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News Heading  : Telecom pricing: India's future prosperity at stake

Post Date : 2012-04-26

News Source : The Economic Times

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Between 1405 and 1433, Ming emperor Zhu Di despatched admiral Zheng He on seven naval expeditions with the largest ships then known to mankind. These ranged far and wide and brought back treasure, strange animals and knowledge of the world's peripheries to the Middle Kingdom. But Chinese court politics, a twisted battle between palace eunuchs and court mandarins, discontinued these voyages and, by 1525, destroyed all ocean-going ships. China slumped into inward-looking stasis, till western gunboats smashed their complacency, established colonies and made opium the national pastime.

A couple of decades after Zhen He's first foray, Henry the Navigator of Portugal began an ambitious scheme of oceanic explorations that set off a competition of discovery among the Iberian kingdoms, which brought Columbus to the Bahamas and Vasco da Gama to the Malabar coast.

The government of India is today poised to take a decision as momentous as those by China's eunuchs and mandarins and Spain's Ferdinand and Isabella. The question is, whom would it emulate?

The issue is the cost of telecom, of broadband. What is at stake is not some additional government revenue or the finances of a handful of telcos, but cognitive empowerment of generations of Indians, the future earning power of millions of children from poor homes and the future competitiveness of the Indian economy.

High-speed broadband is changing the world already, and is poised to change it even more fundamentally. The US National Broadband Plan aims to provide American household data connectivity at the transfer rate of 100 Megabits per second (Mbps), and every school, hospital and government office, at 1 Gigabits per second. The French Supreme Court has ruled the right to broadband a fundamental right. Several European nations have recognised broadband as a fundamental right of their citizens.

Broadband affects the essence of human identity. Man is different from other fauna in that he has access to the experience of other members of his species across space and time, thanks to language, writing and books. What Pythagoras discovered in ancient Greece or the lyrical beauty Jayadeva described in 12th century India lives on and illuminates and delights minds in places distant from their original location. Depending on the quality of cultural life at home and at school, any human child is heir to the wealth of the world's knowledge and culture. What broadband does is to remove, to a great degree, cultural conditions at home from the equation.

If high-speed broadband can be taken for granted anywhere, a low-cost imaging device is all it takes to bring alive the mysteries of the universe or to light up the farthest corners of young imagination in the humblest of homes.

A formal Right to Education can do only so much to deliver education to India's masses, in the absence of fundamental changes in governance and the institutional structure of education. Ubiquitous high-speed broadband would do wonders, even in the unreformed world.

The key to financial inclusion and transparency in governance is, again, ubiquitous high-speed broadband.

The Economist talks of an ongoing third industrial revolution that can take manufacturing from the third world back to the first. Dispersed knowledge and digital technologies drive this revolution. Countries that can take high-speed broadband for granted will ride the revolution, while those who cannot, will trail behind, picking up the debris of emerging market hype and hubris.
So, is India gearing up to make ubiquitous broadband available? Perish the thought, notwithstanding the ongoing project to lay optical fiber to 250,000 panchayats, that is, about half the nation's local bodies at the village level. The problem is not so much the definition of broadband as data transfer at the rate of a few hundred kilobits per second, a hundredth of the speed required, as the cost of the final telecom services that will connect individuals across the last mile from where the optical fiber terminates.

Thanks to myopic identification by an ill-informed Comptroller and Auditor General of the collective good with funnelling investible resources via telecom companies to a profligate government, much of India today sees competitive low-cost telecom as a scam. The Supreme Court endorses this view, most regrettably. In reaction, the government pursues a course that will push up telecom costs and cramp roll-out. This will harm India's future.

To see telecom as a source of state revenue, instead of as the lifeblood of a new India in the womb of a changing world, is brutal ignorance of the kind that kills brides and unborn girl children.

The point is to make money not directly from telecom but from the generation of new income facilitated in myriad ways by ubiquitous, low-cost telecom.

It is possible to keep telecom costs low, while service providers get no special favour. In Sweden, 3G service providers share a common network owned by their common joint venture. A network provider can allocate spectrum to individual service providers on the go. Why should this not be possible in India, so that any operator can raise the demand for spectrum to an exchange that would supply it at a price determined by instantaneous supply and demand? Technology has gone beyond the need to allocate dedicated spectrum to individual services or service providers. The question is what policy choices we make in using technology, whether to follow China's imperial eunuchs and mandarins or the Spanish royals.

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