Hyderabad: Data is a tool born out of scarce natural and national resource spectrum which needs to be used judiciously. The advent of omnipresent internet transformed the world as a knowledge hub as its seamless exchange feasible instantaneously across the globe.
This has become a vital tool in education, research, healthcare, exploration of the universe, all technologies & businesses, any aspect of human life in the world including war and peace. This has led to more economic prosperity and poverty alleviation around the world.
While the ambition of the initial Telecom Policy was to extend speech, the present trend is to make available high-speed data with a marketing slogan that “people are data hungry.”Let us peep into the following statistics available in public domain (as on Oct 2019):
| Parameter | World | India |
| Population | 7.8 bn | 1.32 bn (2nd) |
| Mobile phone users | 5.13 bn | 1.17 bn (2nd) |
| Smartphone users | 3.3 bn | 345 mn (2nd) |
| Internet users | 3.2 bn | 627 mn (2nd) |
| Facebook users | 2.45 bn | 241 mn (1st) |
| Youtube users | 2.0 bn | 265 mn (1st) |
| Whatsapp users | 1.50 bn | 400 mn (1st) |
| Twitter users | 330 mn | 7.9 mn (8th) |
Nowadays people using their smart phones ubiquitously is a common scenario. Social media makes an individual ingenious, but society as sectarian. Data addiction reached such a feverish pitch that post article 370 abrogation, stake holders are more vocal about the restoration of the internet than other essentials. Addiction to social media buoyed by free and cheaper data is not only denting social harmony but is also causing a considerable threat to national security.
The huge growth of IOTs billions of sensors uses so much power that carbon emissions are impossible to be tamed and global warming escalates. Around eight million data centres used for storage and transmission of data, having components like routers, switches, security devices, storage systems, servers etc; generate a lot of excess heat requiring additional cooling systems.
Currently, internet (or ICT) accounts for 6-10% of world’s energy consumption and these contribute to 4% of green house gas emissions. This is further increases by 5-7% each year. Internet usage is inevitable, but we do not have to sacrifice our planet in order to keep using it.
Indian Scenario:
Initially, the TSPs and government together were reluctant for fixing the floor price for telecom tariff under the guise of healthy competition. When this has led to irrevocable fall in revenues, and after the verdict on AGR by supreme court, Vodafone-Idea and Bharti airtel have knocked the door of the government seeking measures to help the sector reeling under financial stress by raising tariffs. Under extreme compulsions of survival, themselves increased the tariffs by around 40%.
When the Supreme court on clearly defining the AGR directed the TSPs to clear the government dues, Bharti Airtel now states that telecom industry needs some sanity and orderliness. Ironically, the same TSP along with another bigwig CDMA player Rcom behaved otherwise with their irrational and predatory pricing to achieve a faster increase of subscriber base.
They have undoubtedly flouted the basic tenets of economics that no product/service can be sold below its cost price. Government and regulator all along were so considerate, resulting in following notable losses to exchequer.
- Policies from time to time in fixing tariffs for a Licence fee, Spectrum, SUC and IUC were so liberal, loosing substantial public revenues
- Nevertheless of these liberalized tariffs, TSPs raised litigation on the computation of AGR leading to a long drawn legal battle. The dues piled up as on 31st October 2019 is about Rs 92,000 crores for the license fee and Rs 55,000 crores for SUC. In spite of hon’ble supreme court directed that these telcos to pay immediately, govt shown further magnanimity to consider a two-year moratorium
- The unethical and unsustainable business model followed by TSPs dwindled their own revenues, steered them into huge debt traps resulting in piling up of more than 4.5 lakh crores of stressed bank loans causing increased NPAs to banks
- The bankruptcy filed by Rcom to the tune of Rs 49,000 crores still in resolution process through IBC, is expected to recover less than 30% as per the current indications
- With several exits and M&As, number of financial litigations cropped up and more than a dozen TSPs are reduced to just 3
- BSNL and MTNL being government PSUs, having deprived of level playing field in policy planning, CAPEX and OPEX parameters, suffocated beyond sustainable levels, have to be aided by the government with a revival package of about Rs 77,000 crores which include VRS for about 90,000 employees. Faithful DOT employees existing prior to the formation of BSNL and obediently opted to work in BSNL, and retired duly covered under CCS pension rules (about 2 lakh) were deprived of their pension revision since Jan 2017
- Also though the government of India is so magnanimous to launch “AYUSHMAN BHARAT”, to provide healthcare to about 50 crore citizens; it is heartening that BSNL is on a mission to deprive its minuscule number of pensioners of the existing medical facility on the pretext of funds shortage.
Suggestion for TRAI
Though belated, the action taken by TRAI to float a consultation paper on setting up floor price for the telecom services is a welcome step. TSPs should concentrate on competing in providing better quality of service to customers as per the set QOS parameters, in a narrow range of tariffs to be fixed by regulator.
A closure look at facts reveals that while the prices of all essentials including fuel over the past 20 years either more than doubled or trebled, the call and data prices steeply fell by 92 and 98%. Triggered by RJios entry, India’s data consumption per smart phone grown to the highest in the world at 9.8GB/month.
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This growth presumably is not productive due to the fact that while the USA is the 7th richest and India is 107, USA stands 19th in per capita income while India is in 157, USA has 66 universities in world top 200 while India has just 1; cost of data in India stands cheapest at 1st position with the USA at 182.
The average cost per GB of data is $0.26 in India, $6.66 in UK, $12.37 in US, $15.12 in South Korea and global average standing at $8.53. Therefore, the contention of COAI that the reserve price of 5G airwaves fixed by TRAI at Rs 492 crore/MHz, is nearly 30-40% higher than that of South Korea and USA is totally unacceptable.
One should not expect to do dirt cheap business and earn profits at the cost of government exchequer which is public money. Individuals and entrepreneurs governing the private finance should have the same outlook toward public finance of banks and government.
The need of the hour is, to devise rational costing of resources and fair pricing of the product, ending the freebies and subsidized price regime to create sustainable business environment for all the stake holders. For a common citizen as individual or family, the share of telecom expenditure may be at best around 5% of the monthly budget.
All along, Indian consumer enjoyed 98% reduction on 5% of the budget, while the rest of the 95% of the expenditure rose by nearly 300% in the last 20 years. Bharti Airtel now emphasized that the ARPU currently standing at Rs 130 should be gradually taken to Rs 300.
Even a fourfold increase of call and data tariff from the current levels should have a minuscule effect on Indian consumer. This will have multiple positives viz
- The earnings of TSPs would improve for absorbing inconceivable technological changes in the offing without compromising govt revenues
- Increased govt revenues will brighten the macroeconomics and will be useful for the inclusive development of the country
- Productivity of data usage will increase by judicious usage of consumer.
(Article by M R Patnaik, Retd Deputy General Manager, BSNL, Visakhapatnam)
