Rohan Samarajiva is in Pakistan. Near the border, once marked by Mountbatten’s sharp knife, his cell phone links him to India. Airlines do not understand this proximity. Indian participants, to Expert Forum Meeting jointly organized by LIRNEasia and Pakistan Regulator, first travel led west (3 hours to Dubai) and then east (another 3 hours) to cover 678 km between Islamabad and Delhi – a one hour flight if existed.

In the backdrop of Thimpu SAARC summit Rohan asks the same question he has been asking for sometime. (But this time in Bangladesh media): Can’t telecom bring these South Asian cities closer? Should they remain artificially distanced?   

Read the article here.

75% of passenger transport is via public transport and of that 93% by bus and 7% by train. Roughly 5500 SLCTB and 18000 private buses. The fare is regulated by National Transport Commission (NTC). They also have timetables which are n0t implemented.

Shortest distance (~2KM) LKR 6:00.

Longest distance 260 KM – LKR 655.00.

Most of the BOP uses bus transport. 36% of the BOP use mobile and fixed phones.

SLTB buses use both ticket books and manual ticket machines to issue tickets to commuters

Private buses primarily use digital ticketing machines that prints out tickets. Can store data, process memory. Can even tell you how may people have to get off at the next bus stop.  The one in use now is also lighter in weight.

These are mainly used in the Western Province and on a few inter provincial buses.  Manual ticket machines are used in other areas.

Issues with the current ticketting system:

Money lost in Transit. Bus conductors and Drivers take the money, or tickets are not issued, or passengers do not buy the tickets. CTB estimates a 15% loss of revenue and private bus owners 25%.

Chanuka: How is the estimates done?

RS: through Load share.

HdS: Bus owners want to reduce leakage.  They wold like to issue a e-bus tickets. So the solution is either a card system or a mobile. So from the suply side there is a need but what about the demand side?

A  simple survey was done at the Fort railway station. Not a Sample survey but to get an idea. 2/3: 1/3 male: female. There maybe selection bias as it is a starting point.

What is the real cost of a ticket? Do the passengers receive the balance after getting a ticket? only 5% said that they always get there balance. Most people carry exact change. And only 50% of the people receive a bus ticket. Ticket checkers are used both in public and private sector. Some private companies have their own people to check for tickets.

So because of these issues, there is a need.

Possible benefits of e-tickets:

For Bus operators

• reduce leakage
• Offer loyalty plans etc.

For Commuters

• Cost only actual fare
• Can better schedule travel; save on transport expenditure

State [local government]

• Tax collection
• Target subsidies

What are the options?

Contactless smart cards: Oyster, ez link. Delhi is running a pilot, minimum reload INR 25.

Mobile phones: either through SMS or Near field Communication (NFC) merging mobile phones with a contactless smart card (Innovation).

NFC mobile phones: Nokia introduced the first in 2005 (3220). Break through innovation is instead of a NFC  phone, what about an NFC SIM. China Telecom has come p with a NON NFC standard RF SIM.  Nokia 6216: First NFC standard SIM compatible. Operator can load application.

Japan is leader with NTT DoComo Osaifu-Keitai e-wallet phones. Spain, Netherlands, France and Germany, mobile bus and rail ticket system are being piloted.  China has started.  UK to start by 2015 and fully switch to NFC by 2020.

The colloquium began by Nalaka explaining the big picture; Climate change and energy use.  Global warming is not new but the rate of global warming is. There is a multiplicity of gases causing global warming and their sources.

Looking at the Green House Gas (GHG) mix, Carbon Dioxide is dominant. Made source is fossil fuel use. The ‘F’ gases such as CFC are the man made – now getting phased out.  There is an expansion in the volume of Green house gases.

Nalaka explaied that all GHG are not equal. Methene is much worse than Carbon Dioxide, but Carbon di Oxide has a much worse reputation

Looking at the sources of GHG, there is a variation depend on the organiation which the data is obtained from. A question was raised about the impact of forestry on GHG emmisions, Nalaka explained that deforestation is the main contributor. Electricity and heat or energy supply are the biggest source with forestry a close second.

Nalaka then went on to talk about the Stern Report (UK govt, 2006) which said  ’Climate change is the greatest market failure the world has ever seen…’ He higlighted the lack of referece to ICT in the report. The only direct reference was to household appliances. Green ICTs have received more attention since then. The Stern report has never been challenged on its premise or analysis as far as Nalaka was aware.  ICT and Aviation has roughly the same level of emmision, however aviation gets much more flack. ICT sector directly contribute 2.5% of total GHG emisions according to the Mckinsey report to the UN in 2007.

The adaptability of the IT and Telecom sector to consumer demands, as such the sector should be able to respond better to the problem of GHG emmision than other industries.

Next, Nalaka moved on to how the ICT sector ‘green’ itself beyond simple CSR/PR gestures? An ITU report elaborated on why the GHG from the ICT industry has been rising. Among the reasons  were Proliferation of user devicesUsers owning more devices, Devices today consume more energy and More processing needs more cooling. Nalaka then explained thaat some of the new technology such as sHD televisions draw more power than the traditional units. The stand by power or vampire enrgy too contributes significantly to energy consumption. standby power cost 8% of entire British domestic power consumption (UK Energy Rev, 2006)

Some of the suggestions given by Bill Melody were Improving sector’s own carbon footprint, ICT applications improving efficiency of other sectors, esp. infrastructure.Third order implications from widespread applications of green ICT that change institutions & behaviour patterns.

In taking the first point, with IT and telecom sectors, we can look at both Macro/industry level savings and then micro/consumer level savings.

In taking the Telecom sector, the opportunity lies in telecom migrating to Next Gen Networks (NGN) as Less switching centres needed, More tolerant climatic range specs (less need for air conditioning) and New standards (VDSL2) allow 3 power modes: full, low, sleep

Are savings being offset? Some of the questions are how energy-conscious are services & applications riding on NGNs? Rapid growth of web-based services driving up power demand & CO2 emissions

Rising power use by server farms supporting PC and mobile web use: Hidden green costs of Google apps? Does a web search kill a tree?

The ETNO report highlights the need for Srategic approach and also the need for scaling. The plan to reduce GHG will only work if the operators and players make a commitment.

What are the cost benefit ratios? What is the effect of ITC on the Transport? The other is the concept is cloud computing. Finding from 3rd annual survey by Rackspace, Pub Sep 2009 (150 IT managers worldwide) http://tiny.cc/GreenCloud says that there is no tangible drop.

What are the other low hanging fruits? Also which of the technology that can be passed without bing stuck in political bickering and policy paralysis? An example is the Copenhagen summit. In copenhegen no one wanted to be the first to make changes.

The other level is where ICTs and Telecom help other sectors go green? One OCED analysis says that creative use of ICTs can reduce electricity consupltion/GHG emmisions by 15%. THere is also the process (experimetal) of carbon capture. Norway is at the moment building carbon traps.

What are the cost benefit ratios? What is the effect of ITC on the Transport? The other is the concept is cloud computing. Finding from 3rd annual survey by Rackspace, Pub Sep 2009 (150 IT managers worldwide) http://tiny.cc/GreenCloud says that there is no tangible drop.

The Transmission and distribution loss is about 18% in Sri Lanka,  Delhi can be as high as 40%. A certain level is unavoidable. US is abut 7%, theoretically SL can go lower as the systemis much more compact. Most of the loss is that the generation and end use is not prperly coordinated. This is the Smart rid arguemtn. We also have to be awre of the re-bound. The relationaship is not linear. There is a need for better measuremnent.

Big Challenges: Growing human numbers, Rising middle classes through globalization and Global warming.

What is to be done? Look for a ‘handle’ on Climate/ET/IT, Ignore corporate spin, media hype, Search for strategic ‘entry points’, Study trends & patterns, Demystify industry data, find policy implications, Look for improvements that are: significant, affordable & less politically contentious Measurable & scalable

We also will require regular tracking, simple industry wide chnges and find Ways to crowd-source for monitoring and innovation.

ICTs have the ability to make under the radar changes unlike the avation industry.

Finally; “Telcos are punching below their weight in the climate change arena – they can be part of the solution than part of the problem. They will find it hard to avoid being victims of climate change, but they can reduce their role as villains; and they might even turn out to be heroes.” –  Stephen Young, Ovum Consulting http://www.ovum.com/go/content/c,67759 and “We need both IT and ET, flat and green, working together. Because only then can everyone and everything be both distributed and connected. If we can get that, the world will have a new operating system!” – K R Sridhar, CEO, Bloom Energy

Sujata Gamage: A starting point maybe to start with Melody’s levels and form a picture with the sectors metioned at te begining.

Rohan SAmarajiva: A clear starting poitn is the improvement of the individual sectors’ carbon foot print.

Healni Galpaya: Carbon trading seems to be failing, but there is an economic incentive(s) to switch to more green technology in the telecom sectors in developing countries that adopt the budget telecom model.

Nalaka: The cost of nergy sources such as solar power are falling.

Helani, Rohan: There is no taxes etc involved in the installation on solar panels. There is a need to work wtih the industry to learn more about this.

Rohan: Transport/ICT trade off? Improvements in Efficiency does not mean green solutions.

Shazna: Maybe we can look at the Telecom sector in terms of research:

Nalaka: That maybe a sarting point. No multi country studies have been done.

Telecom growth is phenomenal in some emerging nations of the Asia Pacific region, but the risk attached to investments in each country varies. Pakistan scores the highest in five parameters, while India tops in one in the Telecom Regulatory Environment survey.

Read the full article here. 

Findings from the TRE study were presented in Delhi, India, last week, at a panel discussion, co-organized by Voice&Data.

What did we learn?

1. Broadband users in Colombo should not complain. They do have excellent choices. In terms of actual speed they are better off than counterparts in Dhaka, Chennai and New Delhi. Hold on, there is a hitch. They rarely get what is being promised; operators seem to over promise and under deliver.
2. Indian operators, as seen from test results from Chennai and New Delhi, while not promising sun and moon, deliver what they do and sometimes even more. That is what we call ‘Ethical Advertising’. Indian Telecom Regulator’s intervention can hardly be overlooked. In January 2008 Telecom Regulatory Authority of India (TRAI) directed the operators to specify the minimum speeds and to keep that promise. Looks like it is working.
3. Dhaka: Prices seems to have dropped but so does the quality. So after all it is not such great news.

That is not all, there is an interesting piece of information useful for any mobile broadband user in Colombo, but we leave the readers to find it themselves. The full report is here.

More information on the findings can be found here. 

***

The 2008 TRE survey was conducted among over 300 informed stakeholders across eight countries (Bangladesh, India, the Maldives, Pakistan, Sri Lanka, Indonesia, the Philippines and Thailand) with the aim of exploring several dimensions of the regulatory environment, including market entry, allocation of scarce resources, interconnection, regulation of anti-competitive practices and tariff regulation.

Voice&Data is India’s only magazine on the business of communications providing vital information, statistics and analyses on the business, technology and regulatory aspects of Indian telecom and networking.

How far onshore rural BPOs cater to the needs of their clients? It might not exactly be toy manufacturing outsourced to rural China, but close. The connectivity issues still exist, and capacity building too remains a challenge. The good news is in spite of all that things do happen.

Isura Seneviratne, 22, runs OnTime Technologies at Mahavilachchiya – the first rural BPO in Sri Lanka, born as a joint effort of Horizon Lanka Academy and FARO (Foundation for Advancing Rural Opportunities). Isuru and its first manager Nirosh did the business plan. Trained in Laos and India for BPO work, Isuru knows the nuts and bolts of the game. The operation is still lean, only 8 seats against 25 – the expect target within the first year of operation. Cannot blame because the business had to face the hard challenge of not only building capacity but also pulling legs by different parties. Fortunately the internal politics is now over with the bold step by Lovina Charles, a key donor of the Horizon project at Mahavilachchiya expressing her full backing for the BPO.

At OnTime technologies an operator earns Rs. 8,000 (USD 72) minimum per month, while the highflyers take something like Rs. 13,000 (USD 120) home. Assuming a reasonable PPP ratio this is equivalent to earning USD 240 – 300 in Colombo.

OnTime Technologies offer data entry, data verification, data Indexing, scanning, web designing and graphic designing services. Isuru is proud to mention his clients, John Keells Holdings and Dialog Telekom, two conglomerates. His next goal is a project too ambitious. From Mahavilachchiya Isuru and his team is going to handle the daily issues for a hotel network.

Isuru is not alone in the game.

Jayantha Wickramaratne of Panamura Nenasala, Embilipitita (a telecenter setup under the World Bank funded e-Sri Lanka program) provides e-commerce services using the e-Bay model through the site http://www.ecseva.lk. Advertisements placed by service providers are made available to the large base of site’s users. Anyone who has a job too can place an advertisement which will be then offered to a bidder through a competitive bidding process.

Selvaratnam Sri Kanthan of Koslanda Nenasala too runs a rural BPO service for local and international clients. Partnered with NLingua Services of New Delhi, a voice transcription and translation service, his Nanasala employs Koslanda residents to translate and transcribe audio files from Tamil or Sinhala into English, or vice versa. Web Design is another service he offers.

This does not mean everything runs perfectly. There are so many issues to be addressed. (For example Isuru can do a better job with a link of higher capacity than his present 256 kbps one) Still these courageous and innovative young men and women bring us hope – in difficult times.

“We will roll out the services next month as all formalities are done and issues relating to inter-connectivity have been sorted out,” Bharti Enterprises vice-chairman and managing director Rajan Mittal told reporters in New Delhi.

The telecom giant had been facing problems of inter-connection, with local carriers not willing to give inter-connections to the company.

Source: Hindustan Times, Nov 04

The operators added more than 8m mobile-phone subscribers in October, bringing the total to over 217m. India has met its ambitious target, set two years ago, of 250m fixed and mobile-phone connections. But the government is sadly unprepared. It has not given India’s mobile operators enough space on the radio spectrum to carry calls crisply and reliably. India, the operators complain, faces a “spectrum crunch”.

In November Sunil Mittal, the chairman of Bharti Airtel, wrote to India’s telecoms secretary describing the “extreme anguish” caused by the “pitiful” amounts of spectrum granted to operators using GSM technology, the dominant standard that is used by three-quarters of Indian subscribers. The government had said it would provide extra spectrum to firms once they had amassed enough subscribers. Airtel, for example, was supposed to receive an additional allotment in Delhi once it passed 1.6m subscribers. It now has over 3.6m and is still waiting.

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The Nation Economist, Sunday 26 August 2007 | See Print version

I have to say that JHU does not know economics. What is the rationale behind taxing the only sector that is growing? The industry is giving government enormous amount of revenue. Twenty percent of every mobile rupee goes to the government. If you squeeze the goose for more eggs the goose will ultimately die. To my knowledge some of the taxes the government is thinking of will really kill the industry. We have got data which say people in the bottom of the pyramid are willing to spend Rs.500 per month on communication. So if the government put another tax these people will be discouraged to get themselves connected and as a result of that the government will lose revenue.

By Indika Sakalasooriya
The entry of the Indian business tycoon Sunil Miththal’s Bharti Airtel, India’s biggest mobile operator into the Sri Lankan market has left many players in the telecom sector to ponder on the harsh effects of severe competition in the future.

The existing mobile operators in the market seem to have appraised the impact even before the physical arrival of the Indian giant. The majority of the industry analysts are now of the view that the profit margins of the mobile operators will become thin due to the expected intense competition in the market.

However, amidst all these developments, from the government’s side we heard a story of further taxation of the growing mobile industry. The Nation Economist thought it opportune to get some insights from Professor Rohan Samarajeewa, a former head of the Telecommunications Regulatory Commission of Sri Lanka who is a keen observer of developments in the telecommunication sector in the Asian region to find out his assessment of the Sri Lankan mobile industry and where it is heading.

Here are the excerpts of the interview
Q : What is your general assessment of the Sri Lankan telecom sector as it stands today?
A : Doing well and could do much better. Why do I say doing well is compared with every other sector, the telecom sector is doing well. Its contribution to the GNP growth rates is considerable. Why do I say it can do better is Pakistan has overtaken us in mobile and our ADSL data situation is not really satisfactory in terms of people getting value for money. A lot of the BPO industry is not growing as fast as we expected. So in that sense we really could do much better than we are doing now.

Q : What kind of an impact will the arrival of Bharti Airtel have on SL telecom industry and to the mobile operators in the market?
A : Well, first we have to look at the Indian market and Bharti Airtel. India is one of the exciting markets in the world because every month 7 million new phones are added to the market. That means 7 million new subscribers. So now you get a sense of how big the Indian market is. And also India belongs to BRIC (Brazil, Russia, India and China). BRIC has the most happening markets in the world and we are sitting next to a BRIC. In the Indian telecom industry Sunil Miththal and Bharti are seen as innovators. He is getting awards and prizes in India. We have to find out for what he is getting prizes?

They are not getting those for being the biggest or for being profitable. We have to understand that there is no technological innovation but business innovation when Bharti is considered. The business innovation is how you make high profits on very low revenues per user. The company has pioneered very innovative techniques and that is they don’t run their networks. They outsource the whole thing down to the supplier. So what they are doing is basically brand managing. They own the brand and manage the interface with the government and they supervise the outsourcing process. Having the two facts in mind let us think of the size of Sri Lanka. Sri Lanka is about the size of greater Mumbai or greater Delhi. So, here we have is a company extremely good at managing costs and handling numbers. So here they come to Sri Lanka. I’ll be very concerned if I’m one of their competitors.

However there are two things that go against them. One is Sri Lanka has a few very efficient and sharp mobile companies and among them nobody is a sleeper. The second reason is Bharti is investing two little. It suggests to me that they are basically going to do a very conservative roll out. In 2004 the Central Bank of Sri Lanka in the Consumer Finance Service said 25% Sri Lankan households except in Mannar, Kilinochchi and Mulathiwe areas had some kind of phone. Now I’m willing to stick my neck and say it has gone up to 55% by now and that’s an extrapolation from some data we have. So we have to understand that this is a highly saturated market. At the same time we don’t have mobile number portability. The only country that has mobile number portability is Pakistan. So considering all these facts I’d say it is not easy for Bharti.

Q : Will the competition be healthy in terms of survival of the industry?
A : Yes sure. I’m always there for intense competition. Many think that the margins of the service providers will go down with the entrance of a new player. But I don’t think so. In 1994 when Dialog enter the market many people thought Sri Lanka was a tiny little market and there was no way that a fourth mobile operator can succeed. First it was said that Dialog would not succeed and secondly the margins will come down. But what happened? A fourth player came. Did the margins come down? Let us assume that what you are saying is correct. So the worst thing that can happen is the exiting of one player. The player who cannot give the enough commitment will exit the market. What is wrong in that?

Q: With the arrival of Bharti it was reported that some parties in the government had proposed to further tax the mobile industry as the sector is considered to be profitable. What is your reading on that?
A : I have to say that JHU does not know economics. What is the rationale behind taxing the only sector that is growing? The industry is giving government enormous amount of revenue. Twenty percent of every mobile rupee goes to the government. If you squeeze the goose for more eggs the goose will ultimately die. To my knowledge some of the taxes the government is thinking of will really kill the industry. We have got data which say people in the bottom of the pyramid are willing to spend Rs.500 per month on communication. So if the government put another tax these people will be discouraged to get themselves connected and as a result of that the government will lose revenue.

Q: Since you mentioned the issue of number portability, what are the pros and cons of number portability? Will the implementation of number portability lead to some perfect competition?
A : Competition has to be the basic rule we should be working on. An essential quality of competition is when a customer is not satisfied he or she should be free to go to another supplier. So now the question is if I’m not satisfied by my present mobile services provider I still have to bare it since I’m not ready to change my mobile number. But in a place where you have total competition you should be free to go to another service provider while keeping the same number. That is what mobile number portability is all about. People might ask me if the number portability is so important why didn’t you push for it when you were the DG of TRC? I had to deal with less than million phones and we had various problems such as interconnection. So during that time the idea of having number portability is very close to a dream. By now our telecom industry is growing and today mobile number portability has become a very important aspect of the industry.
There are two ways of doing number portability. One is call forwarding and the other way is to do it in a straight way through an intelligent network. It has costs and will take time. But it will definitely improve the market.

Q: As a former TRC DG and present advisor to the government of Bangladesh on telecom related matters, what are the reforms you are suggesting for the present telecom regulatory regime for the betterment of the industry?
A: I am a policy and regulation guy. For the industry to grow what we really need is a greater attention to be paid to what we call wholesale access. All the mobile operators should get the privilege to use the under sea cable going out from Mt. Lavinia on a non discriminatory cost oriented way. At the moment there are only three companies using the cable, SLT, GSNL and Dialog. But these other two companies get step motherly treatment from the SLT and that should be straightened. That’s a regulator’s job. Within the country majority of the fiber optic cables belong to SLT. But they should offer that facility to other companies at reasonable prices. Because it doesn’t make any sense in our country for every company to have their own fiber optic cables or to build microwave networks on top of already existing networks. So at a fundamental level I would put that as the highest priority because that can reduce the cost of a call. The other thing as I mentioned earlier is the mobile number portability.

Q : What are the key areas that the existing and the prospective telecom service providers should concentrate in carrying out operations?
A : The bottom of the pyramid is the place they should focus. I’m telling this because we have done research on the matter. The companies should understand that it is where the money is. As Professor Prahalag said, there is a fortune to be made at the bottom of the pyramid. The other fact is in Sri Lanka the main two growing sectors are telecom and banking. Why can’t we put the industries together since that is where the action is.

Q : Some say that the present regulatory system is in favour of the SLT of which the government still has the major stake. What is your opinion on this?
A : The Act we at the moment have is archaic and obsolete. The law is not very good and the staff is not very competent and it is possible that the regulatory authority is not doing well. What I can say is in my time Sri Lanka Telecom was fined for violating its licence condition. Therefore at least I can say during my period SLT was not favoured.

Q : As a person who is running a research body that overlooks the entire Asian region, can you explain why India still does not practise 3G operations?
A : Well the reason is the problem we also have. But India has it in a bigger way. Indian military is occupying a lot of frequencies. Therefore to start 3G operations the Indian Army and the other defence forces should be moved away to clear the frequency. We are not in bad shape as in India but we are close to it. We have not only military problems but also there are other parties who are using these frequencies for low value purposes.