Future of telecom industry

Abstract

The era of liberalization, which started 1991, has focused on reducing intervention of the government and to allow market to achieve efficiency on its own. This approach worked very nicely in the earlier phases. Later it was realized that all sectors of economy can’t be left to market forces alone, specially infrastructure. The telecom industry is partly infrastructure and partly utility. At the same time these services are partly public and partly private good. There is difference in rural areas and urban areas and deserve different treatments. With these distinctions in mind each part such as Data & Service Layer, Developed & Undeveloped markets, has been proposed with a unique policy approach. Effort has been made to find out ailing sections of the industry, reasons thereof and accordingly solutions have been proposed to make them efficient. The sources of inefficiencies have been identified and solutions have been designed to remove these inefficiencies to arrange a win-win situation for all stakeholders. While designing solutions the structure of the industry both from technical angle and economic angle was studied. Problems being faced by industry and various stakeholders leading to few core problems were identified. It was found that there is wastage in data layer and market is non- innovative in the service layer. Both these factors together have compounded the problems of the industry. There is need of wider coverage and innovation. Wider coverage comes from reducing wastage as well as active government support and regulation. Wastage can be reduced by monopoly or sharing. Other methods are unbundling of state companies or subjecting two layers of the industry to market forces independently. In the process we need to develop supporting industries and include state governments also. ICT industries and governments are the biggest users of telecom industry and their requirement is rising day by day. To accommodate their requirement, both layers of the industry should be adequately packed with capacity and products. On the other hand, rural operations need different treatments. Poor market conditions are further accentuated due to migration of rural population to bigger cities in search of employment and unavailability of affordable gadgets. There is need of support from manufacturing industry also. They should innovate and invest in R&D to reduce dependence on imports. Manufacturing industry is a key player to make the industry vibrant. The complexity of requirements of different stakeholders, the structure of the network and the industry demands matching regulation. A knee-jerk approach is not expected, and it should have a long-term vision of shaping the industry so that aspirations of industry, society and the country are satisfied. If such an approach is adopted, multiple fees being collected from the operators becomes a secondary issue and shaping the “Future of the Telcom Industry” becomes primary.