An Analysis

15th August 1997 marked the 50th anniversary of India's Independence from British hegemony. Telecommunications have played a critical role in shaping India's march towards progress and the importance they hold for the future of India cannot be overstated. Telecommunication Services were introduced in India soon after their invention in late 19th century by the British, not for meeting any socio-economic objectives but with the purpose of meeting the requirements of the government in matter of defense, law and order, general administration and revenue collection.

The national investment in telecom in the first six five-year Plans since 1950 hovered between 1.4 and 2.7 percent of the Gross Domestic Product (GDP). Only after 1985 did things start looking up for telecom, with the investments jumping up to 3.6 percent of GDP in the Seventh Plan (1985-90) and 11.9 percent in the Eighth Plan (1992-97). The Ninth Five Year Plan has a plan of 13percent of GDP to be invested on the Telecommunications Infrastructure. In 1989 the Telecom Research Center (TRC) formulated some guidelines for Rural Telecom Sector with plans to implement a phone in every village till 1999. With the opening up of the economy in 1991 the sudden requirements for telecommunications changed and the plans were redrafted in 1994 through the National Telecom Policy. The new National Telecommunications Policy (NTP) announced in 1994 anticipates an expansion of ten million lines to a total base of almost 16 million within the eigth five-year plan which ended in March 1997. The plan also called for all 0.6 million Indian villages to be connected to the telephone network by 1997 - until now, only about one-third have had a telephone. In addition, the aim was to achieve an average density of at least 2.5 lines per 100 people by the year 2000 for the Rural Sector. The world average is 10 per 100 people. Presently India has 21,328 Telephone Exchanges with a capacity of 15.1 million lines. The network is growing at an enormous rate of 21.6%. One-fourth of the total capacity is installed in the four metropolitan cities of Delhi, Bombay, Calcutta and Madras.

It has been reported in the press that the Department of Telecommunications (DoT) has formulated its perspective plan for telecommunications from 1997 through 2007. This is the first perspective plan after 1994's Telecom Policy, and follows the earlier one drawn up in 1989 for the period 1990-2000. DoT will introduce ISDN (Integrated Services Digital Network -a communications standard that covers voice, data and image services) up to all district head-quarters by 2007. But before that, it will start introducing IN (Intelligent Network-services from 1997 in all towns with a population above 0.5 million. DoT will also introduce voice response and recognition services by 1997, and several multimedia services such as video-on-demand, remote diagnostics and interactive tele-education by 2000. Under the Ninth five-year Plan a number of new initiatives like introduction of Package Tendering and Solar Battery systems, instructions to all the circles to have Annual Maintenance Service contracts, setting up MARR repair center have been introduced to provide Village Public Telephones (VPTs) to all villages. Today in rural areas the economy is much lower than that in urban areas, the telephone traffic is mainly confined to villages that are close by or to villages within the same telecom center itself. It is obvious therefore that unless and until telephone service is made available in all the villages, it is difficult to expect higher calling rates and better traffic loading. Long distance call revenues are less and hence phones are far less to justify the provision of rural telephone service and consequently the service has to be subsidized. This is a heavy burden on the exchequer.

Primary reasons for more active Government Role in Rural Telecommunications Policy:

1) New rural economic development requires a reliable infrastructure of enhanced telecommunications. Participation by rural and poor segments of society in the information economy should be a strategic priority both for social and economic development reasons.

2) Special transition policies are a fair way to help Rural India adjust to the new telecommunications marketplace.

3) Rural residents deserve an equal opportunity to participate in the national economy and determine their own destiny. Particular emphasis should be given to the role of telecommunications technology in enabling rural citizens to integrate effectively in the Indian economy and then the new Global Economy.

4) Successful systems require not just appropriate technology but primarily that all other elements - policies, people, processes, incentives, institutions, and infrastructure - are present and work well. This is possible only under the guidance of a regulatory authority of the Government e.g. TRAI (Telecom Regulatory Authority of India).

Privatization of Basic Telecom Sector

Achieving the target of giving telephone on demand by 1997 would thus imply releasing about 10 million connections during the VIII Plan as against the existing target of 7.5 million. Release of 2.5 million additional lines alone would require extra resources to the tune of $ 3.175 Billion at a unit cost of $1162 per line at 1993-94 prices. To this must be added the requirement on account of additional rural connections of $ 1.081 billion. Even with the comparatively modest targets of the VIII Plan, as originally fixed, there is a resource gap of $ 2.027 billion. The additional resources required to achieve the revised targets would be well over $ 6.216 billion. Clearly this is beyond the capacity of Government funding and internal generation of resources. Private investment and association of the private sector would be needed in a big way to bridge the resource gap. Reforms and investments are possible by placing primary responsibility for investment and service provision with the private sector and by placing sector planning and regulation responsibility with the government (e.g. TRAI). An example of this is The Asian Development Bank Loan for Rural telecommunications in Eastern Uttar Pradesh where executing agency is Department of Telecommunications(DoT) with the borrower being India.

The Basic telecom services which are to be privatized are being bid for by Multi-National Companies (MNC) which have seen the lucrative market of 200 million middle class population of India resident in about 300 cities and about 4500 towns but what about the rural sector consisting of about 0.6 million villages!. The bid held in 1994 had no companies bid for the telecom circle in Assam, North Eastern States, Andaman and Nicobar , Jammu & Kashmir and Himachal Pradesh. Whether it was the Naxalites or the terrain these areas still carry no commercial value for these companies and this is what the Government of India has to prevent from happening. All the sectors whether in difficult terrain, rural, or urban should get an equal opportunity for development. (Figure 1 showing Telecom Infrastructure distribution)

Universal Service obligation is an important aspect of the Privatization of Telecom Sector. Extension of telephonic networks to the rural areas is a very important perquisite. This has been done through levy of an appropriate tax or by making the new entrants compensate the dominant carrier for meeting the liability towards universal service obligation. In Latin American countries like Mexico innovative steps have been taken to insure that the universal service obligation is met. Private parties have been given the responsibility to extend the telephonic network to rural areas by giving the incentive of access to long distance and international traffic. In Chile a separate fund has been created for compensating the parties which have accepted the challenge of providing rural telephonic network.

Universal service obligations have been made a part and parcel of tender conditions in Indonesia and India. In January 1995 for the first time open tenders were invited for award of licenses for providing basic telecom services. Licenses are for 15 years with the provision of renewal for 10 years at a time on a mutually agreed basis. India has been divided into Telecom Circles according to three categories A, B and C for best market, medium sized market and smallest market respectively(Figure 2 showing present status of VPTs in the various Categories). One private operator is to be licensed in each of the telecom circles into which the country is divided. Under the License agreement the private operators have to provide 10% Direct Exchange Lines (DELs) as Village Public Telephones(VPT). The first basic telecom circle will be operational from Nov. 1997 under Bharti Telnet in Madhya Pradesh and 11% of the lines being installed in this phase would be for the rural sector. The next one is likely to be Gujrat .Presently some of the bids are under a controversy and unless more agreements are signed with private operators and DoT takes time-bound actions ,the target for VPTs will never be reached.

Outline of the Role of Private Sector in Rural Telecommunication Development:

Rural Telecom Policies

 DOT (Department of Telecommunications) along with C-DOT (Center for Department of Telematics) has till date provided telephone connections to about 0.2 million villages up till now and a lot still needs to be done. The DOT has various policy plans for the rural Telecom sector like

1)North East Region(NE Region) Plan for north eastern states: The NE Region consists of the following states Assam, Arunachal Pradesh, Meghalaya, Manipur, Mizoram, Nagaland, Tripura. The North Eastern States are located on a mountainous terrain they are in most need of proper communication facilities. The DoT is giving special attention to the rapid development of Telecom facilities in the NE Region of India. As a matter of policy only modern technology equipment are being inducted into in this region.

2)Tribal Sub-Plan(TSP) with the 20 point program: This plan was developed for all round and faster development of Telecom facilities in tribal areas. It was started in 1989 and integrated with the 8th Five Year Plan. Its main objectives are:

3)Asian Development Bank Project: This project is for Rural Telecommunications Infrastructure in Eastern Uttar Pradesh. In November 1996 , The Asian Development Bank sanctioned a Loan of US$113 million for providing 50,000 Public Call Office (PCOs) to unserved villages, rural growth centers, and other rural towns in the areas covered by the eastern Uttar Pradesh State Circle in which the executing agency is Department of Telecommunications(DoT) with the borrower being India. A Public Call Office(PCO) is a Telephone Booth sublet to a shopkeeper in the area which can be utilized by the villagers for local and long distance calls on a chargeable basis.

 Technology for Rural Sector

The TRC had suggested various Techno-Econ products, which could be used for the rural sector like

1)Optical Fibers: Use of Optical fibers as a communication highway from one metropolitan to another for faster communications can be of use to rural communications wherein one can connect an intermediate station to the main highway by branch routes and drop and insert systems. The enroute intermediate stations can be used as Collection centers for the Village Telephones(VT) distributed all around up to a distance of 10-15 kms or even 40 kms. A 2 fiber optical fiber cables with slotted FRP central strength member housing the fiber is a technical and economical solution for Rural Environment. Light Emitting Diodes(LED's) which are cheaper but have limitations of high spectra width and low launch power , can be used effectively in the rural scenario due to the limited requirement of channels in the rural sector.

2) Rural Cordless Telephone(RCT): The Rural Cordless Telephone is a simple and inexpensive equipment that can be put to use in some of the Rural Areas where the villages are very much dispersed and the terrain is rather difficult. In such areas one cordless telephone in each village will serve the purpose and an equal no. of trans-receivers should be provided at the base station i.e. , the telephone exchange. The no. of VTs in an exchange local area will be limited by the frequency available and the distance will be limited by the power, terrain and topography.

3) Radio Sharing System(RSS) This is a radio frequency sharing system with two frequency pairs serving 15 Village Telephones. The ratio of VT to radio Channels is 7.5.Even though the system is defined as 2 radio Channels for 15 VT's , there is built in expandability for 2 radio channels up to 32 VT's , if actual traffic density is lower .All VTs connected to the RSS have individual line terminations in the telephone exchange.

4) Line Sharing System(LSS): A metallic pair passing via a no. of villages can be used on "line sharing" basis providing telephone connections to every village on the route .The common pair serving as an Omnibus Telephone Line(OTL) is different from parallel connection of telephones on a line. The system provide for termination of all the VTs on a manual trunk switch board with individual station designations for every VT. Every VT retains its individual identity and therefore can be called selectively from any place. Based on the method of choosing individual tone frequencies assigned for identification to each VT and providing appropriate tone detectors.

Basic reason for using Radio systems over Line Systems for Rural Sector:

Multi Access Radio Relay( MARRs) is a very Techno-Economic solution for Rural Sector. Though planned to be implemented in a huge manner under the 1989 telecom Policy the plans have not kept pace because of bureaucratic hassles , manufacturing defects and inability of suppliers to arrange for lease financing . This is still one of the main technologies being used for the Rural sector because of the ease of maintenance ,installation and future expansion possibilities. The Wireless in Local Loop(WILL) transmission equipment as forecast by Frost & Sullivan to eventually constitute nearly 30 percent of all new lines added. WILL technology will assist in more rapid installation of the network and is ideal for both urban and rural areas. Very Small Aperture Terminal (VSAT) satellite systems and Low Earth Orbiting Systems (LEOs) are also being touted as intriguing technological solution for Rural Telecommunications. No one technology will satisfy the demands of rural telecommunications. Different technologies will be more or less appropriate based on specific circumstances, and it is most likely that a mix of these technologies will provide the ultimate solution.

 Guidelines for Rural Telecom Sector Policy

Combined Strategy to be followed by the Government in collaboration with the Private Sector for the Rural Sector:

 Identification of coalitions or interest groups in the rural communities involved in community development activities.

 Information technology, when designed for the right job, can be deployed even in regions that lack adequate water, food, and power. This technology can be effective for many tasks, not least human and economic development. In fact, this technology is often indispensable in meeting basic needs. While the information revolution may threaten to increase inequity, but it also provides tools to reduce poverty. A pro-poor agenda of technology-improved access to education, health care, and information is increasingly possible for the rural sector in India, which is a developing country.

 The Rural Sector plays a very important role for the balanced growth of our country and as found out by a survey that every single effect in the telecom sector has a six-fold effect on the economy of the India. To achieve sustainable development it is essential that people away from the capital city, representing the bulk of society, are given the opportunity to participate in and benefit from the global information revolution, even if in only the most basic ways.

Some of the immediate and discernible advantages that improved telecommunications in rural areas would bring are:

It is because of these wide-ranging and vital benefits that telecommunications service provision in currently rural areas should be at the forefront of any discussion on telecommunications development in India.

The final solution to providing service to rural areas in India will require a delicate blend of appropriate technological choices in combination with management and financing mechanisms, initiated at the governmental level, to support the development of rural providers. Hence no time should be wasted in going ahead with the proposed plans.

"Information is critical to the social and economic activities that comprise the development process. Telecommunications, as a means of sharing information, is not simply a connection between people, but a link in the chain of the development process itself." [Hudson 1995]

Abhinav Taneja

Electronics and Communication Engineering (Senior Year)

Delhi College of Engineering (University of Delhi), New Delhi.

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