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)

Karnataka should address charging woes to become a hub of EV adoption

  The government must implement a hassle-free and affordable private charging system

G Krishna Kumar, APR 17 2022, 22:42 ISTUPDATED: APR 18 2022, 15:41 IST

The recent fire incidents involving four EV scooters have shocked both EV users and potential buyers alike. Will this put India’s EV story in jeopardy? Unlikely. Considering the importance of EV uptake in the country, the central government has ordered a forensic probe into the incidents. The manufacturers will have to take corrective and preventive actions to bring back the trust in EVs.

High consumer interest
It is encouraging to see consumers willing to experiment and switch to EVs. Sample this: Across India, 3.29 lakh EVs were sold in 2021, compared to 1.29 lakh in 2020. Electric two-wheelers contributed almost 50% of the sales, while electric three-wheelers contributed about 45% during 2021.
Vahan website shows UP leading EV sales with over 67,000 vehicles, while Karnataka stands second with sales of over 33,000 EVs. On the other hand, Karnataka leads two-wheeler sales in the country with about 30,000 vehicles sold.
A recent survey by Castrol has found that drivers in India require electric vehicles (EVs) priced at Rs 23 lakh, with a 35-minute average charge time and a range of 401 km. A new study reveals ‘tipping points’ at which most Indian drivers would consider switching to an EV. On average, they are looking to purchase an EV in just two years’ time.
It must be noted that the DC fast charging infrastructure has significantly improved, both in cities as well as highways, over the past three years. A journey from Bengaluru to Hyderabad or Mumbai or Kanyakumari can be covered with less anxiety. However, the state government can take specific steps in improving charging infrastructure significantly — both private/home charging as well as public charging in cities/along highways.

Private charging
Most people who buy an electric car would prefer to charge their cars in their home, and for this, a 7KW connection would be desirable. If a Bengaluru resident living in an independent house with a regular home connection of 2KW wants to upgrade to 9KW, BESCOM, Bengaluru’s sole electricity distribution company (discom), charges the customer about 1.5 lakh, including security deposit, installation charges. The application needs to be routed through designated electrical contractors and “convenience charges” are applicable for priority processing.
Now, let us look at apartment complexes. Most apartments were built 10-20 years ago and hence are not EV-friendly. While BESCOM is willing to help residents in apartment complexes with EV charging in parking areas, there are several Resident Welfare Associations (RWA) opposing the same.
BESCOM does not have the power to override the opposing RWAs as Karnataka lacks an EV policy that provides authority to the Urban Development Department (UDD) and the local civic body, the BBMP, to amend bylaws for supporting private EV charging.
The government must implement a hassle-free and affordable private charging system. New Delhi has implemented a consumer-friendly “Single Window” system. The ‘SWITCH DELHI’ initiative provides great insights for the end-users to switch to EV.
In New Delhi, for example, an end-user can apply for an EV charging connection through one of the four discoms. The connection is provided free of cost and an AC charger is provided for Rs 3,000 (3.2KW) and Rs 5,000 for a 7.2KW charger. A site visit is conducted by the discom and the charger is operational within a week. The Delhi government has an EV policy that overrides RWAs and can enable charging points for the end user directly.

Create awareness
It is highly likely that most EV owners in Bengaluru will not know that BESCOM has a provision for submeters, which can be used to charge EVs at subsidised rates (Rs 4.5 per unit). BESCOM would do well to create awareness about submeters.
In addition, safety guidelines for private charging in apartments and independent houses must be published. India has adopted the AIS 138 (Automotive Industry Standard) which recommends IEC60309 industrial sockets for EV charging. These sockets are waterproof and offer better safety compared to the regular 3-pin plug points at home.
BESCOM can join hands with the OEMs and companies that provide EV chargers to impart regular safety awareness campaigns. Importantly, a periodic audit confirming the worthiness of electrical wiring/switches/earthing at homes should be carried out. Perhaps, the home audit process followed by domestic gas companies can be replicated. Such audits will certainly help in reducing short circuit-related incidents, like the one where two people lost their lives in Tamil Nadu while charging their EV.

Highway charging
There are several private charging companies willing to invest in fast charging infrastructure along highways. Lack of support from discoms and rampant corruption appear to be the biggest hurdles. The time could be ripe for Karnataka to remove the discom monopoly and allow multiple discoms to operate. This would also spur competition for better service quality. The highway chargers must have a backup (maybe solar) so that the chargers are available 24X7 even during power cuts.
In addition to improved fast charging infrastructure along highways, the government should waive tolls for EVs till say 2027 (many countries in Europe have implemented zero toll and zero parking charges for EVs). Karnataka has already implemented tamper-proof high-security number plates (HSRP) and this would aid in implementing toll-free passage for EVs.
The Karnataka government needs to play a significant role in stimulating EV adoption. Willingness to improve the EV infrastructure along with a clear vision and timely implementation will help many buyers to switch to EVs rapidly. Chief Minister, hope you are listening!
(The writer is an EV enthusiast and columnist based in Bengaluru)

Protect youth from stock market perils

 IN PERSPECTIVE

G Krishna Kumar, MAR 28 2022, 00:02 ISTUPDATED: MAR 28 2022, 00:44 IST

A research scholar in Puducherry recently committed suicide owing to losses suffered in the stock market crash. There have been several cases of depression caused by stock market losses of late, especially among youngsters.

A global research report covering 36 countries spanning several decades suggests that a strong correlation exists between a stock market crash and depression/suicide rate, affecting men and women alike.

India’s stock market is relatively new and with a young populace, we would need the right interventions to help avoid cases of depression and suicide. But before delving into the possible interventions, it is important to understand the Indian stock market context.
The Indian stock market has gone up significantly ever since the  March 2020 market crash. The benchmark index Sensex has jumped 2.5-fold from March 2020 to October 2021 and even after the current crash, it is over two-fold. Such a phenomenal increase has meant that more and more youngsters and even college students are attracted to the stock market with the lure of easy and quick money.
The Securities and Exchange Board of India (Sebi) data shows that India has over 7.7 crore Demat accounts, up from about 3.6 crore accounts back in March 2019. Reports suggest that India has been historically adding about 4 lakh Demat accounts pre-Covid and now has zoomed to 20-30 lakh every month. It is not surprising that 75% of all the new accounts belong to people in the under-30 age group. Awareness about the stock market has gone up significantly over the past two years with many experts gaining celebrity status with “stock tips” on social media apps. The reduced interest rates in fixed deposits and savings bank accounts have aided the sudden increase in interest towards the stock market.
Each person would adopt strategies that would suit their risk profile, be it short-term trading or a long-term investment.
Warren Buffet, the most famous investor, is widely acclaimed as the 'Guru of compounding'. He achieved success by patiently holding on to the stocks for several decades.
In his book 'The Psychology of Money', Morgan Housel beautifully summarises that an average person with no financial background or flashy degrees can create wealth by patiently waiting for decades. The example of  Ronald Read, a petrol station attendant who saved his earnings, invested in Bluechip stocks and waited patiently for decades and created over $8 million wealth during his lifetime, is worth mentioning. The author argues that financial success is not hard science but a soft skill where how you behave is more important than what you know. He also stresses lesser greed and a longer time horizon as the key to wealth creation.
The other classic on personal financial advice is from 'The Richest Man in Babylon'. The 1926 book is a collection of parables that focuses on simple concepts like "paying yourself first", "living within your means", "investing in what you know" and the importance of long-term saving.

Financial literacy
While the Indian stock exchanges regularly run awareness campaigns — 'Soch Kar Samajh Kar invest Kar' from the National Stock Exchange (NSE) is very much appreciated — much more needs to be done. Market regulator Sebi should bring all the stakeholders to further improve awareness about the risks and possible benefits of stock market investing. There are several new financial investment instruments like the new NSE IFSC for investing in US-listed stocks. Sebi may do well to impose additional mandatory guidelines for all TV and social media stock market experts.
Can stockbrokers use advanced computing technologies like Artificial Intelligence to identify the risk profile of their customers? Can they run some proactive intervention for such customers when they see them falling into the yellow or red zone?
We need to prepare our Gen-Next to be financially literate. The National Payments Corporation of India (NPCI) and the CBSE have introduced a financial literacy textbook for class VI students to impart basic financial concepts at the initial stage of education. While this initiative must be lauded, the government must use the NEP (National Education Policy) framework to strengthen financial literacy.
The government should embark on a series of initiatives to educate students about money management and stock market awareness. Maybe a mandatory course for college students across disciplines with a mix of global and Indian examples could be used to increase awareness.
The risks associated with the stock market and other financial instruments must be emphasised to our youth, thereby bringing financial discipline among them. We need to act before it is too late.
(The writer is Managing Trustee, GVB Trust)

It is easier now to start a new business

G Krishna Kumar, NOV 16 2021, 23:32 ISTUPDATED: NOV 17 2021, 05:44 IST

It is easier now to start a new business my experience in setting up an IT company back in 2009 and now in 2021 throws some interesting perspective on the changes

The World Bank has decided to stop publishing the “Ease of Doing Business” and “Ease of Starting Business” reports from this year. The last report on Ease of Starting Business ranks India at 136th position in 2020. While India could improve further, my experience in setting up an IT company back in 2009 and now in 2021 throws some interesting perspective on the changes.    

 

Ease of setting up business: The Company name approval is the first step for registering a business. The process of name approval used to take 15-20 days back in 2009, now it just takes one day. Back in 2009, the name approval was handled by the state government’s Registrar of Companies (ROC), while now it is centralised.  
A major improvement is the existence of a single-window during the company incorporation. This allows for Provident Fund, Professional Tax, ESI, PAN and TAN accounts to be created instantly at the time of incorporation.
Unlike earlier, there is a greater emphasis on self-governance and self-certification with higher penal provisions. The accounting and labour compliances have been simplified now (based on the Companies Act, 2013) as against the Companies Act 1956 used as the basis in 2009.  Labour laws have seen improvement with PF, ESI, Shops and Establishment Act provisions going completely online. The new Labour Code is expected to further simplify compliances.     
Thanks to the Digital India initiatives, video KYC and online application completely removes the need to visit any government office for the whole incorporation process. Is that not wonderful? Company incorporation used to take three months back in 2009 and now it is just about 4-5 days.
Can the turnaround time be further improved? Certainly possible. If we benchmark against New Zealand, where business incorporation takes just half a day, that would be a boon.
Unlike in 2009, nowadays the moment the company is incorporated, non-stop unsolicited calls and emails from at least a dozen private banks follow.
The banks are aggressive in selling why they are the best compared to the competition. Interestingly, the public sector banks don’t figure in this. It is unclear as to how the banks gain access to the contact details. In any case, this experience is certainly not desirable.   

Infrastructure and “anything” as a service ecosystem: The communication infrastructure has seen significant improvement with 5-10 Mbps speed being premium back in 2009, while now 500 Mpbs is a norm for corporate usage.  The other big difference is the type of physical infrastructure.
Unlike earlier, now anything that a business would need is available as a service. This helps the company to focus on core activities while all the non-core/ hygiene activities can be outsourced.  For any company setting up operations in India, managing physical infrastructure would be a major task – this includes the building, security, facilities management among others.   
“Workspace as a service” is the one-stop solution for this. Managed workspace or co-working space has gained popularity as they offer attractive options with flexibility. Similarly, several companies offer HR as a service, recruitment as a service, finance/compliance as a service. This ecosystem provides a great impetus and encouragement for new companies to be established.  

Attracting talent has become tougher: With the IT industry in India doubling over the past 12 years and several MNCs setting their shop in the country, this has meant that the techies have no dearth of options to pick the “right” opportunity.
A recent report from staffing firm Xpheno states that several Indian IT companies have registered an annual net headcount growth of 15-25% over the past five years.
The report also states that 900+ tech startups have received over $27 billion in funding and the spend on tech talent is at an all-time high.  In addition, expansion hiring from existing tech companies has spurred demand for tech talent. On the talent supply side, there is a surge in job seekers now as most job seekers avoided job change last year due to the pandemic.   
We are witnessing nothing less than a war for talent and it is indeed a job seekers’ market. Companies are offering huge salaries, perks like Employee Stock Options (ESOPs), joining bonuses, flexibility to work from anywhere, and even fancy titles to name a few.
Most candidates have 2-3 offers in hand and are constantly looking for “better” options. The current demand-supply mismatch could make India become uncompetitive and some work may move to low-cost countries.
However, no other country can supply 3 lakh fresh engineering graduates in software and related disciplines. Notwithstanding the current challenges, India would continue to be the prime destination for technology companies as the sheer size of the talent available in the country is unprecedented and hard for other countries to match.
Summing up, the ease of setting up a new business has significantly improved over the past 12 years. The ecosystem for supporting new companies to establish their operations has also been a great positive change.
Talent acquisition has become tougher compared to 2009 due to significant demand-supply mismatch, but then India still accounts for the largest pool of highly skilled technology talent in the world. New technology companies will continue to find India attractive!  
(The writer is an Information and Communications Technology professional 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)

Curb corruption in real estate

G Krishna Kumar, JUL 30 2021, 00:52 ISTUPDATED: JUL 30 2021, 01:57 IST
There are gross violations of building byelaws with apartments constructed on residential sites
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Reports indicate that 30-50% of the sale value in secondary (Tier2/Tier3 developers) or resale properties happen in cash.
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Contrary to popular belief, even after fifty-six months since demonetisation, real estate continues to thrive on black money. The only exception appears to be the relatively expensive primary real estate market led by Tier-1 builders.

Reports indicate that 30-50% of the sale value in secondary (Tier2/Tier3 developers) or resale properties happen in cash. A reason often cited is savings on stamp duty by quoting transaction value to be close to the guidance value instead of the market value. What prevents the government from keeping the guidance value at the market price?

Cash and corruption

Of late, apartments constructed by Tier 2/3 builders in residential sites are becoming common in Bengaluru and provide an easy opportunity for cash transactions. While almost all construction suppliers accept digital transactions from builders, it is a mystery as to why the builders still insist on cash from the apartment buyers.
There are gross violations of building byelaws with apartments constructed on residential sites. While BBMP’s building byelaws clearly states that a maximum 3 floors excluding parking can be constructed, the builders openly flout rules and construct 5 or 6 floors.

Although BBMP allows a maximum of three kitchens in a residential site . most apartments will have 10 or 12. Over the past 10-15 years a very “corporate“ term called “joint venture” or JV has gained popularity. A case where the site owner and the builder share the constructed apartments. Both the parties try to maximise their gains and is the main reason for spurt in high rise buildings within residential localities.

What about the quality of construction of these apartments? Who is accountable if such buildings collapse?

The authorities appear to turn a blind eye towards the overall issue. In general, all it takes is just one apartment with 10 houses to set the precedence for others to follow suit. Sample this: A regular residential house would have about 5-10 people, while a high rise apartment in the same site would house 40-50 people. Are our roads and civic infrastructure designed to take on such a load? 

The nice neighbours in residential areas with our typical “namage yaake beku” (why bother) attitude helps the builder-authorities nexus. Neighbours often do not complain, fearing repercussion as our system does not offer any protection to them. Also, why should anyone complain? The violations are so obvious to the authorities. It would boil down to the government and civic authorities’ willingness to act. The nexus between the legislators and civic authorities are too obvious to ignore. How do we get over the ‘wolf guarding the sheep’ phenomena? 

Can the state government audit and publish details about illegally constructed apartments in residential localities? How do Banks provide loans for illegal constructions? Can utility providers like BESCOM and BWSSB refuse connections to these complexes?

The whole purpose of residential locality is to allow people to stay in independent houses. Unlike other cities where apartment and flats are popular, Bengaluru is still known for its residential localities. It is rather sad to see this identity go away.

Clearly GST, RERA and other measures have failed to curb black money and corruption in the real estate sector. It is time the government, civic authorities, and urban planners bring about structural changes that will lead to transparency.
If rules need to be relaxed, so be it, but the system must discourage and penalise wrong doers, at the same time support effective grievance redressal mechanism. Government should empower local residents/neighbourhood associations to stop construction of any building that exceed FAR (Floor Area Ratio) threshold.

For transactions in the secondary market, can the stamp duty be reduced significantly if the transaction is at market value? This could encourage buyers to go for 100% legal transaction.

Until we see some strong system-led actions, the tax paying middle-class will continue to be in a dilemma if they need to compromise on their aspirations or on their principles. In this digital age, isn’t it intriguing that the government remains silent despite the rampant corruption in real estate? It is time the vicious link between black money/corruption and the real estate sector is broken. Can Karnataka’s new chief minister address this on priority and show the way to the rest of the country?

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