The Indian telecom industry has an important role to play in fulfilling the objectives of the “Digital India” initiative, owing to the deep penetration of operator networks. However, several challenges persist in reaching out to rural consumers, for both broadband and wireless mobile connectivity. Government intervention is needed to resolve the structural issues pertaining to the telecom infrastructure industry. Industry experts share their views on achieving the objectives of Digital India, including their expectations from the government and the way forward…
What is the current status of digitisation in India? What has been the progress on the Digital India initiative?
The objective of Digital India is relevant, but our teams are not well-prepared to take up this challenge. The Digital India programme will become a success only when broadband reaches every individual in the country. Policy and technology should move together to realise this vision. It is important to understand that a government’s objective, when drafting a policy can never be making revenues; instead, development should be central to the policy.
For instance, in 1995, when mobile phone services had commenced, they had not matured because the cost of licences was very high. In such a scenario, the government introduced the concept of adjusted gross revenue, which gave an impetus to the industry.
India is set to be one of the top five nations in terms of fixed-broadband subscriber additions over the next six years, among the countries tracked by Ovum. On the mobile front, India is already the second-largest in terms of the number of mobile broadband subscribers. The country had 163 million mobile broadband subscribers at the end of June 2015, second to China, which had over 746 million mobile broadband subscribers. Ovum expects India to lead the Asian mobile broadband market with the largest base of 3G subscribers, taking 3G penetration to over 50 per cent from 11 per cent at present.
India’s broadband prospects have improved as a result of the government undertaking the National Optical Fibre Network project and the Digital India programme. The government has introduced multiple initiatives under the Digital India programme, including migration to next-generation networks and ubiquitous broadband coverage. The government has been quick to secure support, not just from local partners like the Bharti Group, Reliance Industries and Tata Communications, but also from international technology giants, in order to fulfil its digital agenda. While industry participation is important, we cannot overlook impending issues on the regulatory side. It is imperative for the government and the regulator to address key issues such as introducing competition in the access networks and difficulties with right of way for private operators, and the long-standing issues related to spectrum availability.
Dr Mahesh Uppal
There is still a long way to go on the digitisation front. The key records of all government departments and agencies have not been digitised yet. Even in cases where digitisation has been carried out, the records are not readily and conveniently accessible to those who they pertain to or need them. Further, not everything that the public needs information on is related to government functioning. There is a lot of information that should be available online so that people can make well-informed decisions. For instance, a prospective home buyer can check the ownership of the property he intends to buy if all land records in the country are digitised and made available online. It is this information – that relates to people’s lives and livelihoods – that can transform decision-making. However, progress on this front has been incremental rather than transformational.
What role will telecom industry stakeholders (operators, vendors, infrastructure providers) play in realising the objectives of the Digital India programme?
Mobile has been at the forefront of the digitisation process, as it is the platform for providing mobile internet and mobile applications for e-governance, banking, health care, etc. Fixed line operators have been providing broadband internet and other e-services. Therefore, the telecom industry has been the biggest supporter and provider for Digital India, followed by the IT industry.
Operators and vendors have a crucial role to play, not just by providing the underlying infrastructure but also ensuring affordable access to services in a price-sensitive market like India. The huge digital divide in the country and low digital literacy have added to the challenges faced by both operators and service enablers. Operators need to work around the cost-effective deployment of broadband networks in order to reach a wider base of consumers.
Dr Mahesh Uppal
The telecom industry is an integral part of the programme and has a significant role to play in terms of extending connectivity and providing content, which will be a part of the services under the programme. The industry also has access to a lot of international information and experience regarding how to make the programme work more efficiently, and has a far better grip on the way markets function. The Digital India initiative will not succeed if it is implemented with an essentially bureaucratic mindset. It requires a serious market strategy and an understanding of how solutions can be created, implemented and made available to people. Therefore, there is a need for a creative and constructive partnership between the government and the industry in order to realise the goals of Digital India.
What are your expectations from the government in accomplishing the Digital India initiative?
Rural India is very price-sensitive; therefore, imposing any kind of licence fees in the initial period may not be advisable. It is better to impose the licence fee after allowing some time to the industry to grow. A relevant push for small players is also necessary. It is important to understand that the top five players alone will not be able to provide broadband services to the entire country. We have to bring in all stakeholders to accomplish this. The government has therefore come up with a consultation paper on the implementation of BharatNet, where it is looking at the possibility of involving local cable operators as they already have the necessary infrastructure in place and understand the needs of the local people better. In order to develop a broadband ecosystem in the country, it is important to not only focus on application and content creation, but also to hand-hold people in rural areas for dealing with viruses, spam and mailing.
The government has been coming up with very good policies and initiatives; however, successful implementation will play an important role. Initiatives such as Make in India have been attracting large investments. But a few issues in the handset segment still need to be sorted out. For instance, the IMEI number for each mobile device should be delivered by government agencies.
Meanwhile, in the provisioning of wireless services, the high price of spectrum has impacted pan-Indian coverage. As operators invest heavily in acquiring spectrum and setting up networks, service affordability has been impacted. This, in turn, will hinder the process of achieving Digital India’s objective of providing universal access to all.
Government support and participation will be necessary on multiple fronts, from ensuring adequate public funding for the programme to working out various business models in order to take broadband to rural and low-income households through subsidised services. There are many challenges on the regulatory front, and the government should address these in order to create a level playing field for interested participants.
Dr Mahesh Uppal
One key expectation is for the government to have a creative engagement with the industry. It should not only actively seek information from the industry, but also be willing provide it. It needs to put an effective consultative mechanism in place, which would allow both sides to discuss their concerns and address them effectively. The industry and the government must align their incentives. For instance, the government cannot simply expect the industry to do all that is necessary for a digital India without providing any support. Similarly, the industry must not expect that the government will function as simply as a company, because governments have to work with a different agenda, priorities and constraints. Such an understanding is a critical step towards effective engagement.
What are the issues and challenges that need to be resolved in order to create broadband highways and enable universal access to mobile connectivity?
One issue is that the policies do not match the technology. Second, the government is imposing unnecessary licence fees, which hampers industry growth. There is also a lack of faith in the idea that last mile access can be provided by cable operators and small service providers. Lastly, the government should not be focusing on making revenue from the services because its sole objective should be development.
The government’s attempts to push telecom operators to provide services in rural and uncovered areas by deploying various incentives and schemes have witnessed little success. Thus, more innovative models are necessary for achieving this objective. For instance, IP providers and internet service providers can be brought under the ambit of the Universal Service Obligation Fund. Meanwhile, equipment manufacturers or rural authorities can be authorised to deliver local services in rural areas. For a country like India, with a deep-rooted political system and administration, the challenges are many; however, state-level intervention can help in addressing them one by one.
Dr Mahesh Uppal
The country needs to mobilise a vast amount of resources to ensure universal access to broadband and mobile connectivity. The demand for broadband is uneven and still not strong enough to incentivise the industry in all parts of the country. The majority of the rural population may not yet see sufficient value in broadband to justify paying for the service. Since the demand has yet to mature across the country, the exercise of delivering broadband to all will have to be supply led. The industry needs to develop relevant content and design smarter business models to strengthen demand for broadband. There is a need to offer appropriate and affordable entertainment to people in local languages. This would require investments with a long-term horizon in sight because returns may not be visible in the short run.
The other issue is that the government needs to recognise that physical infrastructure would require a fair amount of investment. Further, there is a significantly high regulatory cost imposed by the government on the industry. The government should be willing to forego its short-term revenues (such as the levy on spectrum and licences) in order to ensure universal broadband access.