India


A few weeks back, we wrote about how late the NOFN train was running. It appears the USOF has accepted the reality that it cannot accelerate from 60 to 25,000 in 12 months and is asking for a two-year delay. We all know why government programs have tight deadlines. It has to do with the electoral cycle. What Nilekani achieved, Pitroda could not.
Both the horses are to be similar in size and strength while pulling a carriage. That was missing between India’s Universal Service Obligation Fund (USOF) and Reliance. As a result, Reliance has walked out of its rural mobile coverage project under the scheme of USOF. The issue dates back to 2007 when a scheme was launched under the USOF to provide subsidy support for setting up and managing 7,871 infrastructure sites, or telecom towers, in rural and remote areas in 500 districts of 12 states. RCOM and RTL had entered into an agreement with the USOF in June that year, under which they took responsibility for setting up nearly half of these towers.

More on taxes

Posted by on December 19, 2013  /  0 Comments

Connected to the earlier post on taxes, is this one about Vodafone India getting served a USD 600 million retroactive tax bill. While Vodafone maintains no tax is due on the 2007 acquisition, it has told the government it is willing to explore the possibility of a “mutually acceptable solution”. Vodafone further points it has become one of India’s largest investors, spending more than £12.8 billion in building its business in the country since 2007. The operator is also one of India’s largest taxpayers.
Big government administered projects always have a hard time getting rolling. Ask the Australians. We wish the Indian DoT the best in achieving incredible acceleration. The government has provided broadband connectivity to only 60 gram panchayats till now under the Rs 20,000 crore NOFN project, which has to cover 2.5 lakh panchayats by September 2015.
In the academic world, they count publications to measure effort. Then they count citations to measure effectiveness. There is no habit of citing research in government. But we got lucky. The Telecom Regulatory Authority of India (TRAI) had commissioned the National Council for Applied Economic Research (NCAER) to work up a Decadel Report.
That was a tough header to compose. How was it that an Indian company that had the largest share of the Indian market was importing mobile devices from China? Anyway, that has been the case so far. It’s about to change. Not necessarily true that making things in India will be cheaper.
The headline suggests the focus is on the capture of regulatory agencies by retired IAS officers. But it is more, a wide-ranging discourse on problems of regulatory governance. It is a pity that the arguments are harmed by sloppy blame attribution: how can TRAI be blamed for spectrum auctions, when the article itself recognizes that is in the province of the Department of Telecommunications? So how do we reverse this capture of important decision-making bodies by the bureaucracy? In 2006, the Planning Commission published a report (Approach to Regulations: Issues and Options) with some suggestions.
Greater value could be added to the newly built cross-border power grid, which brings electricity from India to Bangladesh. Early this year, Bangladesh has diversified its international connectivity through cross-border underground optical fiber links with the Indian carriers. The six Bangladeshi International Terrestrial Cable (ITC) operators are, however, linked with their Indian counterparts through a common optical fiber link. It exposes both the parties to the risk of disconnection, once the link is snapped. The Indo-Bangla power grid is fitted with Optical Ground Wire (OPGW) to measure the volume of electricity being flown (Red line in the map).
The survey was conducted among the low-income, urban micro-entrepreneurs (MEs) in three countries, Bangladesh, India and Sri Lanka. The study defined micro-entrepreneurs as those who employed less than ten hired workers, i.e 0-9. The hired workers are paid employees or full-time equivalent, excluding the owner. This is an adaptation of international definition followed by World Bank and European Commission1.
The widespread casualties caused this year by fast moving weather systems in Uttarakhand and in Pakistan have caused experts to call for real-time data sharing among the region’s meteorological departments. This seems to call for increased reliance on ICTs. The monsoon has been erratic in recent years. Last year, the monsoon failed in Sri Lanka, and parts of the country’s northern, eastern and southern regions went through a drought that affected at least 1.2 million people.
Bangladesh will provide 100 Gbps of Internet bandwidth to India. Bharat Sanchar Nigam Ltd (BSNL) has planned to deploy cross-border optical fiber cable, which will ensure cheaper wholesale Internet bandwidth to the seven northeastern Indian states. The states of Assam, Tripura, Meghalaya, Arunachal Pradesh, Naga Land, Manipur and Mizoram are popularly known as the “seven sisters”. India has been struggling with broadband deployment in this region being remotely located from the subsea cable lading stations (Click on the map). Assam, Meghalaya, Tripura and Mizoram are adjacent to Bangladesh while the rest are at closer proximity.
We posted that TRAI had said that 143 million Indians were connecting to the Internet over mobile networks. Only 15 million used fixed broadband. Facebook says it has 82 million MAUs in India. Even if assume 15 million come from the fixed side that means 67 million over mobile platforms. Buoyed by surging user base in emerging markets of India and Brazil, the social networking platform’s MAUs globally rose by 21% to 1.
Two days back a Facebook debate ensued over the newly inaugurated deep-draft Colombo South Port being described as China’s port by a friend of mine who is in politics. He had said this in an interview to a Sinhala newspaper where the embers of xenophobia are periodically fanned by various parties, but only rarely by liberal-thinking PhD economists. I was motivated to write up my side of the argument in my column in LBO.LK. Though the immediate subject was a container terminal, the issue was foreign investment.
For those who doubted our narrative that the future of Internet access in our parts is wireless, here is the proof. It’s not that fixed broadband is not growing (year-on-year is 9 percent), but that wireless is growing faster. There are 15 million fixed broadband subscribers v 143 million connecting over wireless platforms. TRAI’s quarterly performance report.
My second presentation at the SATRC policy workshop moved into contentious territory. I was preceded by Principal Advisor to TRAI, Mr Sudheer Gupta, who presented the TRAI recommendation that the new category they describe as “application services” be subject to a form of authorization at the cost of INR 15,000 and transaction costs. Sri Lanka’s official representative challenged the need for licensing, which made me happy. But this is an area where no one has all the answers and it is good that SATRC has got the discussion going. I did not cover the last section of the slides because of lack of time.
The perception is that 3G networks are not being rolled out rapidly in India. But it could be that the Indian consumer is ahead of the operators and regulators, as we saw in Thailand where smartphone sales picked up well before 3G frequencies were assigned. Global smartphone shipments jumped 47 per cent to 229.6 million in Q2 2013 from 156.5 million units in Q2 2012, according to the latest research from Strategy Analytics, with Samsung accounting for much of the growth.