MEETING THE TELECOM CHALLENGES
Aruna Sundararajan has been India’s Telecom Secretary and Chairman of the Telecom Commission. A 1982 batch IAS officer from Kerala Cadre, she is one of the most senior civil servants of the Indian Administrative Service in the country. She has over three decades of experience in a variety of leadership roles in the Central and State Governments, especially in Economic and Development Administration, Investment Promotion and IT/Telecom Domains. She recently retired from her job. We discussed various issues of telecom industry with her How would you describe your stint in the telecom industry?
I think, it was the most exciting because telecom is one of the most exciting, if not, the most exciting sector. At the same time, it is the most challenging and complex, and also the most educated. It has three aspects, unlike conventional sectors. Some sectors do only the regulatory role, some others do purely the facilitating role, and some other areas do the technology role. There are very few sectors in the Government of India, and that too, remember, telecom is the exclusive domain of the centre. It is not the states! So, other than defence, telecom or railways, there is not any other sector where the Central Government department is so powerful. It really shapes the sector more than any other department does. Railways are slightly different, because that is pure infrastructure.
Telecom has huge technology, infrastructure, and regulatory aspects, and combines all the three. It is a fascinating sector. This is the sector, where, I believe, the private and the government sectors are joined at the hip. Therefore, both have to step in hand-in-hand. Otherwise, you won’t actually have the ubiquitous telecom sector. Therefore, I would say that it was an extremely satisfying and rewarding stint.
Did you have any vision when you took charge of the DoT? Did you have an idea of how an ideal Indian telecom sector should be?
I must share this with the readers. When I moved from IT to telecom, everybody in government circles felt that it was a hefty ministry. But, as far as the economy is concerned, people believe that IT is far more dynamic and telecom is seen as problematic. So, the glamorous sector is IT. Telecom is the one with all the challenges, problems and complexities. I was not sure what was in store, although I was lucky enough to do a small stint on the development side as the head of USO Fund and the BharatNet project. That helped me because the actual role of telecom secretary, apart from all this is a development goal, because, it is the backbone of infrastructure. It is not simply a backbone infrastructure! It is the backbone of the infrastructure, including all types of infrastructure. I think, even in India, we have passed an inflection point where, the flow of data has become absolutely critical for the national economy, for society, and for individuals.
With that development vision, I was able to have a complete view. My USOF stint certainly helped me. The second thing was, as I had done IT, and I knew that it may be really hard to achieve the goals of digital India without communications, as it was absolutely going to be key. Especially, up to three to four years ago, India really did not have the data revolution. Data was costly and inaccessible. The data evolution in India only happened in India because of telecom. And now I talk about 5G. At that time when I joined DoT, people were not aware about how important 5G and cyber security were going to be. Or, how important the social media platform is going to be? So, the vision really evolved over a period of time.
You were not just the first woman telecom secretary of India, but you took charge during an unusually challenging period. You came in at a time when the telecom sector was moving from phase 1 to phase 2. From voice, it was becoming services & data-centric. Can you identify the major achievements during this period?
Yes, that was quite a tumultuous period, for the entire telecom sector. It was a period of extreme disruption. This disruption happened simultaneously at several levels. The first thing was that the structure of the sector was going through a dramatic transformation — from a sector where there were too
many players, suddenly, it became a sector of three private players and one public sector player. The second thing was new, emerging technologies such as 4G and 5G. Even in 4G, India made a very rapid transition from 3G to 4G. So, huge up-gradation work was going on. Thirdly, in terms of telecom, it was becoming accessible in two ways. One, the networks were growing. Two, the smart phone penetration was increasing in such a big way. Basically, we saw computing and communications coming together during this period.
In terms of the achievement, we were able to bring out a robust policy, despite all this tumultuous phase, with the participation of all stakeholders. That was a big milestone. The second milestone was BharatNet — 50% of the Gram Panchayats (GPs) were under BharatNet. We could actually manage to put opticalfibre infrastructure. It’s a humunguously challenging project but people don’t realize it. Normally, if you are saying 250 000 villages and gram panchayats are being connected, you are talking about 250,000 infrastructure projects. Each one has some variation from the other. It’s a non-trivial project, in terms of the scale, scope, and challenge.
The third thing was that the high-level task force was able to give a very forwardlooking roadmap for the country. A lot of work was done for the ease of doing business. We didn’t have much time to talk about it, but there was significant amount of work on the spectrum side. A lot of spectrums were de-licensed, the licensing and the import norms were simplified tremendously. Automation was brought in a big way.
Lastly, the fact that all these M&As happened, maybe, not as fast we have wished, but the fact was that they all were successfully completed. Please remember that these are some of the biggest M&As in corporate India. They were smoothly done, despite the legal conflict. These were the main achievements.
Just before you retired, there were rumours that your tenure was going to be extended. What else, have you personally initiated if you would have some more time?
One of the things, in retrospect, I recognize is that digital communication is such a fundamental component of growth and development for India. This concerns not only the telecom department, which is driving it, but it should actually be the entire government that should drive it. The earlier ministry of IT used to go to different Govt Departments to request to get automated systems, digitisation etc. Now, it is other way around. Now, departments are reaching out to the MeiTY for things like upgradation, moving to cloud, get analytics, business process re-engineering. Something similar has to happen in the telecom sector.
Almost virtually all healthcare, agriculture etc., all of them, eventually, are going to be dependent on technology infusion. Technology infusion today means not just IT, it also means connectivity. Therefore, one key issue, I would have liked to work much more is how to have holistic thinking in the government, and how fundamental this infrastructure is. People believe that this mandate is the telecom sector’s responsibility. I however think this is far too fundamental, and this is what I wanted to work on.
The second thing is, I had mentioned lots of new ideas in the policy, like the National Digital Grid, the Fibre Authority etc. And more work on the spectrum. I would have liked to see more such things happenings during my period. Of course, it’s a work in progress. We were able to make a start. We need to do much more. Also, in terms of the structure of the telecom industry, people believe that the government has no role, except to receive the revenue. How can that be? For every other infrastructure, who is putting the money into the infrastructure? The government is putting it in. From the budget, what is the amount going in for telecom infrastructure? Hardly anything! On the other hand, we are receiving approximately 40 paise per rupee, earned by the telcos. Out of that 40 paise, we are spending only a little amount, but not all of it. That is something, India needs, because India is dependent on digital technology in a way that many countries are not. Because of the size of the country, the large population, the huge number of under-served people, IT and digital are huge growth engines. It’s not just a challenge! It’s an opportunity!! India emerged on the global stage because of the kind of the capabilities it was able to demonstrate on digital. Now, if we want to sustain, and have a leadership role, these technologies are absolutely core. Therefore, the government will have to continue to be in the forefront to invest in this sector and promote this sector.
“The second milestone was BharatNet — 50% of the Gram Panchayats (GPs) were under BharatNet. We could actually manage to put optical-fibre infrastructure. It’s a humunguously challenging project but people don’t realize it. Normally, if you are saying 250 000 villages and gram panchayats are being connected, you are talking about 250,000 infrastructure projects”
One of the things that previous government wanted was to try and get the IT and telecom ministries together. Is there something that can be done?
Logically, these two ministries will always have to go together. The access, the carriage, and the content have to always go together. Undoubtedly, these to have to work hand-in-hand! Now, how do you ensure the greater convergence between the two?
First of all, the fact that there is one common minister, which is a huge step forward. But, apart from that, for example, in 5G we had Meity, IT, and DST coming together. And now after the vision document the departments are working on technology roadmap that is common. In the report, one of the committees, that I happened to be a member of, the Committee of National Critical Infrastructure, we have spoken about convergence mechanisms. There can be a holistic view of ICTs data, going forward.
This convergence in my mind, will not just be these two departments, but, as data becomes more critical and central in our country, the entire sets of departments will use data. Many departments will have to play a role. For example, 5G is costly in India. It is not only for autonomous vehicles driven by 5G. One, it will be ultra-fast broadband. We may want to watch AR or 3D videos. Businesses and sector stakeholders will be looking to IoT. These are the key drivers. The other departments will also play a big role with IoT. For example, agriculture department, power department, or healthcare department! We will see every department playing a role.
Quality of service (QoS) in our country remains a big problem for the consumers. What’s your view on this, because when we talk to the policy makers, they say operators must handle this! Operators have their standard concerns and complains.
I fully agree that in our country we do not have the quality of service that we need. That has to be admitted that this is an area of weakness in the telecom sector. Two or three issues have contributed to it. One is that creating telecom infrastructure in India is still not easy, because of the challenges around right of way. That is not something, for which we should blame the telecom. Public authorities have to stop looking at telecom as the means of getting the revenue. Unless that fundamental change in mindset happens, we should not blame only the operator. That is one big issue. Second, the operators should take responsibility. We have tariffs, which is 1/10th of the global tariffs, whereas the cost of equipment is almost the same the world over. Spectrum costs are high here and in India, we are 80% dependent on the spectrum, unlike other countries, which have landlines and optical fibre.
The lower the tariffs, the lower will be the operators capability to invest on routine maintenance and operations, that is very critical for quality of service. Since they have been trying to optimize costs, the routine maintenance of the towers and the radios has suffered. The third reason is the very rapid pace of growth.
“I fully agree that in our country we do not have the quality of service that we need. That has to be admitted that this is an area of weakness in the telecom sector. Two or three issues have contributed to it”
“In the next 5 years, many different things will happen. I believe that 5G is a different league, where you will find many players coming in.”
Data has grown almost 80 times in a very short time. Every person is consuming nearly 8-9 GB data every month. It’s placing a heavy toll in the infrastructure. Actually, not only your voice call will suffer, the data quality will also suffer.
How long will this QoS problem last?
To get out of this situation, all three need to work together. The industry, the government, and the public authorities, all three have to work together and it’s not rocket science. It’s not that we don’t have the technology, or they are not efficient. People blame the telcos saying that they are only interested in making money. The responsibility should be shared more widely, and we have to work together to solve this problem. Otherwise, it’s not going away. We have tripled the number of towers.
Sometime back, we were actually establishing thousands of new towers every day. Even that is not enough, in comparison to the rate of traffic growth. There is no other parameter of infrastructure consumption in which we are miles ahead of China. We are normally behind a factor of 10. Here, we are consuming voice and data much more than China and at much cheaper cost. So, we will have to resolve this problem.
As the Industry grows and the expectations grow, are there any apprehensions in your mind regarding the future of the sector?
This sector is so critical that the push of technology will ensure your infrastructure is there. Technology giants are not going to say that India does not have the infrastructure, therefore, let’s get out of here. There is too much riding on this sector. There is relentless push for infrastructure. It may happen smoothly or may happen in more disruptive ways. And there is going to be more disruption going forward. People like Tesla, Amazon, etc., are now talking about Internet-in-the-sky. Please don’t forget that this sector has the nature of disruption. Many things can happen and data is going to become far too valuable. There will be investment. If it is not this set of investors, somebody else will. I don’t have apprehensions about the long-term growth, but many players may get hurt. It’s going to be a scenario where one can’t say they are there forever.
Do you sometimes feel there could possibly be a virtual monopoly in Indian telecom?
I don’t think it will get monopolistic, but for sure, there will not be 10 players. Big players dominate the world. We may not like it, but it’s a fact. Everything has become a platform and everything depends on the scale. Once you achieve a certain scale, you are bound to keep growing. If you don’t achieve a scale, you are bound to die. To some extent, it will happen in this sector too. There will not be a monopoly, but there will be 2-3 players. There will be different players for content, carriage, and converge. You can find different players being interested. Already, many of these platforms are investing heavily, even on the connectivity side.
One of the players was telling me about the network in the cloud, the network as a service. You just invest in the cloud and all your functionality of the network in the cloud comes in. We can’t really predict what will be the nature of the industry in future. This is a period of intense disruption. In the next 5 years, many different things will happen. I believe that 5G is a different league, where you will find many players coming in.
Have you ever had this feeling that we are pushed into 5G, because we have just got into 4G and are still trying to stabilise that?
Even the other day, I was having a discussion. One of the telcos said, we barely invested in 4G, so why should we want to go to 5G? What people forget that technology does not operate like that, technology is like water, it is relentless. You and I can’t stop this nature of technology. Because it will become so fundamentally critical, it doesn’t care whether you have invested. It is just a question of what functionality it can deliver. If something delivers greater functionality, then people will automatically go for it.
New business models will have to emerge if technology stands. You can decide to monetise in other ways. But it doesn’t mean that people will wait. People won’t wait today. When there are so many technologies of offer, who will say no to it. Technology is pushing and there is a demand pool from the customer side. Once these two converge, no force cannot stop it. India will have to get ready for 5G. It may take a little longer in villages and remote areas, but sooner or later, we will see 5G here.
Do you think there will be a commercial launch of 5G next year?
No, not by next year. By 2021, it will
“As it evolves, the Indian players are also ready for 5G. If you have a market of 700-800 million smartphones, almost all of them will go for 5G. There will be always be 20%, who will not be able to pay.”
be. If the auctions are conducted by the end of this year, you need one year for the networks to be ready. A lot of the 5G upgrade is software. It’s not as complicated as the traditional telecom. You won’t need to change every piece of hardware. Only, the up-gradation of software and the core network side. There will be segments that are willing to pay. As it evolves, the Indian players are also ready for 5G. If you have a market of 700800 million smartphones, almost all of them will go for 5G. There will be always be 20%, who will not be able to pay.
One of the questions, which is now if interest to the common citizens of India is about BSNL being critically sick. What is your recommendation for BSNL?
BSNL still have good brand equity. It has two primary problems, 4G spectrum and too much manpower. If these two issues are addressed, BSNL has enough assets to overcome the crisis.
Over and above what you have said so far, what would be your advise to the operators, the equipment vendors, and the government of India as well, to achieve the goals and targets of the National Digital Communications Policy of 2018?
To the operators, I would say India is a hyper- competitive market. It’s now, just the telecom, but you can virtually go into any sector. It is a hyper-competitive market. It is also a highly fragmented market. They will have to come up with strategies accordingly. The recommendation for the operators would be that you cannot have a play based exclusively on tariffs. You have to differentiate yourself in some other manner. That is something they have to figure out, and see that people are bundling content much more aggressively. These are the things that could have been thought of earlier. The fact is, it’s going to be a content-driven market. How much people are willing to pay for the pipe? The pipe is becoming completely commoditised. You can’t have a complete market strategy based only on the price. You have to look at what value-added services and what content you can provide. I don’t think the government can really do much here.
Overall, my recommendation on several occasions to the Government, and they would be the same, is that I would like to see more budgetary resources going into telecom infrastructure. I would like to see more enabling policy packages for the telecom equipment manufacturing. Then, we bring down our dependence on the others. I think it is even worthwhile giving the TSPs some kind of offset, like an offset policy, in case people manufacture domestically. Thirdly, the taxes!
Thirdly, to the equipment guys that they should stop looking at India as passive recipients. They used to charge whatever prices they wanted, but now they need to go beyond that. The TSPs should have their own technology vision. How can the operators owning the customer will work with the backend, with no visibility? A smarter set of players are supposed to come forward. The OEMs will have to look beyond, which deserves