[Reader-list] The Telecom 'Revolution' - All for the elite's sake?

[Zubair Faisal Abbasi]

Almost similar is the case with Pakistan and I am experiencing the arrogance
and torture of 'rich-man's business'. They are not even willing to think of
using IT for support of 'poor-man's business'. A very controversial (in the
moral sense) argument of making markets work for the poor and expanding the
consumer-base is thrown on the ground. The most torturous for me is the sad
demise of idealism or romanticism in our youths' outlook towards life.
People might have not been, in the past, interested in the advice and
practices of Gandhi and Sages, but they did not threw them in dust bin with
arrogance and abhorrence.  The youngsters of my age are doing it feverishly
and may be unknowingly as well. The Telecom Revolution and IT Revolution for
that matter is, in its present form, a persistent travel towards greed and
nauseating hatred towards the poor and the weak; I fear Nietzschean spirit
jostling through the apparently well-dressed and wealthy tycoon of IT
business persons. The harm, I see, is the madness which took Professor
Nietzsche ---- may take the social architecture of societies in its fold.
'Corrupt Sciences' ----- !

Zubair Faisal Abbasi
Islamabad, Pakistan

----- Original Message -----
From: "Harsh Kapoor" <aiindex at mnet.fr>
To: <reader-list at sarai.net>
Sent: Monday, January 07, 2002 2:27 PM
Subject: [Reader-list] The Telecom 'Revolution' - All for the elite's sake?


>
> The Praful Bidwai Column for the week beginning Jan 7
>
> The Telecom 'Revolution'
>
> All for the elite's sake?
>
> By Praful Bidwai
>
> It's nothing short of a "revolution", we were told when long-distance
> telephone rates in India were cut by unprecedented margins last
> month. First, the private cellular operators' alliance, IndiaOne,
> announced it was going to reduce mobile-to-mobile national
> long-distance (NLD) tariffs by 50 percent. The mobile handset, a
> trade-mark of the upwardly mobile Indian, was proclaimed to have
> become "downwardly mobile" as the "poor man's telephone". For a lot
> of people, who were wonder-struck by the five- to ten-fold decrease
> in the prices of fancy cellular handsets over the past four years,
> the prediction rang true.
>
> Private mobile telephony, it was said, would wrench India out of the
> cesspool of global telephone laggards, with an abysmally low telecom
> density of four lines per hundred people. India would soon join the
> league of the middle-level developing countries.
>
> Just days later, on December 28, the giant public sector Bharat
> Sanchar Nigam Ltd (BSNL) hit back with a whopping 60 percent-plus cut
> in its static telephone tariffs. A peak-time Mumbai-Delhi call will
> now cost only Rs 9 per minute, in place of Rs 24. A Delhi-Chandigarh
> or Hyderabad-Madras call will cost 59 percent less. This too was
> ecstatically welcomed as the greatest-ever "bonanza" for telephone
> subscribers. The pendulum had now swung from wireless telephony to
> terra firma--the good old land-based line.
>
> Nevertheless, "the consumer is king", proclaimed free-market
> enthusiasts, euphorically forecasting a 70 percent increase in
> long-distance dialling and hence NLD revenues, and eventually India's
> telephone connectivity. They predict the private sector will now be
> lured to invest in a big way not just in the mobile business, but
> even in basic telephony. Never mind that the "Information Technology
> Revolution" has lost some of its steam. Telephony will give it a
> boost; it could even provide another shortcut to rapid growth.
>
> The time has come to pour some wintry-cold water over the "telecom
> revolution" euphoria. The tariff cuts will of course be a bonanza for
> the top one-seventh of India's telecom consumers. But the cuts will
> slow down, not accelerate, overall telephone development. It is not
> hard to understand this apparent paradox. India's primary telephone
> system, comprising 35.4 million DoT (department of
> telecommunications) subscribers, relies on a system of
> cross-subsidies. It costs about Rs 25,000 to install a new telephone
> line, but you can buy one outright for a mere Rs 8,000 to 15,000, or
> rent one by depositing Rs 1,000-3,000 in the cities (Rs 500 in remote
> villages) and then paying a low monthly rent (varying from Rs 50 to a
> maximum Rs 250).
>
> DoT doesn't make up this difference through grants from the
> government--it pays handsome dividends to it--but generates it out of
> its NLD profits. NLD revenues account for about half the total
> revenue of Rs 25,000 crores earned by DoT subsidiaries, BSNL and MTNL
> (which is confined to Mumbai and Delhi). This is socially desirable
> and progressive, because it allows DoT to lay new lines in small
> towns and villages, and keep local call rates low. A good 40 percent
> of all DoT subscribers have "zero-calls" bills--i.e. are covered by
> the free calls allowance, because they use the telephone frugally.
>
> At the other end of the spectrum are high-use customers such as
> corporations, governments and rich individuals, totalling five
> million. These form only 15 percent of all subscribers, but yield
> three-fourths of DoT's revenue. Being relatively well-off or entitled
> to organised sector perquisites, they can afford to make frequent
> long-distance calls. It is only rational that they should subsidise
> the poorer subscribers in the short run. In the long run, they
> themselves benefit through increased connectivity, lower tariffs and
> improved service. This is a desirable subsidy. It is this mechanism
> that has allowed DoT to add 4.5 to 5 million new lines to the
> national network each year.
>
> At our present stage of telecom development, there is simply no
> substitute for a mechanism like this. Only five percent of all Indian
> homes are telephonically connected. This proportion is abysmally low.
> It represents an avoidable waste of social time and resources,
> including energy. Telecommunications growth entails real cost-saving
> through avoided physical movement. Growth of telephony is an
> essential component of contemporary economic development. To enable
> ordinary people to communicate via telephone lines, or through
> devices (like computers) linked to them, is to empower them. This was
> one rational major goal of the 1994 National Telecom Policy.
>
> The government has itself undermined the goal by allowing private
> operators to prey upon public networks, and by lowering long-distance
> tariffs. (For details, see this Column on Oct 20, 2000) It wrote off
> Rs 7,000 crores in fees payable by private companies. It has unfairly
> deprived DoT of Rs 3,000 crores. Making mobile phones cheaper solves
> little. Mobiles rarely represent a net addition to the network. Most
> of their owners are existing DoT subscribers.
>
> The beneficiaries of all these policies are less than 10 million
> individuals--in a country of 1,000 million. Private companies have
> provided just 4.2 lakh new lines (compared to DoT's 35 million). They
> indulge in cherry-picking: concentrating on super-rich clients who
> want value-added services, wholly ignoring the majority. Their rural
> connections total an appalling 300! They evade our already lax and
> scarcely-enforced service quality regulations. They are now illegally
> digging up roads and pavements to lay cables. Some have announced
> grandiose schemes. (The Tatas have a Rs. 3,500 crore investment plan
> for four circles, and Reliance and Bharti Telecom are getting into
> "broad-band" services, including "convergence"). But it is doubtful
> if these will see the light of day.
>
> In the past, private operators had grossly overestimated the likely
> rise in telecom demand and made bids for a ludicrously high Rs
> 160,000 crores. They won't be able to compete with DoT's low rates,
> but will nevertheless drive down its surplus from Rs 9,000 crores to
> Rs 3,000 crores. Rural telecom expansion will slow down. Equity will
> take a big hit.
>
> Equity has been one of the biggest losers from many of our recent
> economic policies and social practices. The elite, comprising less
> than five percent of the population, has been the biggest gainer.
> This class increasingly preys upon national resources, and returns
> little to the common pool. It has been the main beneficiary of the
> past decade's tax breaks and reduced imposts on consumer durables
> ranging from cars to air-conditioners. Its income has more than
> doubled in the past five years or so (for instance, thanks to the
> Fifth Pay Commission) although poverty has deepened in much of the
> country. The elite has developed a positive stake in the prevalence
> of low wages, child labour and economic serfdom.
>
> Having established its dominance at the macro level, this class is
> now aggressively taking over the public or common sphere--quite
> literally. All of our urban spaces are being reshaped to brazenly
> favour the property-owning elite. Thousands of crores are being spent
> on flyovers. Mumbai has 55 of these under construction, Delhi has 30,
> and Chennai has 18. These are tilted against public transport. The
> "beautification" drives launched in many cities further discriminate
> against the majority and pamper the elite. As if these were not
> enough, rich car-owners now monopolise whole pavements.
>
> Go to the average Delhi "colony", from Mayur Vihar to Punjabi Bagh,
> and see for yourself how every square yard of pavement space has
> become someone's private parking place. Disputes over "ownership" can
> lead to murder. City centres and public squares are being demolished
> to build shopping arcades and amusement parks from which the majority
> is excluded. Even green public spaces are "reserved" in many cities
> for those who can pay. Meanwhile, private clubs and golf courses are
> being built on public land. So are posh schools and hospitals.
>
> Our elite has fattened itself on entrenched hierarchies and
> discrimination, as well as subsidised education. But roughly 60,000
> of our brightest students go abroad each year even for non-specialist
> degrees that can be easily earned in India. It is hard to find a
> joint secretary to the government whose children are not studying
> abroad, or planning to. This would be bad enough even if it didn't
> represent a drain of resources. But it involves that too. The Reserve
> Bank turns a blind eye to this. And no one asks how an officer
> earning Rs 18,000 a month can finance his son/daughter's
> $30,000-a-year fees in America.
>
> This dualism is utterly repugnant--morally, socially and politically.
> It is corroding our democracy, and breeding a culture of arrogance
> and apathy among the privileged, and resentment among the majority.
> This is evident in our cities, with their lack of safety, growing
> crime, and widespread squalor. Stress in school and at home,
> aggression in the street, and insecurity in the workplace, have
> become common features of our daily lives. Not even the wealthiest
> are free from these. Ultimately, gaping inequalities and unaddressed
> injustices will catch up with everyone unless we radically change our
> policies. Or else, we may be doomed under the present Right-wing
> juggernaut to go the Argentinian way--towards economic collapse and
> social chaos.--end--
>
> _______________________________________________
> Reader-list mailing list
> Reader-list at sarai.net
> http://mail.sarai.net/mailman/listinfo/reader-list
>