Future Trends in Telecom in India
Over the past few months that I have been contributing to this tech portal, there has been a sea change in the telecom industry. Each time I have a feeling that I have nothing to write about and every week I have proved wrong to myself. I am trying to look at the newer emerging trends, which are going to sustain the telecom companies in the future.
The initial roll out of the networks was a boom time for the equipment manufacturers abroad. This indeed would have been a golden chance to ramp up domestic production but opportunity slipped past by. I am told that much of the equipment is imported thus escalating the costs for the roll out. This is a huge dampener for the eventual roll out for the rural areas who have been left out of the ambit of telecom revolution for too long. Part of the reason is the perceived inability to pay and part is the high cost of initial roll out of infrastructure. In my opinion, instead of taking a short-term view of paying capacity of rural areas, the telcos should focus on a long-term game. It was heartening to note that finally the manufacturing arm of the government(C-Dot) was given the budgetary support. How much it pays out in the long run, only time would tell.
There is one word that telecom companies are hearing a lot these days. Volumes. They need volumes to sustain the network and the fancy army of morons they have hired. In this regard, companies like Reliance and Tata’s have gone aggressive over the final roll out of the connections to PCO owners. I heard that Reliance is giving up to 30% commission on each call. How they market out the connections is a tough battle indeed. If and when the carrier access codes are introduced, we could really see a blood bath on the streets, as far as prices are concerned. I am strong in my belief that prices can go down by almost 40% of the present structure. Part of the price cuts could be because of the tax exemptions, if and when these companies can lobby for the same. Part of the same could be to earn through volumes.
The next killer application is made out to be the value added services through mobiles. R connect services from Reliance would be going paid soon. They offer plethora of services, even train ticket booking on mobiles. Recently, the big daddy of Indian telecom revolution, Sam Pitroda was marketing his own services to pay bills through mobiles; in effect moving towards a cashless society. He wanted to patent the same. I have no idea as to how it worked since details were not available. However, NTT Docomo in Japan offered the same facility there. How this is replicated in Indian scenario is worth looking out for.
There is a lot made out for the 3G services. Expect more lobbying in the corridors of power for the scarce spectrum. Should 3G services be introduced in India? Would that serve the purpose? The initial buzz is that 3 G services would give the always-on connectivity to the mobile owners. That was said so about the GPRS and much hoopla was raised in the market. Yet, everyone knows about the pathetic access. Barring a few circles, my dial up is at times faster than the same. And yes, I am using BSNL! In Europe, the operators have actually made a killing out of the same. The fact is that 3 G networks can carry more voice calls than the present networks. If it is the voice network, then perhaps it may be beneficial. How many people, realistically speaking would be carrying the top of the line blackberry s and laptops to access the network? A minuscule minority who wishes to flaunt its latest toy. I am circumspect about 3 G networks really being a “killer application” until the time handset prices fall down to more realistic levels. As usual paid media exposure and exclusive “previews” go a long way to give initial publicity.
The proposed merger of BSNL and MTNL is consuming a lot of ink. There have been various suggestions floated in the media about the ways and means the “synergies” could be obtained. The purpose is not to get in the awkward details here. My reaction to the same is that let the status quo remain. BSNL should concentrate more on rural spread and better Internet connectivity. MTNL should be divested totally. While in principle I am opposed to privatization, MTNL has out lived its utility as a worthwhile company. Interestingly, in the recent quality audit by TRAI, its customers were the happiest for its CDMA services. Strange but true.
Finally Broadband. This is a late non-starter here. In terms of pricing and download limits, this is pathetic for users who wish to consume bandwidth for file sharing or extensive web surfing for any reason. According to telcos logic, they feel that ordinary user should not get more than a few hundred MB’s. This only exposes the socialist mindset, which forces the ordinary citizens for looking up to these “mai baap” bosses. Come what may, the present state of Internet would take another year to come to decent levels. Meanwhile Reliance is getting aggressive over corporate customers for giving out bandwidth for monitoring through video cameras. They have implemented the same across their web worlds. Next time around in a web world, have a look. It is possible that you are being looked at! Their broadband services for home users seem to be in a limbo. Since they are planning to introduce TiVO like functionality across India, there could be a problem in getting across the different entertainment channels on board as of now. No surprise, that Reliance is amassing a huge library of its own. Streaming networks make business sense because plain vanilla broadband is not sufficed here; given the poor penetration of the personal computers. Wireless broadband in terms of WiFi and WiMax may soon be a reality given the fact that Dishnet has planned to roll out its services. The grey area of security remains unanswered as of now. Would that change in the coming months given that the PC prices are falling to realistic levels? I d try and analyze that later elsewhere.
I am keeping my fingers crossed for a decent dial up in my city though.