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)

Multimode delivery: The best way to impart learning

By: G Krishna Kumar | 

Published: June 16, 2020 4:20 AM

Digital education picked up pace with platforms like SWAYAM and PM eVidya. But when the time has come to test its effectiveness on a grand scale, it is surprising to see governments, schools and parents alike refusing to accept screen-based education.

Both the Centre and states have divided views on online education. This conundrum needs to be handled effectively as online education is likely to be the norm. Digital education picked up pace with platforms like SWAYAM and PM eVidya. But when the time has come to test its effectiveness on a grand scale, it is surprising to see governments, schools and parents alike refusing to accept screen-based education.

Online interactive: Instead of completely banning online education for kids in the lower classes, we need innovative means to impart some form of education. While everyone hopes kids will be back in schools in full strength in the next few months, the risk of virus infection is alarming and parents would do well to support the government in supporting screen-based teaching.

India is faced with two challenges in terms of internet connectivity—quality of the internet and the digital divide. On quality, India ranks low in the global speed index (71st among 139 countries); while on broadband India is ranked 31st (of 174 countries), it is an urban phenomenon. India has made abysmal progress in getting the rural broadband infra with BharatNet. A report states that the target was to connect 2.5 lakh villages, but Wi-Fi is available only in about 23,000 gram panchayats.

So, mobile internet seems to be the only way out in the near future. With over 10GB data usage per month per person, India is among the top nations on mobile internet usage. With 5G not happening anytime soon, we need to live with poor internet speeds. The bigger issue is the gap in internet penetration in urban and rural areas—urban penetration is 100%, rural is less than 30%.

For addressing the have-nots, the government should consider giving tablets (something like Aakash tablets that gained popularity a decade ago). The euphoria around Aakash died too soon. The government must consider some form of ‘tablet and internet yojana’ for addressing underprivileged kids. The tablets can be controlled solely for education purposes. CSR funds from corporates can be put to good use for procuring and distributing tablets.
It’s time to ponder why India cannot have its own Zoom-like app exclusively for education. Can’t the government task top tech institutions to create a scalable app?

TV as a medium: Data shows that TV ownership in households in much higher than smartphones. In south India, for example, 95% homes have TVs. While it is lower in other parts, the government can revive TV-based learning. Do you remember UGC education programmes in early 1990s? Each state can have its own DD Gyan Darshan channel. Even better, the government could incentivise free-to-air TV channels for carrying classroom sessions. TV-based delivery will not be interactive, so schools can enable regular touch-time between parents and kids to monitor progress and provide guidance.

Multimode delivery: The government can enhance the draft National Education Policy (NEP) and formulate a long-term strategy for standardising education through a mix of online interactive, online one-way delivery (recorded sessions) and on-premises (regular classrooms) methods.

The draft NEP has the 5-3-3-4 design comprising of five years of foundational stage (three years of pre-primary school and classes one and two), three years of preparatory stage (classes three to five), three years of middle stage (classes six to eight), and four years of secondary (classes nine to 12). Perhaps a graded multimode delivery from, say, 100% on-premises method for foundational stage to 60% on-premises for secondary students can be considered. For students pursuing UG/PG, the online portion can be 70-75%—in-person interactions cannot be ignored and hence 25-30% of the time students will have to be present on-premises. Such a model could go global as well.

Indian students planning for higher education in foreign countries will have to spend much lesser money in earning their degrees as their need to be physically present on-premises will become considerably lesser.

The pandemic has provided us a great opportunity to implement multimode education delivery; now we need the right framework.

An ICT professional and a columnist based in Bengaluru. Views are personal
krishnak1@outlook.com

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

Creating world class talent in India

A holistic approach in higher education based on knowledge, skill and value is required for our nation to become a global talent leader
Published: 22nd February 2020 04:00 AM  |   Last Updated: 22nd February 2020 02:32 AM

By G Krishna Kumar And PVKrishna Bhat

A recent report states that India jumped five ranks to 35th position in the Worldwide Educating for the Future Index 2019. The jump has been attributed to India’s efforts with the draft National Education Policy (NEP). This should serve as a motivation for the Narendra Modi government to get the much-awaited final NEP out soon. The final NEP will be based on the draft NEP, but far fewer pages compared to the 450+ page draft. It is understandable that the NEP committee spent over three years with over one lakh meetings to frame the policy. One of the members of the committee, Prof M K Sridhar, mentioned that the NEP committee had to consider a hundred-year history of Macaulayan education system in the country, followed by 70 years of the post-independence system to provide an exhaustive policy framework for the next generation education system. The draft NEP received several critical inputs over the past 6 months or so. It is still unclear as to what extent tweaks would be made in the final version. But no policy is perfect, and it would make sense for the Centre to move ahead to finalise the policy and allow for periodic changes. 

This article focuses on the NEP recommendations, specifically around Higher Education Institutions (HEI) and suggests some improvements. India’s struggle to get into the top 100 ranking amongst global universities is well known. Will India become one of the best over the next two decades? It is certainly possible if the policy is implemented in the right spirit irrespective of government in power.Teaching the Teachers: The draft policy talks about categorising HEIs into three types of institutions, type 1 being research universities, type 2 teaching universities and type 3 colleges. The concept of creating teaching universities is a welcome move. These will encourage teachers to constantly upgrade their knowledge. The report envisions 1000-2000 such universities to come up over the next two decades, reskilling thousands of teachers. In the overall scheme, it would be useful for corporate employees to be given a chance for lateral entry into HEIs as teaching staff with an appropriate bridge training programme in type 2 universities.  Multi-disciplinary approach in HEI: The other highlight of the draft policy is the aspect on fostering innovation through emphasis on liberal education. Over the past decades, Indians have been blocked by the “stream” approach in higher education, where students are segregated into science, arts, etc. Instead, the approach here is to encourage students to take up specialisation in certain subjects while also supporting them on liberal education like philosophy, music, etc.

There are several examples from India’s own history where universities like Nalanda and Takshashila provided high quality multi-disciplinary structure for the holistic development of students. It is also well known that several global innovations were achieved due to innovation spurred by interdisciplinary setups in universities and corporate houses. However, this means a great amount of unlearning is needed at all levels, including government set-ups and educational institutions. The policy has suggested that all standalone professional institutions must become multidisciplinary by 2030. A tall ask, but much needed for the transformation to be effective. The suggestion on creating a National Research Foundation as a vehicle for funding and supporting innovation in all academic disciplines is a good move.Skill Development: A recent report from the UN Population Fund (UNFPA) estimates that India’s working age population (15-59 years) will reach 65% by 2030. India will also enjoy the longest demographic dividend compared to any other country till 2055. India still has 35 years to make the best in the global job market. Vocational education in all institutions offering professional education will play a key role in India developing a skilled workforce. The policy talks about multiple entry and exit options for students, with relaxed age and time limits providing the students with the required flexibility.

As the policy provides institutions with autonomy on the course content within a larger framework, it is expected that three types of institutions would emerge. The first one would be innovation and multidisciplinary institutions. The second one will be aimed at research-oriented students. A third, larger set would opt for “learning by doing”. This would mean 70-80% of the course content will be practical and industry relevant. There are several examples of universities and educational institutions across the globe that have successfully implemented the “learning by doing” method. Such institutions would help produce an industry-ready workforce. Values: As India aspires to become a hub for world-class talent, the focus on knowledge, skill development, and strong language skills (Indian and foreign) is paramount. However, our education system should also ensure students are high on values and ethics. 

In general, a lack of values can be attributed to a societal issue as well as a reflection on our education system. Does a highly competitive and stressful educational environment force people to adopt wrong means? Perhaps the flexibility for students as per the new policy could provide some relief.Considering our rich tradition and comprehensive life philosophy, the education system must be based on our social and economic needs and inculcate good values in students. Summing-up, the suggestions in the NEP should be implemented in the right spirit for transforming our education system to spur innovation and create high quality talent for industry and research needs. A holistic approach in higher education based on knowledge, skills and values would be required for India to become a global talent leader over the next two decades.

India’s struggle to get into the top 100 ranking amongst global universities is well known. Will India become one of the best over the next two decades? It is certainly possible ... the suggestions in the NEP should be implemented in the right spirit for transforming our education system to spur innovation and create high quality talent for industry and research needs

G Krishna Kumar
ICT professional & Columnist based in Bengaluru Email: krishnak1@outlook.com

AND

P V Krishna Bhat
Chancellor, Central University of Orissa, Koraput

An electric car on a 900 km journey

Ever since I bought a brand new Korean-made electric car a few months ago, I was keen to go on a long drive with the family. 
Published: 16th December 2019 04:00 AM  |   Last Updated: 16th December 2019 02:20 AM

By G Krishna Kumar

Express News Service

Ever since I bought a brand new Korean-made electric car a few months ago, I was keen to go on a long drive with the family.  

Despite some opposition, I managed to convince my family members to take the electric vehicle (EV) from Bengaluru to Sirsi for attending a wedding. Sirsi is a hill station and a popular tourist spot in Uttara Kannada district. The overall trip of over 900 km seemed like a tall ask as there is no charging infrastructure along highways. This meant some serious planning for charging the car and I had to carry fast-charging equipment along with me.

A distance of about 285 km from Bengaluru to Shivamogga was covered comfortably. After charging the car overnight, it was an easy drive from Shivamogga to Sirsi (a distance of 150 km)  via the famous Jog falls. Nice roads, greenery and pleasant weather made it an enjoyable driving experience. Without any additional charging at Sirsi, we were able to drive back to Shivamogga. One more round of charging there meant a good time to catch up with friends and family and then it was back to Bengaluru, about 310 km (via NH75) with no further charging.  

The range an electric vehicle can provide greatly depends on the difference in altitude between origin and destination, quality of road and driving style. The range anxiety cannot be ignored due to the nonexistent public fast-charging infrastructure. The car had to be driven at lower than optimal speed and it was slightly disheartening to see smaller petrol and diesel cars zipping past the electric car. The journey was adventurous as we were solely dependent on personal charging infrastructure.

It was encouraging to see awareness of electric vehicles amongst people in places like Sagar and Sirsi. People’s curiosity about the range and cost per kilometre is worth mentioning. Many of them are keen to go for such a vehicle as it is known to be non-polluting.

While many new electric cars are poised to hit the Indian roads shortly, for them to be a true all-purpose family car, the charging infrastructure on highways and tier 2/3 cities should be established on a war footing. The government has done a great job in improving awareness about electric vehicles, reducing the GST on electric vehicles and providing income tax benefits to the buyer. But without good infrastructure, the job is only half done.

G Krishna Kumar
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