speeds have improved significantly over the past decade, there is huge scope for improvement. The government and telcos should accelerate actions towards ensuring world-class internet speeds so that people can be highly productive working or learning remotely.

G Krishna Kumar
ICT professional and columnist based in Bengaluru. Views are personal
Email: krishnak1@outlook.com

Ultra-low mobile tariff versus quality

Telcos must move away from the tariff war. The Centre must take a soft approach on taxes and insist on high-quality user experience

Published: 04th November 2019 04:00 AM  |   Last Updated: 04th November 2019 02:03 AM

By G Krishna Kumar

The Supreme Court’s recent judgment upholding the definition of AGR (adjusted gross revenue) and asking telecom firms to pay around `92,000 crore to the government has placed the sector in further financial crisis. The AGR definition has been controversial for about two decades now. As per telcos, AGR should include only the core telecom revenue, while the Department of Telecommunications (DoT) wants all revenues earned by telcos, including interest from bank deposits and foreign exchange gains, asset sale gains, etc. The telcos are appealing to the government to clarify or review the SC judgment.

This SC verdict has come when telcos like Airtel and Vodafone Idea are in a dilemma over Reliance Jio’s move asking its subscribers to pay 6 paise per minute as Interconnect Usage Charges (IUC) for calls made to other network providers. Will all telcos follow suit and is it time to bid goodbye to the ultra-low mobile tariff regime?

The IUC is a charge payable by network provider A, whose subscriber originates the call, to network provider B where the call terminates. An IUC of 6 paise per minute has to be paid by A to B. The telecom regulator TRAI had reduced IUC from 20 paise to 14 paise in March 2015 and further to 6 paise in September 2017. In 2017 TRAI had announced that the IUC would be made zero from January 2020. But it is likely that the IUC may continue for a longer time. In fact, a recent report indicates the government is not able to fix a floor price for mobile tariff and by retaining the IUC at 6 paisa for the next couple of years, the Centre may be indirectly influencing the floor price. It is a clear indication that other telcos would increase their tariff very soon.

Most advanced countries follow zero IUC or Bill and Keep (BAK) mode that allows for calls to be terminated at zero charge. The telcos recover the costs from their own customers instead of charging other operators. Where the voice call traffic amongst telcos is roughly similar, BAK would be appropriate. In India, asymmetricity of voice traffic was prominent five years ago as there were 8-10 telcos per circle and the top 2-3 enjoyed maximum market share. As it stands now, the top three have anywhere between 30-35 crore subscribers, but the asymmetricity continues. TRAI has issued a recent consultation to assess the need to continue the IUC or scrap the same due to the asymmetric voice traffic. Sample this: Jio has 64% outgoing calls to other networks and 35% incoming calls. Airtel has 45% outgoing calls and 54% incoming calls, while Vodafone Idea has 40% outgoing calls and 59% incoming calls.

The challenge in India is the ultra-low tariff that has resulted in an average revenue per user (ARPU) of `74 per month. That is 10 times lower than in most advanced countries. Indian mobile subscribers’ data consumption has gone up significantly over the past two years. The average data consumption is over 9.7 GB now, while it was about 2 GB in 2017. This is among the highest in the world. The average cost to subscriber per GB wireless data has gone down from `17.43 in 2017 to `7.7 in 2019.

The telcos have to constantly update their infrastructure. But in an industry with around `7 lakh crore debt, they are struggling to improve the infrastructure. This has led to extremely poor call quality, constant call drops and inconsistent data connectivity. The overall user experience is pathetic. Most of us have witnessed a drop in the quality of mobile experience in the past few years; this can be directly correlated with the reduced mobile tariff. This artificial low tariff is killing the industry. Many telcos have closed their operations.

For India to benefit from the strong mobile connectivity, high-quality network infrastructure is required. The tariff war that telcos are indulging in must end. The focus must be on providing better quality of experience for subscribers. According to a report, if the top three operators start charging 6 paise IUC to their subscribers, the telecom sector revenue is likely to go up by `15,000 crore. This is welcome money for a sector reeling under severe financial constraints.

The government on its part should take a relook at the regulatory fees imposed on the telcos. The regulatory levies and taxes (license fees, GST, etc.) in India are the highest in the world, with telcos having to pay 25-30% of the gross revenue as tax. A recent news report indicates that the government is working towards reducing the universal service obligation from 5% to 3%. The revenue share license fee is likely to be brought down to 6% of the adjusted gross revenue of the telco. The government has recently set up a panel to suggest steps for providing much desired relief to telcos.

The government action on reducing taxes and providing longer timeframe for deferred payment of spectrum fees will provide respite to the telcos. Along with this, the inevitable increased tariff (quality over cheap tariff) will enable the telcos to improve their infrastructure to meet the ever-growing demand from the mobile subscribers. 

But the government should mandate the telcos to provide the right quality of service. There were discussions on the government imposing penalties for poor quality voice and internet connection. The government should certainly bring some tight controls.  

With Digital India ambitions from the present government still intact and with several services planned to go digital in the country, a robust telecom sector is the need of this hour. Telcos must move away from the tariff war. The government must take a soft approach on taxes and yet insist on high-quality experience for the end users. Quality should win over low tariff.

G Krishna Kumar

ICT professional and columnist based in Bengaluru. Views are personal

Email: krishnak1@outlook.com

Getting BSNL off life support

Hyper competitive environment can be blamed for the woes of this sick PSU. The situation also shows how lack of agility can pull a firm down.
Published: 03rd April 2019 04:00 AM  |   Last Updated: 03rd April 2019 07:43 AM

By G Krishna Kumar

Recently, BSNL, the state-owned telecom PSU, was in the news for
failing to pay salaries to its 1.7 lakh employees for February. The 
Centre’s action to ensure that employees are not affected, at least 
for the immediate future, must assuage the employees.

BSNL, which was a Navaratna company just 10-12 years ago now
has over Rs 90,000 crores of accumulated losses. The new
 government should takesome significant steps to get BSNL back 
on track. The wage bill for BSNL and MTNL (the state-owned telco
 providingservices in Delhi and Mumbai) is about 60 per cent of the 
revenue. 

This was about 20-22 per cent 12 years ago. Over the past several 
years the wage bill increased
 while the revenue has been stagnant or reducing. Meanwhile,
private telcos operate at 9-14 per cent wage bill as a percentage of 
their revenue.

While the hyper competitive environment can be blamed for the woes
of this sick PSU, the situation also shows that poor management and 
lack of agility can pull down any profitable organisation rapidly. A 
recent report shows how
the paltry productivity of BSNL/ MTNL compares with their private
peers. On an average, each employee of the PSU manages about
 500 subscribers,
 while the private telcos manage 20,000 to 28,000 subscribers per 
employee.Interestingly, even China’s state-run mobile operator, 
China Mobile is better
 than BSNL in this parameter. China Mobile has a base of a whopping
 90 crore
 subscribers and its employees handle over four times the subscribers
compared to the BSNL staff.
The merger of BSNL and MTNL has been on the cards for some time,
but successive governments have failed in taking action.

Way back in 2009, the government tried to encourage BSNL by
 providing 3G

spectrum before the auction was held for private players. But BSNL
 could not
 make any impact with the head start. There was no such luck for
 BSNL when
 it came to the 4G spectrum. The lack of 4G offering has put BSNL
 on the
backfoot. After Reliance Jio’s entry, private players are competing to
 provide
better rates for the subscribers. And all this while, BSNL’s services
have been
 limited to just 2G and 3G. This has been a huge disadvantage for the
 PSU.
BSNL and MTNL account for less than 10 per cent of the wireless
subscriber
 base. And BSNL has not been able to match the private players
 when it
comes
 to marketing their services.

Bureaucracy and slow decision making during equipment purchase
and
managing contracts, and inadequate management flexibility in pricing
 plans
and challenges around vendor management contribute to BSNL’s woes.
Added
to all this, BSNL staff are indifferent when it comes to customer retention.

In fact BSNL has tried to implement the FTTH (Fiber to the Home)
connectivity
 through vendors, but it has not been a smooth ride. The back-and-forth
between
 BSNL and the vendors puts the subscribers in a spot. Perhaps, BSNL
needs to
 learn from the private telcos on how to handle managed services from
vendors.

Notwithstanding the shortcomings, BSNL still commands the highest
 market
share in wireline broadband with lakhs of kilometers of optical fiber
cable
across
 the country. It has infrastructure/towers and a talented workforce. This
means
 the PSU can rise again. The government’s actions must go beyond the
tactical
 bailout package which is being worked out.

Perhaps the government should learn from Telstra of Australia and
British
Telecom of the UK. They are great examples where the government
control
was drastically reduced. The companies are listed in the stock exchange
and
have improved and agile management structure. They are now
accountable to shareholders. Despite stiff competition, both the 
companies have performed
 exceedingly well. The Centre should consider a stake sale and bring in
management talent and create a professional board. Accountability
must be enforced.

It is estimated that the land assets owned by BSNL is worth over
Rs 70,000
crore. The government must create the right checks and balances to
monetise
 the amount either by selling the assets or leasing them out. It must
conduct an
 audit of the active infrastructure being used by BSNL and suggest
 means of
improving the unutilised/under utilised assets. The company must
soon find
 ways of offering next gen technologies. News reports suggest that
BSNL
could take a lead on 5G. That is heartening. However, keeping in mind
the
company’s track record, implementation could be a cause for worry.

The government must set a 18-24 month goal of right sizing the
workforce and
 bringing in efficiencies using industry benchmark on productivity.
The
government should look beyond voluntary retirement schemes.
It should
actively encourage entrepreneurship amongst employees and
 create a
platform for employees to come up with ideas. It can enable a
support
system
 for localised content and solutions for the Indian market and
also utilise
the
 start-up ecosystem for upskilling.

The new government must play a pivotal role in creating and
implementing
 a strategy to breathe life into the PSU. Genuine efforts are
 needed to get
BSNL off life support.

G Krishna Kumar
ICT professional and  columnist based in Bengaluru
Email: Krishnak1@outlook.com

Addressing India’s 5G conundrum

Mobile communication in India was primarily voice-based for many years.

Published: 08th March 2019 04:00 AM  |   Last Updated: 08th March 2019 03:17 AM

The recently concluded annual Mobile World Congress in Barcelona was abuzz with the emerging technology called 5G, which is expected to transform the communication landscape the world over. As with any technology life cycle, we witness hype before reality sets in. How soon will 5G become a reality and how quickly will India embrace this technology? Before looking at the possible solutions, let us understand this emerging technology a bit.

5G stands for the fifth generation of mobile internet connectivity. 5G promises 10 to 100 times faster data download and upload speeds compared to 4G. This technology will be applicable to an ecosystem of infrastructure devices (maybe billions of devices!) and is not just limited to smartphones. A recent report suggests that there are 7 billion connected devices globally, mostly comprising mobile phones, but that would increase 15-fold by 2025. This is because of the addition of connected home appliances, cars, transportation infrastructure, etc. 5G is also expected to reduce the latency (time taken for sending data from one point to another). This can help in innovative real-time applications across manufacturing, healthcare, education, etc.  

The rollout of 5G across the globe will happen gradually; 5G network suppliers as well as mobile phone makers are in a hurry to get their products into the market. Telcos across the globe are trying to outsmart each other. No wonder, a leading telco in the US recently started a controversial marketing campaign called 5GE or 5G Evolution (which is advanced 4G and has nothing to do with 5G). It is expected that the US, Japan, South Korea and the EU would roll out 5G services during the next couple of years. Any new wireless technology would involve complete infrastructure deployment as well as the availability of mobile handsets.  

Mobile communication in India was primarily voice-based for many years. However, over the past couple of years, India has suddenly emerged as a leading market for data consumption. A leading mobile network provider says that data consumption on mobile networks per user in India is among the highest in the world. While the increase in mobile usage is laudable, Indian mobile subscribers are a frustrated lot due to poor voice call quality, call drops and substandard data rates for browsing. While the benefits of 5G are too good to ignore and would help India become a ‘technology-first’ nation, the question remains: Will Indian telcos take the 5G plunge?

The biggest challenge is the availability of 100 per cent backhaul fibre optic network. Reports suggest that the US and China have over 80 per cent of the backhaul network fiberised, while in India, it is just about 25 per cent. In addition, what about the ability of the telcos to acquire equipment, infrastructure and more importantly spectrum? The total debt in the industry is over Rs 7 lakh crores.

Many telcos have requested for delayed payment for the spectrum they had acquired, and there are rumours that some telcos will file for bankruptcy. The situation is similar to the one we witnessed in the late nineties when the government intervened in bailing out the telcos that had filed for bankruptcy.
Should India wait for 5G to mature in other countries before bringing it here? Certainly not. The government’s Digital India push would get a major boost through the ultra high speed 5G network. Through Digital India initiatives, the government has already launched close to 70 services (including UMANG, Jan Dhan, eKYC, etc.) With more services on the anvil and more citizens availing the services, a robust 5G-ready infrastructure is the key.

The government has announced India will be 5G ready by 2020, but that seems far-fetched. It has plans to auction 5G spectrum. However, reports suggest even at the base price, the spectrum is 3-4 times more expensive compared to the cost in nations like South Korea. Considering the tepid response to previous auctions, the government is on the backfoot. 5G infrastructure would mean huge expenditure from the telcos for building the telecom backbone and for spectrum. The present price war and the ultra low cost tariff initiated by Jio has left the incumbent telcos struggling financially. In fact, a leading telco recently said the artificially low tariff for Indian subscribers would stop very soon as it is simply unviable for them.

How can the government help in bringing 5G? Firstly, the pricing for 5G must be reasonable with relaxed payment terms. But this would go against the government’s objective of maximising revenue from spectrum sale. Secondly, private players should be incentivised and the “Fibre First Initiative” mentioned in the National Digital Communications Policy (NDCP) 2018 should be aggressively implemented. Thirdly, the government should aim at reducing the regulatory taxes paid by Indian telcos, among the highest in the world.

They pay 30-32 per cent of their revenue as taxes (including spectrum usage charges, licence fees, GST etc.). Also, the government must push for ‘Make in India’ manufacturing for 5G infrastructure, equipment and even mobiles. Finally, an ecosystem should be created for coming up with India-specific applications by involving the right stakeholders including industry and academia.

Notwithstanding the current challenges in the telecom industry, India needs to embark on the 5G journey for the Digital India initiatives to be effective. The government and telcos must work together in building the right infrastructure that can provide superlative data speeds and user experience for all of us.

G Krishna Kumar
Columnist and ICT professional based in Bengaluru. Views are personal
Email: krishnak1@outlook.com