Sanity after bloodbath
— Shantharaju BS
When three telecom operators, competing fiercely in the market place, came together to pool their resources and as well open the same resources to all the competitors defined the biggest shift in the telecom industry’s history in India. It was a huge leap of faith, none so far matched in the world on the same scale, to redefine the game of infrastructure sharing in telecom industry. This enabled them to expand their network very quickly and as well face the competition of new entrants starting in 2010.
My memory goes back to the days when I first got the mobile phone in mid 1990s paying a tariff of more than Rs 16 per minute. My first month bill was in excess of Rs 20,000 and I could only afford that luxury since it was paid by the company. Even being a CFO then, I could not afford that bill. Today, I pay less than Rs 1,000 a month and have unlimited call and data. Adjusted for inflation, it is less than 2% of the first bill my office paid. Today, daily labourers spend more money on a cup of tea than Rs six that they pay for using mobile with unlimited data and call.
Many forces have played in symphony to make mobile tariff a pittance, but telecom tower sharing is a big move that overshadows the rest. Three individuals - Akhil Gupta, Ashim Ghosh and Sanjeev Aga, empowered by their parent companies have played a big role both in conceiving and later executing such a massive shift in tower sharing concept. This called for a visionary mindset. But they were also fortunate to have had other leaders in three organizations to support this move though the journey was arduous and ambiguous with unintended consequences.
Practically as a first CEO of Indus Tower, I have seen many plays from different lenses—as truly independent entity to give same services to all operators in a non discriminatory manner. When one opens up more than 100,000 towers to all the players on non-discriminatory way, the entire sector blossomed. New operators entered the market with speed and reduced the tariff since the capex involved to roll out the passive infrastructure is practically nil. Large capex is converted into opex allowing the capital to be invested in more roll outs.
This had unintended consequences: the market became overcrowded with too many players, making it very fragmented. Tariffs started reaching the economically unviable level. But customers became the king. The market blossomed to a level with more than10 million customers added every month. This transformed mobile telephony as the essential part of common citizen’s daily life. Indus Tower alone started experiencing the traffic of more than 600 million subscribers multiple times every day. I always said in many forums that there is no pride in saying that Indian tariffs were lower than Sub Saharan Africa tariff. Such low tariffs will not enable operators to invest money in the better service. Volumes alone cannot give you enough profitability to give better service to the customer. All weak players have seen natural death with mindless tariff levels.
Consumers have experienced the bad service level with poor network. As consumer, you get what you pay for. The recent tariff hike is a step in the right direction. Even with recent tariff hike, the telecom tariff for a day will be lower than a cup of tea. I believe some rational behaviour will always play in the market when bloodbath is over. Hopefully consumers will see a better service from all the operators.