India can do better on mobile phone growth

Posted on August 7, 2008  /  0 Comments


Frederick Noronha (IANS)  | Thursday, 07 August , 2008, 11:40
Bangalore: India is growing by leaps and bounds when it comes to mobile use, but it could be doing better, the authors of a new book on policy roadblocks to communication growth in South Asia have said.

LIRNEasia executive director Rohan Samarajiva and researcher Ayesha Zainudeen, editors of the book ‘ICT Infrastructure in Emerging Asia: Policy and Regulatory Roadblocks’, told IANS in an interview that over the study period, India’s mobile connectivity was overtaken in per-capita terms by both Pakistan and Bangladesh. 

“There is still a large gap between rural and urban telephone growth, as highlighted in the book, due to flawed policy implementation (at the time of writing),” said Samarajiva.

Bangladesh and to an extent Sri Lanka “are not as bad off in terms of rural telecom use”, he said.

The Bangladeshi case is in part due the density of the population, the incentives created by the refusal to interconnect by the incumbent operator and even to the initiative of the Village Phone programme in the early years.

“Indonesia is ahead of India in terms of penetration, but not growth, while Nepal is the only country out of those covered in the book which is far behind India in terms of penetration,” said Samarajiva, known for his arguments to make modern communications more effective in South Asia.

“This being said, some of the inhibiting policy factors that were highlighted in some of the chapters, which have contributed to this large urban-rural divide are changing now – for example, the ADC (Access Deficit Charge) has been eliminated,” he said.

“Overall, we think India has a more robust policy and regulatory system than others, though of course it could be better. The very powerful role of the Department of Telecom is problematic,” the researcher added.

The book he co-edited is a collection of research articles, recently published by LIRNEasia. It has been published by the Canadian development organisation IDRC and Sage Publications.

“The book looks at the recent experiences of some countries in emerging Asia improving connectivity. The central argument is that connectivity is held back not by technology, but by policy and regulatory barriers,” Samarajiva told IANS.

In some cases though, despite poor policy and regulatory conditions, technology and business innovations have permitted ‘work-around’ solutions. The book argues that the full benefits of connectivity cannot be realised unless the policy and regulatory barriers are removed.

LIRNEasia calls itself “a think tank that seeks to advance evidence-based policy making.” It focuses on the BOP, or the bottom-of-the-pyramid.

“Currently, we focus on South Asia, but we seek to cover the entire Asia Pacific. Our work on regulation is driven by the idea that what is appropriate for our countries are simple, easy-to-implement, low-cost methodologies,” says Samarajiva.

“That is one reason we are developing alternative methods of regulation, based on benchmarks. The comparative data that we have developed can be used for benchmark regulation.”

LIRNEasia’s research focus has been on the use of emerging “more-than-voice” applications, what they call Mobile 2.0 applications, at the bottom of the pyramid.

This includes the kind of applications that perform the functions conventionally done through the Internet – information retrieval, information publication, transactions.

In the backdrop of rapidly spreading mobile phones, the absence of good Internet connectivity and the limited penetration of PCs in much of emerging Asia, these kinds of functions will most likely be performed via mobiles rather than the Internet, Samarajiva argues.

South Asia, he maintains, has some interesting trends in promoting mobile communication.

For example, the least-cost subsidy auction for universal service in Nepal was the first instance of a model that had worked quite well in Latin America being implemented in Asia.

The Indian universal service obligation fund is the world’s second largest, and quite high profile. Universal service is a term used mostly in regulated industries, originating from the US’s telecom sector. Universal service refers to the practice of providing a baseline level of services to every resident of a country.

“The lessons one draws from it are likely to be of great interest to many,” said Samarajiva.

Currently Asia is the fastest growing region in the world in terms of connectivity; between 1984 and 1993, the Asia Pacific as a region overtook the other regions of the world (mainly due to mobiles), and it continues to grow, he noted.

“In terms of the five countries (South Asian) that we look at, all the five countries have seen growth in their GSM sectors of more than 40 percent between September 2006 and January 2008,” he told IANS.

Contrary to common perception (at the time), high levels of telecom use at the bottom of the pyramid (BOP), or lower socio-economic groups were seen in several Indian and Sri Lankan locations.

The book also found that then post-conflict district of Jaffna in Sri Lanka showed far higher demand for telecom at the BOP than in areas not affected by the civil war, with people spending far higher amounts of money to keep in touch.

The case study of the Indian universal service fund showed that most of the funds collected were yet to be disbursed, Samarajiva noted.

“The process used to disburse the little that had been disbursed by that time, though highly transparent, was biased in favour of the incumbent,” he added.

Between 2004 and 2005, the fastest growth was in Bangladesh.

From 1997, when the first mobile service provider began operations in Bangladesh, the mobile market has grown to more than 20 percent to date. One of the key reasons for the phenomenal growth is the priming of the market by Grameen Phone, the largest operator.

“The success of Grameen Phone can be attributed to its leasing of nation-wide infrastructure from Bangladesh Railways, which allowed it to roll out rapidly, gaining a critical mass of subscribers,” Samarajiva added.

“We do not talk about it directly in the book, but over the period covered in the book, Grameen Phone was developing a new business model based on low prices, very high loading of the network with minutes and low Average Revenues per User (ARPU),” he said.

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