The Top 20 Telecom Services Companies in the World

Name of the Company	Rank	No. Of customers it has
China Mobile (China)	1	68.31 crore
Vodafone(British multinational having headquarters in London and operating in England, European countries and India)	2	38.69 crore
America Movil (Operating in 18 countries in North and South American continents)	3	25.18 crore
Bharti Airtel (Includes both its Indian and African Operations)	4	25.18 crore
Telefonica (Spanish Company operating in 25 countries in Europe, south America and Asia)	5	24.35crore
China Unicom(China)	6	22 crore
Vimpelcom (Headquarters in Amsterdam and has operations in Russia, Ukraine, Canada, Algeria, Pakistan, Bangladesh etc)	7	20.5 crore
Reliance Comm (India)	8	15.46 crore
Telenor (Norway Company having operations in 11 countries)	9	15.27 crore
China Telecom (China)	10	14.41 crore
MTN(South Africa based multinational operating in many African and Middle Eastern countries)	11	13.65 crore
France Telecom(French multinational having operations in France, Spain, Poland, England etc))	12	13.33 crore
Telekomsel (Indonesia)	13	11.72 crore
Idea Cellular(India)	14	11.71 crore
Sistema (includes MTS Group and operates in Russia, Ukraine, India etc))	15	11.45 crore
Verizon Wireless (USA)	16	11.13 crore
Deutsche Telekom (German multinational company operating in Germany, England, America etc)	17	10.78 crore
AT&T(American multinational company operating in several countries)	18	10.52 crore
Telecom Italia (Italian multinational operating in Italy and in several South American countries)	19	10.11 crore
BSNL(India)	20	9.82 crore

Spectrum Refarming-Another big blow on BSNL

Government is looting BSNL in the name of spectrum allocation. For 3G spectrum it collected Rs 10,000 crore from BSNL for all the circles where it is operating. But it allowed private operators like Airtel, Vodafone, Idea etc to take 3G spectrum for a few circles and then extend 3G services even in circles where they do not have the 3G spectrum by sharing the 3G spectrum of other operators by intra circle roaming, which is illegal. This is still continuing. Thus the private operators paid less and gained more in the 3G spectrum, whereas BSNL has paid the highest amount for the 3G spectrum without much benefit. The Government provided sub-standard BWA spectrum to BSNL and collected Rs 8500 crore for it. BSNL was allotted BWA spectrum in 2.6 MHz band which cannot be utilized for the latest LTE technology for extending 4G services whereas the private operators were allotted BWA spectrum in 2.3 MHz band which can be utilized to provide 4G services on LTE technology.    BSNL surrendered most of this BWA spectrum, but the money paid for it has not yet been paid to BSNL.

Recently the EGoM has recommended collecting one time payment from the existing telecom operators for the 2G spectrum they are holding beyond 4.4 MHz. If the Cabinet approves this recommendation, the BSNL has to pay the highest amount which will be Rs 6250 crore at the minimum level and it may be still higher if the price of the 2G spectrum that would be found in the auction to be held in November 2012 is higher. The telecom operators have to pay this amount prospectively for the remaining period of license. If the remaining period of license is more, the payment has to be more. Since the Private operators Airtel, Vodafone etc were given license in 1994/95/96, their remaining license period in thee total license period of 20 years will be 2/3/4 years and hence they will pay less for the existing spectrum. But the BSNL was allotted license for mobile services in 2000 and hence its license period of 20 years will be over by 2020 only and thus its remaining license period will be 8 years. Because of this discrimination from the Government, the BSNL has to pay very high amount for the spectrum already held by it.

Now another blow on BSNL is on the line due to the decision taken by the Telecom Commission on 17-10-2012, in the name of refarming of spectrum. What is the meaning of this refarming of spectrum?  2G Spectrum was allotted to Airtel, Vodafone, Idea and BSNL (The Companies allotted licenses until 2000) in 2 bands---900 MHz and 1800 MHz. Among these two bands, 900 MHz band is most efficient since the equipment cost is very less whereas the equipment cost is higher for the 1800 MHz band. Moreover, the 4G services also can be provided by using 900 MHz band spectrum. But the present license condition is allowing only 2G services on this 900 MHz band. While the Companies like Airtel, Vodafone, Idea, MTNL and BSNL which were given licenses earlier were allotted initially the 2G spectrum in 900 MHz band, it was over by 2001 and the later entrants could not get the spectrum in this 900 MHz band and they were allotted in 1800 MHz band only. Tata and Reliance were thus denied the 900 MHz band spectrum for their GSM services.

Since the entire 900 MHz band spectrum is with the few companies given license for 2G services earlier, there is a demand from the later entrants like Tata and Reliance for allocation of 900 MHz band spectrum to them also. They say that level playing ground requires allocation of the efficient and cost effective 900 MHz spectrum to all without discrimination. But how to do this since it was already allocated and there is nothing more available for further allocation? TRAI recommended that the 900 MHz band spectrum should be taken away from the existing holders after the expiry of their present license period. The 900 MHz spectrum thus taken has to be auctioned and allotted on that basis. This is called refarming of spectrum. The Telecom Commission in its meeting held on 17-10-2012 decided that as recommended by the TRAI, the 900 MHz spectrum allotted already to the existing operators has to be taken back fully by the Government without retaining any quantity, on completion of their present license period. The 900 MHz band spectrum thus to be taken back by the Government has to be auctioned so that there is fairness in allocation of this efficient band of spectrum. [This decision of the Telecom Commission will come into effect only when it gets the approval of the EGoM (Empowered Group of Ministers) and then by the Cabinet. The decision by the EGoM and the Cabinet on this issue is likely to be finalized in the last week or October or first week of November.]

Since the license period of Airtel, Vodafone etc will be over by 2014/15/16, the 900 MHz band spectrum they are holding now will be taken back by the Government in 2014/15/16. The auction for such 900 MHz band spectrum will be started earlier so that by the time the license period of the incumbants expires, the immediate taker is found ready by the auction. Thus the auction for the 900 MHz band spectrum to be refarmed thus will start in 2013.

The Airtel, Vodafone, Idea, MTNL, and BSNL have established their networks for 900 MHz spectrum operations at lesser cost. If they have to lose this 900 MHz spectrum on expiry of their license period due to this refarming of spectrum, then they have to get back the same in the auction. Otherwise they have to close the networks installed for 900 MHz band and build the network for 1800 MHz band in its place. Both options will be costly. As per one study, if they have to get back the 900 MHz band spectrum in the auction, all of them together have to pay an amount of about Rs 1, 50,000 crores. In case they do not get the 900 MHz spectrum in the auction and have to replace their network for 900 MHz band spectrum with the network for 1800 MHz band spectrum, they have to incur an expenditure of Rs 1, 00,000 crores.

In this regard, BSNL is facing a peculiar problem. Its license period will be over by 2020. Therefore it can retain its existing 900 MHz band spectrum until 2020. Hence the question of participating in the auction to get the 900 MHz band spectrum will arise for BSNL only in the year 2019. But the problem is that the Companies which will get the 900 MHz band spectrum in the auction will be able to provide 4G services using that band, on LTE technology, where as BSNL, although it will be having 900 MHz spectrum until 2020, will be prevented from providing 4G services on it, since the present license condition is preventing it. Therefore BSNL, if it wants to withstand in the competition by providing 4G services along with other operators, has to pay the price discovered in the 900 MHz band spectrum auction to be held in 2013 for getting its license condition changed for enabling it to provide 4G services.

Thus BSNL, although has the eligibility to retain 900 MHz band  spectrum until 2020, has to pay a large sum immediately to get the eligibility for providing 4G serrrvices on 900 MHz band spectrum.

The private operators Airtel, Vodafone and Idea are demanding the Government not to agree for this decision of the Telecom Commission since they have to pay a large amount to get the 900 MHz band spectrum again on expiry of their present license period. They are saying that for the next term of their license period also, they should be allowed to continue with the 900 MHz band spectrum without paying the auction discovered price. On the other hand, Tata and Reliance and some other operators not having the 900 MHz band spectrum are supporting the decision of the Telecom Commission. They are arguing that the 900 MHz band spectrum should not be the monopoly of the Airtel, Vodafone etc and it should be refarmed in accordance with the decision of the Telecom Commission so that they can have a chance of getting the 900 MHz band spectrum in the auction.

Fair play requires that the 900 MHz band spectrum has to be refarmed as per the decision of the Telecom Commission so as to allow all operators to have a chance to get it in the auction. But it will result in heavy expenditure for the existing as well as new operators which will result in increase in the tariff to the customers.

The only solution to solve this problem is to nationalize all the telecom companies and merge them into 3 or 4 competing PSUs in which BSNL and MTNL will be included, so that the spectrum in any band can be allocated free of cost to the PSUs by the Government. Pending this, the BSNL and MTNL, as PSUs should be allowed to have their 900 MHz band spectrum liberalised, that is, they should be allowed to provide 4G services also on 900 MHz band, without any payment to the Government for this purpose. Also, no amount should be collected from them for the spectrum they are holding beyond 4.4 MHz. Free allotment of spectrum in any band along with eligibility to utilise it for providing any service with any technology to BSNL and MTNL is required in view of the fact that they are fulfilling so many social obligations by incurring losses along with fulfilling the requirements of national security in telecom services sector.

We cannot go on like this

(The world economy is suffering with no growth or slow growth since the financial crisis that began in 2007. It was not able to revive to the same level of the preceding decade. While there is fragile recovery in America, the situation is alarming in Europe. It  is now on the brink of a deep recession and it will affect the fragile recovery in USA since the financial systems of America and Europe are intertwined.  While the growth rates of the developing countries China and India etc helped in some recovery in the developed countries, this possibility also is receding now since the growth rates of  China and India are coming down.

 In both America and Europe, attempts are being made to come out of this recession by fiscal austerity (cut in welfare measures, pensions etc) and cuts in wages and jobs. These policies will further increase the unemployment and inequalities and consequently more recession, instead of increasing investment and job creation. In the name of reforms, in India also, the same policies of selling PSUs, reducing jobs in organized sector, limiting the creation of jobs to unsecure jobs with low wages,cutting welfare measures, cutting the  subsidies to the poor and to the farmers etc are being implemented along with inviting FDIs in more and more sectors. Whether this is the way to come out of the recession and to solve the problems faced by the people in America, Europe, India etc? If not, what is the solution?

Mr. Paul Jay, Senior Editor of the Website “therealnews.com” interviewed Mr. Heiner Flassbeck, the Director of the Division on Globalization and Development Strategies of the United Nations Confeerence on Trade and Development (UNCTAD) on these issues. Mr. Heiner Flassbeck is the leader of the team that prepared the UNCTAD’s “Trade and Development Report, 2012” which was released recently.  In this interview, Mr. Heiner Flassbeck has enlightened about the futility of the policies followed by the Governments in America, Europe etc in the name of coming out of the recession and what the actual way is . Following is the summary of this interview, prepared by me—P.Asokababu)

The neo-liberal economic policies prescribed by World Bank, IMF and the Finance Department of America (Washington Consensus) for coming out of the economic problems of the world resulted in falling wages in the developed countries during the last 20 years. This was done in the name of making labour markets more flexible, which means increasing unemployment, cutting wages in relation to profits and cutting wages in relation to productivity. This lead to the present situation where the world economy is stuck and does not have any economic policy any more to get back into a recovery.

In the United States, the unemployment has jumped due to the financial crisis and it has put pressure on the wages.In auto industry, the workers are getting $ 13, $ 14 an hour or even $ 9 an hour where earlier they used to make $ 25-$ 27 an hour. 

In Europe the same thing is happening with more intensity. There are some countries which already cut wages by 20 per cent. But nevertheless, their economies are collapsing.

In the name of competitiveness, wages are reduced to make prices of the products competitive for exporting to other countries. But everybody cannot increase competitiveness, though every body can increase productivity.

 If wages fall, incomes fall and if incomes fall, consumption falls and if consumption falls, investment falls, and the economy will go deeper into recession.   If all your competitors are doing exactly the same thing as you are doing, that is, cutting wages, and then you are not really gaining any advantage. What you are doing is reducing the demand in the world economy thereby resulting in less production and recession.

When there is no real increase in demand due to fall in wages, the policy makers are suggesting the central banks to inject more money in the economy. It is supposed to give rise to growth. If fortunate, it may create another bubble, which is not a real solution. Earlier also this was done, bubble was created and it burst causing much more recession.

The theory that the market is growing in the developing countries and therefore the America and Europe should cut wages, and thus reduce the cost of their products to sell them at competitive rates in these developing countries is like the tail wagging the dog. In the global production the share of America, Europe and Japan is 65 per cent. Therefore unless there is recovery in these developed countries, China and India cannot save them from recession. Killing domestic markets by wage cuts will damage more than the gains coming in the exports.

This experiment is badly failing. In southern Europe, this failure is clearly evident. Greece has cut wages by 20 per cent, Spain is cutting by 10 per cent and Italy is on the path to cut. But it did not work and their economies are facing more and more recession.

But the American and European Governmetns are following the same policies of wage cuts for securing profits to the Corporates. It will move their economies much deeper into recession.

The Governments serving the finance capital have decided that the crisis and recession has to be utilised to the advantage of the capital against the labour, by shifting the income from the labour to the capital. They are doing this by reducing the power of the trade unions. An illusion was created by the artificial growth (bubble) in the economies that people could get rich without working, by investing in financial markets. The people including workers went on spending, by incurring debts. When the bubble burst, the crisis came.

But what is the way out? The Governments in America and Europe are following the same principles of cuts in social welfare measures, cuts in jobs, cuts in wages as a way to save the profits of the capital. If all companies are going for cuts in jobs and wages to remain competitive, the best cutter of the jobs and wages will win in the game.But for the economy as a whole, it is a disaster, since the purchasing capacity of people will be reduced drastically thereby reducing the demand and growth, throwing the economy into more recession.We have competitive wage cuts, competitive depreciation in currencies. But it will lead to disaster very quickly. In two or three years time we will have deflation and depression and no body can get us out of that any more.

So what should be done? These destabilizing forces should not be allowed to work. As long as incomes are stagnating or falling, you do not get consumption and without consumption, there is no way that the developed countries can come out of recession. For Japan, United States and Europe, consumption is some thing like 85 percent and you cannot replace that.

This reminds the story of fox and scorpion. The scorpion tells the fox to take him across the river, and the fox says, I can’t, you’ll sting me, and the scorpion halfway across stings the fox, and they are both about to drown, and the fox says, why you do it? And the scorpion says, it’s in my nature. Is it not just in the nature of the capital that they will let us drown because they can’t imagine creating conditions for wages to go up?

There should be a competent Government to prevent capital from excercising its vicious nature of drowning all people. There is no self-stabilizing mechanism in the market. The market is killing itself. The Great Depression that happened in 1930s is the example where market killed itself. The destabilizing forces in the market kill the market. Therefore you need a competent Government to prevent this. If we don’t get competent Governments who understand the logic of the markets, the destabilizing logic of the markets, then there is no way out. In 1948 there was a kind of Detroit consensus in the US automobile industry which said that the workers should systematically get the productivity increase plus inflation compensation. So the compensation should rise with inflation plus productivity. This was a good formula. If you revise it a bit, you get a perfect formula to get back into a growing economy. We have to relearn this lesson.

But one of the things about 1946 was that it was the year when more American workers were on strike in the history of the country. But the Union movement in America is very weak now. Not only in America, but also it is weak all over the world. It has been weakened by the neoliberal economic theory executed by the politics. We have to turn around from this. We cannot go on like this. We should have atleast some enlightened economists and politicians who change the course before it is too late. The workers need to get organized and fight for higher wages, not just for themselves, but the actual global economy depends upon it. The workers in America, Europe etc should look at the elections as a chance to get the right politicians atleast to get the right direction and to have a chance to be back into normal business. And normal business means rising wages in the next few years.

BSNL, MTNL sought bailout- Private Operators Opposed

The CMDs of BSNL and MTNL have written letters to the Telecom Department requesting the Government to bear the fee for retention of spectrum allocated to it already, exceeding beyong 4.4 MHz. As per the recommendation of the meeting of  EGoM (Empowered Group of Ministers headed by the Finance Minister) held on 08.10.2012 BSNL and MTNL have to pay atleast Rs 6250 crore and 4640 crore respectively for the  2G spectrum they hold beyond  4.4. MHz. This amount is likely to increase in case the price of the spectrum to be found in the auction to be  held in November 2012 is more than the minimum price decided by the Government. The private operators also have to pay the amount for the spectrum they are holding beyond 4.4 MHz. This amount to be paid for the spectrum is decided based on the  remaining period of the license of the concerned telecom companies. 

Since Airtel, Vodafone and some other private operators were given license in 1993/94/95 for mobile services, their license period of 20 years would expire in 2013/14/15. But BSNL and MTNL were granted license for mobile services only in the year 2000 and hence their license period of 20 years will expire in 2020. Therefore the remaining license period of BSNL and MTNL is more compared to Airtel, Vodafone etc and hence BSNL and MTNL have to pay more amount than the privatee operators. This is discrimination, since the private operators completed 15/16/17 years out of 20 years of their icense period without any one time payment for spectrum and now they have to pay the one time amount for the remaining one/two/three years of their license period, whereas the BSNL and MTNL have completed only 12 years out of their 20 years license period and they have to pay thee one time amount for the remaining 8 years of their license period. Thus the recommendation of the EGoM is in favour of the private operators and against the BSNL and MTNL.

Citing the fact that the BSNL and MTNL are already facing losses since 2009-10 and hence they cannot pay the amount for the spectrum, the CMDs of these PSUs requested the DoT to bear this amount for retention of spectrum. It appears the Dot may recommend this to the Government.

But the private operators are arguing that to see that there is level playing field between all the telecom operators, the Goveernment should not ber the spectrumamoun for BSNL and MTNL and they should be asked to pay. The private operators are demanding that in case Government decides to bear the amount for spectrum to BSNL and MTNL, the Government should bear the amount for spectrum for the private telecom companies also.

But where is the level playing field? The private operators were allowed to start mobile services in 1993/94 whereas the PSUs were allowed only in 2000. Afteer helping the private operators thus, the Government is trying to impose more burdens on BSNL and MTNL compared to thee private operators.

 Hence to protect the level playing field, the BSNL and MTNL should be exempted from the one time payment for spectrum for the remaining period of their license.

Why the World Economy is ailing?

Heiner Flassbeck is the Director of the Division on Globalization and Development Strategies of the United Nations Conference on Trade and Development (UNCTAD). He is the leader of the team that prepared the UNCTAD’s “Trade and Development Report, 2012”. This report was released recently. This report covers the recent and longer term issues of the world economy and it can be seen in the website of UNCTAD.  Paul Jay, Senior Editor of the website “therealnews.com” interviewed him and published the same in the website “the realnews.com”  on 14.10.2012. Folloing are the important points mentioned by Mr. Flassbeck in this interview:

The neo-liberal economic policies prescribed by World Bank, IMF and the Finance Department of America for coming out of the economic problems of the world resulted in falling wages in the developed countries during the last 20 years. This was done in the name of making labour markets more flexible, which means increasing unemployment, cutting wages in relation to profits and cutting wages in relation to productivity. This lead to the present situation where the world economy is stuck and does not have any economic policy any more to get back into a recovery.

Take the United States. The unemployment has jumped due to the financial crisis and it has put pressure on the wages.In auto industry, the workers are getting $ 13, $ 14 an hour or even $ 9 an hour where earlier they used to make $ 25-$ 27 an hour.

In Europe the same thing is happening with more intensity. There are some countries which already cut wages by 20 per cent. But nevertheless, their economies are collapsing.

In the name of competitiveness, wages are reduced to make prices of the products competitive for exporting to other countries. But everybody cannot increase competitiveness, though every body can increase productivity.

 If wages fall, incomes fall and if incomes fall, consumption falls and if consumption falls, investment falls, and the economy will go deeper into recession.   If all your competitors are doing exactly the same thing as you are doing, that is, cutting wages, and then you are not really gaining any advantage. What you are doing is reducing the demand in the world economy thereby resulting in less production and recession.

When there is no real increase in demand due to fall in wages, the policy makers are suggesting the central banks to inject more money in the economy. It is supposed to give rise to growth. If fortunate, it may create another bubble, which is not a real solution. Earlier also this was done, bubble was created and it burst causing much more recession.

The theory that the market is growing in the developing countries and therefore the America and Europe should cut wages, and thus reduce the cost of their products to sell them at competitive rates in these developing countries is like the tail wagging the dog. In the global production the share of America, Europe and Japan is 65 per cent. Therefore unless there is recovery in these developed countries, China and India cannot save them from recession. Killing domestic markets by wage cuts will damage more than the gains coming in the exports.

This experiment is badly failing. In southern Europe, this failure is clearly evident. Greece has cut wages by 20 per cent, Spain is cutting by 10 per cent and Italy is on the path to cut. But it did not work and their economies are facing more and more recession.

But the American, and European Governments are following the same policies of wage cuts for securing profits to the Corporates. It will move their economies much deeper into recession.

Measuring the Information Society 2012- A report on the telecom facilities available to the people in various countries in the world

The ITU(International Telecom Union) is the special agency of the United Nations for ICTs (information and communication technologies). Its headquarters is at Geneva (Switzerland). Its web address is www.itu.int.  It is publishing every year a report called “Measuring the Information Society” giving the details of the progress achieved in the reach of ICTs (Information and Communications Technologies) to the people in various countries in the world. It released its report titled “Measuring the Information Society, 2012” on 11^th October 2012.

Following are the important points in this report:

1. By the end of 2011, in the world as a whole, there were,:

(a)     600 crore mobile customers (86 per cent of the world population) in which China accounted for 100 crore and India will reach the 100 crore figure soon. While 122 mobile connections were available per 100 people  in the developed countries, it was 77.8 connections per 100 people in the developing countries.

(b)   17.3 per cent of the world population have fixed line telephone connections.

(c)     230 crore people were using internet and in this China accounted  for 23 per cent; 34.1 per cent of the house holds in the world have internet connections

(d)   Fixed (wireline) broadband subscribers were 60 crores and it was 8.5 per cent of the world population; 25 per cent of the population in developed countries have fixed broadband connection whereas only 4.9 per cent of the population in developing countries have fixed broadband connection

(e)   Mobile broadband subscribers were 110 crores (16 per cent of world population); 51.3 per cent of the population in the developed countries have mobile broadband connection whereas it was only 8 per cent in developing countries.

(f)     While in the high income developed countries, the fixed broadband connections deliver very high speeds (above 10 Mbit/s), the speed was only 2 Mbit/s in developing countries.

(g)    While life in the most developed countries is unimaginable without internet, two thirds of the world’s population and 3 quarters of the population in developing countries are not yet online and those that are, are not having access to high speed internet.

(h)   Mobile networks are still  delivering limited data access with lower speeds. For unlimited data access with high speed, fixed line broadband access is the only solution at present.

2. The fourth meeting of the Broadband Commission for Digital Development held at Geneva in October 2011 has set the following targets for broadband availability:

(a)    By 2015 all countries should have a National Broadband Policy for providing broadband services on demand to all people at an affordable price (By 2011, out of 144 developing countries, 127 countries have established their National Broadband Plan

(b)    By 2015, broadband connection should be made affordable in all developing countries and the entry level broadband connection cost per month should be less than 5 perr cent of the GNI (Gross National Income) per head.

(c)    By 2015, 40 per cent of the house holds in the developing countries should have internet access. (At present 20 per cent of the households are covered)

(d)   By 2015, sixty per cent of the world population should be online, 50 per cent in developing countries and 15 per cent in LDCs (Least Developed Countries). At present, 33 per cent of the world population are online.

3. IDI index measuring progress in ICTs

The progress of the various countries in ICTs (Information and Communication Technologies) availability to their population is measured by the ICT Development Index (IDI). This index is presented on a scale 0 to 10, with 0 indicating nil availability and 10 indicating full availability of ICTs. This index is made based on the following factors:

a)      ICT Access—fixed telephone customers, mobile customers, international internet bandwidth use per customer, percentage of households with a computer, and percentage of households with internet access

b)      ICT Use---per centage of internet users, fixed broadband subscribers and active mobile broadband subscribers

c)       ICT skills---capacity to use ICTs—adult literacy, gross secondary school enrolment, and gross tertiary enrolment

 IDI results of 155 countries are compared for the years 2010 and 2011 and the following are some of these results:

Country	Rank 2011	IDI 2011	Rank 2010	IDFI 2010
Korea (Rep)	1	8.56	1	8.45
UK (England)	9	7.75	14	7.35
USA (America)	15	7.48	16	7.11
Brazil	60	4.72	67	4.17
Venezula	77	3.92	74	3.78
China	78	3.88	79	3.58
Vietnam	81	3.68	86	3.41
Srilanka	105	2.88	105	2.74
Cuba	106	2.77	107	2.66
Namibia	109	2.51	112	2.27
Kenya	114	2.32	114	2.07
Ghana	117	2.23	121	1.81
Bhutan	118	2.13	117	1.92
India	119	2.10	116	1.98

Thus India (119^th rank)  is far behind China (78^th rank)  and Vietnam( 81 rank) and even behind Bhutan (118^th rank) in the ICT development, in 2011. Its rank is downgraded from 116 in 2010 to 119 in 2011. It is to be noted that China was behind India in 1980s in telecom sector. Therefore the so called spectacular development in telecom sector in India is not really so spectacular and it ranked at 119^th place among 155 countries in the ICT development. In fact, the ITU report ranked India among the least developed countries in ICTs in 2011.

There is a huge difference between the developed and developing countries in terms of ICT levels. The average ICT development index of developed countries is 6.52 whereas it is 3.24 only for the developing countries.The 155countries for whom the IDI index was published by the ITU for the year 2012 are classified as below, depending on their level of ICT development:

a)      38 High IDI (ICT development index) countries have an average ICT value of 7.10

b)       39 Upper IDI countries have an average ICT value of 4.88.

c)       39 medium IDI countries have an average ICT value of 3.12.

d)      39 low IDI countries have an average ICT value of 1.57.

e)      Thus the digital divide between the least conncected countries and highly connected countries is 1.57 : 7.10

India is included in this last category of low IDI countries or the Least Connected Countries.

Exempt BSNL and MTNL from the huge and discriminatory payment of Rs 6250 crores and Rs 4640 crores in the name of Spectrum

The EGoM(Empowered Group Of Ministers) headed by the Finance Minister Sri P.Chidambaram met on 08.10.2012 and recommended to the Cabinet that all the existing telecom services companies have to pay a one time fee for the 2G spectrum held by them over and above 4.4 MHz limit, prospectively for the remaining period of their current license. This fee will be decided based on the price to be arrived at in the coming auction for 2G spectrum, which will be completed by November 2012. All the existing telecom companies have to pay a total Rs 27,000 crore based on the minimum reserve price fixed for this coming auction. If the auction found price is more, accordingly this total will further increase. Among the existing telecom companies, BSNL and MTNL will be the worst sufferers because of this recommendation, since BSNL has to pay an amount of Rs 6250 crore and MTNL has to pay Rs 4640 crore, based on the minimum reserve price. This recommendation of the EGoM has to be approved by the Cabinet. Otherwise it will not come into effect.

When BSNL and MTNL are facing continuous losses due to the policies of the Government, how they can pay this huge amount now? It is to be noted that BSNL posted a loss of Rs 8851 crore and MTNL posted a loss of Rs 4018 crore in 2011-12, in addition to the losses already they incurred in 2009-10 and 2010-11. Imposing such a burden now in the name of spectrum they already are having will push them into further losses and difficulties. Moreover there is every justification for exempting BSNL and MTNL from any such payment.

To understand the reason behind this recommendation of the EGoM, we have to understand the way spectrum was allotted to telecom companies since 1994. The private operators who got their mobile licenses before 2001 got them at a nominal entry fee, which is almost freee of cost,   initially for the metro cities and subsequently for the other circles and got 4.4 MHz initial spectrum bundled with it free of cost. Subsequently these operators were given spectrum upto 10 MHz free of cost, depending on the number of subscribers they got. But the telecom companies who got license in 2001 or there after until 2001 have paid Rs 1650 crores for pan India spectrum (spectrum for all circles). They also were initially allotted 4.4 MHz spectrum and it was increased further dependiong upon the increase in the number of their subscribers they got.

 In 2008 the then Minister A.Raja, in the name of First Come, First Served principle, allotted initial spectrum of 4.4 MHz  to some  new telecom companies at the same price of Rs 1650 crore decided in 2001. The Supreme Court in its judgment on the 2G spectrum allocation, cancelled all these licenses and spectrum allotments given in 2008 saying that they were illegal. It directed the Government to auction the 2G spectrum that would become free due to the cancellation of these licenses. This auction would be completed by November 2012.

A question arose in this process. While  the new telecom companies who will buy spectrum in the auction thus to be held, at a higher cost (which will be a minimum of Rs 14000 crore for 5 MHz spectrum for all circles) in the auction, the existing operators have only paid Rs 1650 crore or even less for spectrum of more than 4.4. MHz, even upto 10 MHz in some circles. This will be discrimination. Hence the EGoM recommended that the existing operators have to pay the auction determined price for the spectrum they hold beyond 4.4 MHz, for the remaining period of their license proportionately.

 But how this will end the discrimination? The existing operators got the entire spectrum free of cost till now and now as per this recommendation of the EGoM, they will continue to have spectrum upto 4.4 MHz free of cost or at the most for Rs 1650 crore, till the end of their present license period.They have to pay for the spectrum held by them over and above 4.4 MHz, that too, only for the remaining period of their license.   But the new operators who will buy spectrum in the auction now have to pay for the entire quantity of spectrum they will get for the full license period of 20 years. Therefore the recommendation is not actually ending the discrimination.

Besides this discrimination between the private operators (existing and new), there is a serious discrimination against BSNL and MTNL. While Airtel, Vodafone etc were given license for their mobile sevices in 1993/1994/1995 for various circles, the BSNL and MTNL were given mobile licenses only in 2000. The present license period of 20 years will be over by 2013/2014 or 2015 in case of Airtel, Vodafone etc.

 In Delhi and Mumbai, Airtel and Vodafone were allotted spectrum in 1995/1996 whereas MTNL was allotted only in 2000. In Kolkata Airtel was allotted spectrum in 1995 whereas BSNL was allotted in 2000 only. In Maharashtra, Idea was allotted spectrum in 1995 whereas BSNL was allotted in 2000. In Gujarat,Tamilnadu, Kerala,  Vodafone was allotted spectrum in 1995 whereas BSNL was allotted in 2000. These are some examples only. But almost in every circle there was atleast one private Company which was allotted spectrum in 1995 whereas BSNL was allotted spectrum in all its circles only in 2000. The allotment to the private operators in 1995 and to the BSNL and MTNL in 2000 is free of cost without any one time payment.

 But the license period (20 years)  of the private operators who got spectrum in 1995 would expire in 2013/2014/2015 whereas the license period of 20 years for BSNL and MTNL will be over by 2020 only. Thus the private operators who were allotted spectrum in 1995 got their spectrum free of cost until 2012 (for 17 years)  and will pay the auction determined price only for the remaining 1 to 3 years period only. But BSNL and MTNL who were allotted  spectrum only in 2000 got it free for the period 2000 to 2012 (12 years only) and have to pay the auction determined price proportionately for the remaining 8 years of their license period until 2020 and hence it will be too high compared to the private operators. Therefore during the initial license period of 20 years, the private operators who got spectrum allotted in 1995 would be paying far far less than BSNL and MTNL. Such discrimination against BSNL and MTNL is unwarranted.

It is thus clear that the recommendation of the EGoM is helping the existing private operators compared to the new operators who have to obtain spectrum afresh in the auction to be held in November 2012 and at the same time aimed at imposing discriminatory and unbearable burden on the already loss making PSUs BSNL and MTNL.

Besides being discriminatory, this payment in the name of spectrum from BSNL and MTNL is unjustified on several grounds.

a)      BSNL and MTNL are “State” as per the Constitution of India and hence as the State they are the owners of the spectrum allotted to them, on behalf of the people. State  can exempt itself from any such payment while collecting the same from the private parties.

b)      As per the para 69 of the judgment of the Supreme Court of india in WP(Civil) No. 423/2010 cancelling the licenses granted in 2008 along with spectrum allocation for those licensees, the doctrine of equality implies that the procedure adopted for distribution of natural resources does not discriminate between similarly placed private parties. Therefore the doctrine of equality is applicable only among the private operators and hence the PSUs BSNL and MTNL, being part of the State, can be exempted from payment for spectrum.

c)      BSNL and MTNL are carrying out enormous social obligations whereas the private operators are not fulfilling such social obligations. BSNL is providing landline services in rural areas incurring losses. BSNL and MTNL are providing nearly 80 per cent of the broadband connections, by maintaining landlines incurring losses. They are providing employment at a far higher level compared to private operators and also implementing SC/ST reservations where as the private operators are not implementing reservations. They are encouraging domestic telecom equipment production by procuring 30% of their equipment requirement from domestic manufacturers like ITI where as the private operators are not encouraging indigenous production. They are catering to the security needs of the country in telecom sector whereas the private operators are having their networks installed, maintained and operated by foreign equipment manufacturers thus endangering the security of the country. Hence there is full justification for exempting BSNL and MTNL from the payment for spectrum.

d)      In China, the PSU telecom operators are granted spectrum free of cost and there all the telecom operators are PSUs only.

In view of the above facts, no payment need be collected from BSNL and MTNL for the spectrum. This attack on BSNL and MTNL must be stopped.  The Government should be pressurized to exempt BSNL and MTNL from this spectrum payment. The Government also should be pressurized to refund the BWA spectrum amount to BSNL for the BWA spectrum surrendered by it.

---P.Asokababu