Tags: Airtel, BSNL, MTNL, Reliance, Tata

How Indian Telecom is being subverted

Foreign Direct Investment seems to be manna from heaven in India. I had agree to an extent about the inflow of money in this country; not in crucial sectors of Telecom. I held this view long time back and still hold it now too.

Over the past 2 days, there has been a quiet tectonic shift in the Indian Telecom; I have yet to see its condemnation. First, Maran insists that Access Deficit Charge (ADC) should stay on to subsidies BSNL for rural operations I fail to understand as to how this is actually helping the growth of telecom. In any case, it is a sheer fallacy that BSNL is increasing its wire line infrastructure in the rural areas. Buoyed by increased demand for mobile and CDMA services, it is being congested. Hence, the perceived benefits of affordable telephony are simply missing.

Further, Broadband would remain a pipe dream and a whole generation would grow up with a digital divide. This is not in the best interests of the nation.

Now, the juvenile fascination with merger between MTNL and BSNL. Why don’t they leave these two companies alone? In any case, we have had to suffer them for years together. “Synergies” would only double the misery. Period. More than that, it may be a prelude to selling them en blocks since either alone it would not make a good selling proposition to any “foreign buyer”. Do not get me wrong here. I’d still hold that it is an attempt to subvert our crucial infrastructure.

A significant development this week; Singtel upped its investment in Airtel. I had earlier mentioned that Singapore based companies remained a front for Chinese to enter India through backdoor. This is indeed a graver security threat; any economist would know. I have no idea as to why BSNL persisted with Huawei modems and not anyone else. Why patronize the Chinese and not spur on development in India for the same?

What is more disturbing here is the typical PRO speaks here. It says and I quote,” We believe that SingTel’s increase in the stake is an expression of confidence in India,” said New Delhi-based Bharti Tele-Ventures.

Overall, I’d still hold that Indian Telecom party has lot to achieve on its own rather than stand on the crutches of foreign funds. It is debatable. Still wondering. Reliance and Tata’s have considerable presence in India- we do not get to hear much on that front. Why Bharti and their ilk are diluting their stakes in their own infrastructure?

This post was submitted by Dr. Abhishek Puri on the Broadband Blog on Techwhack.