Talking about idiocies in the Indian Telecom scene
March 22nd, 2005 Leave a comment Visited 51 times, 1 so far today
Talking about idiocies in the Indian Telecom scene
There have been idiocies enough in the Indian Telecom scene. I came across an article by Sunil Jain in Business Standard, which mentioned the indirect costs Reliance Infocomm had to pay out to roll out their services. One parting shot was that he had raised questions over the quality of managerial advice that these companies get.
In case of Reliance it is clear that they assumed, and wrongly though, that they could get away with anything. The fact is that other operators, feeling cheated, did not take it lightly enough the attempts by Reliance to rough shod them. The recent TRAI order over the Fixed Wireless Phones has to be seen in this light. However, it is more right to say that they too were mislead over the same! It is not feasible to fix a wireless phone at a permanent place and in all probability would be appealed in TDSAT.
Airtel leads the pack in goofing up most of the times. First, they gave their network away. In my opinion, Network is sacrosanct. Airtel did not do the right thing to give it away to third party in this case. In the name of cost cutting and savings, it does sound good, yet what has been scaled up after so much deliberation is asinine. Yet it is for them to evaluate the pros and cons of the same.
The recent advertisement by Airtel to meet the super stars Shah Rukh and Sachin again seems to deflect the attention from more pressing problems. Airtel could not win any circle in the recent bid to expand to rural areas and in any case, they would have to do it from their own funds or so it appears to be. Their quality of network is pathetic, again based on the customer feedback; in the recent TRAI quality norms, they were nowhere in contention barring a few circles.
I believe that marketing managers ought to get in the hibernation and let the quality of service be improved. Of course, it points to the crisis in the low average revenue per user collections; the gimmicks are clearly for increasing the number of calls. I am happy that Airtel is lucky enough to have few star struck subscribers who would happily do its biding. How this drains out their pockets is another matter though.
I read a recent article by J Mulraj in Times of India who had talked of the “happy times in Indian Telecom industryâ€. Well, it is a different matter altogether that it remains extremely low on the credibility index. Yet, good enough for the people who have no idea about the way this industry works. If privatization is so good, well then the real telecom revolution has missed most of the populace.
I have had a frustrating experience trying to get VSNL in my hometown. When it does happen, there would be no holds barred story. Promise. For the time being, these antics just reinforce my belief that telecom revolution appears rosy in the metros; given the large captive audience, it is easier to ramp up margins and volumes. Also to do gimmicks with the superstars.
Why celebrity endorsements for “lifestyle products� This defies explanation. I had tried to analyze the Advertising trends in the industry earlier, but clearly, I could not come to definite conclusions. In this regard, Reliance has had a very low-key advertising. Yet the icing on the cake is BSNL. Once again, it reinforces the fact that whoever thought of the advertisement and got it executed through lowest tender must be really high up or indulging in favoritism!
It shows a developing child with an umbilical cord. The next scene shifts to a growing child and a telephone plugged in the socket with a wire. Whatever I could make of it was that telephones are somehow related to conception! At this point, it was so. Then they show the same lady calling up her son who is working on a laptop. The camera focuses on the telephone with the wire again superimposed with the picture of the developing child with the umbilical cord. With a crappy background score, the logo of BSNL gets splashed saying “Connecting Indiaâ€. If the foregoing account made no sense to you, it does not to me either! I narrated the advertisement as it happened. Another instance of taxpayers’ money going down the drain.
Finally, it is the Access Deficit Charge regime. For years, after it has been introduced, ADC remains a drain on the telecom companies’ earnings. Indirectly on to us. If any Hutch subscriber does not own a BSNL landline, he/she is subsiding the cost for the ones who do. If this is unfair, the persistence with the same is idiocy too. In the idealized world, the ADC should go. In turn, it would expose the companies to the market play and bring the call prices further. In terms of purchasing parity, we still have high call rates. There is enough scope to reduce the same. Why tax telecom equipment? I argue on these grounds because the IT industry is untaxed. It has not benefited the country except for privileged few. This is debatable indeed but has created distortions in the local economy wherever the IT companies have set up shop.
In any case, Infosys is happy serving its shareholders and the foreign companies rather than the local populace.
Last but not the least is the number portability across the networks. The present scenario gives no indication about the quality of services or the number of customers a telecom company has. Airtel has dubious track record in the same as I had mentioned earlier in the same columns. Retaining the same number across the networks would give a real power to the customer. I believe that the regulator has floated this idea but it is finding itself handicapped over the implementation of the same.
The idiocies of Indian Telecom indeed.
Discuss on: Sify Broadband, Tata Indicom, Airtel Broadband, Reliance Broadband, MTNL – BSNL Broadband, Dial Up, Others
This post was submitted by Dr. Abhishek Puri on the Broadband Blog on Techwhack.
Airtel, BSNL, General Thoughts, Indian Telecom, MTNL, Reliance, Sify Broadband, Tata
Abhishek
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March 23rd, 2005 at 12:36 am
BSNL is not drawning tax payers money.it is a separate company owned by the government.
the government doesnot pay any thing to it.
it pays the following things to the govt. and the public.
1.spectrum charges.
2.license fee.
3.dividend to shares owned by govt. of India(100% shares)
4.pension to the employees retired from DoT(Dept. Of Telecom),ie
those retired before formation of BSNL.
5.Serve the loss making rural ares of the country
as a social obligation.where as its profit share is eaten by
private companies in urban areas with which BSNL manged to
fund the loss making service of Rural INDIA.
6.it has the lowest tariff in all the services.
which keeps the other privete operators at lower rates
inorder to keep themselves in market.
7.it is one of the major employer to lacks of employees.
there are faults,incompatibilities due to its huge size,diversity in services,portion of untrained staff and govt. of indias out dated recruiting policies.but sure,BSNL is an “UNSUNG HERO”.
March 23rd, 2005 at 12:06 pm
BSNL is not drawning tax payers money.it is a separate company owned by the government.
the government doesnot pay any thing to it.
it pays the following things to the govt. and the public.
1.spectrum charges.
2.license fee.
3.dividend to shares owned by govt. of India(100% shares)
4.pension to the employees retired from DoT(Dept. Of Telecom),ie
those retired before formation of BSNL.
5.Serve the loss making rural ares of the country
as a social obligation.where as its profit share is eaten by
private companies in urban areas with which BSNL manged to
fund the loss making service of Rural INDIA.
6.it has the lowest tariff in all the services.
which keeps the other privete operators at lower rates
inorder to keep themselves in market.
7.it is one of the major employer to lacks of employees.
there are faults,incompatibilities due to its huge size,diversity in services,portion of untrained staff and govt. of indias out dated recruiting policies.but sure,BSNL is an “UNSUNG HERO”.
January 17th, 2006 at 09:55 am
It would be good if you substantiated your claims with actual references, rather than just links to the publisher.
As to your claims:
1. Reliance never was the best of companies — and they always did try to get away with everthing (like a lot of companies in India). Only this time, they failed.
2. “Giving away the network” is not a bad thing in and of itself. Badly managing a unified network resource is the problem, one which is EASILY technically solved (provided you have competent enough engineers and non-intrusive management — I'll intentionally _not_ use the word intelligent)
3. Whats wrong with using celebrities in ads? Everyone does it — if the celebrities endorse it, it must be good (aka the Govinda getting elected syndrome). Similarly, how did you draw a correlation between the phone line and CONCEPTION? Birth maybe, but conception? come on!
4. Access Deficit Charge: I was talking to someone recently, who said that we should just pay whatever is the percieved value of a telephone connection to rural areas, and not provide telephone service there. Your argument is similar — namely that ADC is a burden imposed on non-BSNL users. Guess what — ADC is also imposed on URBAN BSNL SUBSCRIBERS and *ALL* (including BSNL) mobile subscribers. ADC is meant to fund BSNL's rural telecom operations, and not “reduce competition in urban areas”.
5. Where / How the *#!& does Infy come into the picture? and if Infy does, so do _MOST_ other software companies in the indian “silicon valley” which serve US/EU customers and not indian ones.
6. Number portability is a fairly new concept, so given the above idiocies (in your own words) is it really fair to expect a successful number portability implementation from a bunch of idiots?
Was your post supposed to be intelligent? doesn't seem that way, at least from its content …
And no, I don't have a blog. See http://maddox.xmission.com/c.cgi?u=banish
January 17th, 2006 at 09:25 pm
It would be good if you substantiated your claims with actual references, rather than just links to the publisher.
As to your claims:
1. Reliance never was the best of companies — and they always did try to get away with everthing (like a lot of companies in India). Only this time, they failed.
2. “Giving away the network” is not a bad thing in and of itself. Badly managing a unified network resource is the problem, one which is EASILY technically solved (provided you have competent enough engineers and non-intrusive management — I’ll intentionally _not_ use the word intelligent)
3. Whats wrong with using celebrities in ads? Everyone does it — if the celebrities endorse it, it must be good (aka the Govinda getting elected syndrome). Similarly, how did you draw a correlation between the phone line and CONCEPTION? Birth maybe, but conception? come on!
4. Access Deficit Charge: I was talking to someone recently, who said that we should just pay whatever is the percieved value of a telephone connection to rural areas, and not provide telephone service there. Your argument is similar — namely that ADC is a burden imposed on non-BSNL users. Guess what — ADC is also imposed on URBAN BSNL SUBSCRIBERS and *ALL* (including BSNL) mobile subscribers. ADC is meant to fund BSNL’s rural telecom operations, and not “reduce competition in urban areas”.
5. Where / How the *#!& does Infy come into the picture? and if Infy does, so do _MOST_ other software companies in the indian “silicon valley” which serve US/EU customers and not indian ones.
6. Number portability is a fairly new concept, so given the above idiocies (in your own words) is it really fair to expect a successful number portability implementation from a bunch of idiots?
Was your post supposed to be intelligent? doesn’t seem that way, at least from its content …
And no, I don’t have a blog. See http://maddox.xmission.com/c.cgi?u=banish