Tuesday, December 06, 2005


The Telecom Platter

Telecommunication services in India have evolved since independence till the recent liberalisation in a predictable fashion:

  1. Find what technologies and services have been created elsewhere.

  2. Find an agency which will transfer the technology to India at terms defined by the transferring agency

  3. Await in anticipation for the next technology to evolve elsewhere. Repeat step above.

Post liberalisation, an element of competitive urgency has been introduced.In addition, step 2 has been refined where the Indian agency is able to negotiate from a position of strength derived from the huge market opportunities in India. However, step 1 and 3 above continues to hold true: All telecom infrastructure, standards, switches, equipment, and terminal devices (with the exceptions of the land line telephone and the C-DOT technologies) are the results of innovations elsewhere.

A survey of the current scenario, including the ongoing and projected plans of major players in the sector indicates that the competitive edge is being equated with the ability to bring in the most (recent and sometimes not recent) technology and service from elsewhere. Examples are, the EDGE technology, Blackberry, PTT, MS Office on mobile phones, MMS, downloadable games. Huge investments in fiber, broadband to home, etc., have been committed with the hope that services which have shown promise elsewhere will bring in the revenues to justify the investment in the infrastructure.

While Indian telcos are spending all their energies in deploying these technologies and in attempting to make these generate return on the investments, the global technology leaders are innovating the next generation of technologies and services for their environment and these will be the future objects of clamour from Indian companies.

All the Indian telcos are competing with each other, investing enormous capital in building the network infrastructure, and spending large amounts in marketing and distribution. Continuation of this activity over the next decade will create a massive customer base of several hundred million. In effect, the second largest customer base in the world is being created and handed on a platter to worldwide technology companies like Nokia, Samsung, Nortel and LG. Not a single technology relating to mobile telephony is owned by any Indian entity.

Today there is an opportunity to break out of this perpetual self-locking cycle; by investing in deploying the next generation of services to the potentially vast Indian market, establishing leadership, and in the process create new technologies and devices that will help cement the leadership. The key here is to focus on sustainable, revenue-generating services that are suitable for the Indian market first and working down to the technologies that are needed to offer these services. This is in direct contrast to the current model of fixing on technologies based on availability and figuring out what services can be offered to generate revenue from the technologies that have been licensed.

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