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Sunil Jain
Forget all that you've heard about Mamata Bannerji professing her love for the poor consumer, and how upset she's over the recent proposals of the Telecom Regulatory Authority of India (TRAI) to hike telecom tariffs for this lot of people. Shorn of the hype and the drama centred around her threat to boycott Parliament, Mamatadi's actions are awfully anti-consumer.
How's that? After all, wouldn't the TRAI proposals raise the bill for the poor rural consumer who makes 500 calls a month from around Rs 130 right now to a whopping Rs 210. They would, but that's just one part of the story.
For the other, what's recommended is that you switch on your computer, log on to the internet, and go to a site called www.kallback.com -- that, of course, is if you can afford the internet since Mamatadi's more or less ensured that internet rates will not be slashed the way the TRAI was planning.
But more of that later. Kallback.com is just one of the many sites advertised by companies offering cheaper international callrates than those usually offered by the national telecom carriers of a country. For calling up the US from India, using Kallback's services, you pay just Rs 36 a minute, as against Rs 84 to VSNL. And if you want to pay even less, and have a standard pentium computer, use internet telephony. For around Rs 500, discrete service providers will hook up the necessary software and hardware to your PC, and allow you to, via the internet, slash your bill to a mere Rs 5 a minute (see The Indian Express, April 11, 1998 for details).
But all this is illegal, Mamatadi will say, and what's it got to do with the TRAI's proposals anyway? Very simple, all these illegal services are proliferating primarily because the rates charged by the state-owned VSNL are so high that it's profitable to bypass the official network. Policing the network, to ensure that people don't misuse th-eir internet connections or leased lines to operate such services, is of little use since very few operators actually get caught. As in the case ofgold smuggling, the only way to actually stop it is to bring rates in line with global ones -- in fact, following the increase in import duty on gold, intelligence agencies are already reporting an increase in gold smuggling.
Global long-distance telecom rates, in fact, are roughly half of what they are in India negotiated rates for high-volume traffic can even go down to a third. In other words, all of us who make international calls are being charged double or more than we should. Not surprisingly, even the Kallback service provider is charging Indians more than what he does from other countries essentially, wherever the local rates are higher, the illegal or Kallback rates are also higher.
Now what the TRAI had proposed was to slash long distance telephone rates by about half over three years, to bring them more or less in line with global tariffs. For the internet, it proposed to lower rates by asking internet provide-rs to pay a mere Rs 96,000 for using a 64 kbps line for over 500 km as against theexisting Rs 11.25 lakh -- this would have resulted in a sharp decline in the internet tariffs paid by common users. And yes, despite all Mamatadi's ranting, telecom tariffs would actually go down for users making more than a thousand calls a month. So, essentially what the TRAI was doing was to reduce the high degree of cross-subsidisation, using profits from STD and ISD to subsidise local call traffic.
Now, in her concern for the downtrodden, what Mamatadi seems to have forgotten, is that they too have progressed and would have benefitted from the proposals. Most calls in rural areas, contrary to what Mamatadi thinks, are actually long-distance ones, and so a rate cut in STD rates could only be beneficial. Similarly, if India has to be part of the modern information age, and its citizens be allowed to benefit by at least learning about changes the world over, access to information is vital. That's what the slashing in internet and STD/ISD rates would have encouraged.
The argument given by other worthiesin Parliament, as well as the Department of Telecommunication (DoT) is that slashing STD rates will dramatically lower its income, and hence its ability to set up phones in villages. This again, is a half truth. For one, roughly half of DoT's revenues come from 3 percent of its subscribers. So, to reduce the DoT's vulnerability, it actually makes sense to broaden its revenue base a bit -- given DoT's service, it's not too difficult to see it losing these customers to the upcoming private telecom companies.
So, it was just a matter of time before the DoT began losing revenues and hence its ability to provide rural telephones -- the TRAI, by contrast, may actually have increased DoT's viability. Equally, till telecom rates are uneconomic, there's little question of the private sector entering the sector in a big way. And the reason why the private companies were brought in initially was that the government didn't have funds to put up all the telephones on its own.
In other words, the TRAI's proposals willactually benefit customers. By slashing rates for services such as STD/ISD and internet, and by making it profitable to actually expand networks in rural areas. Of course, if the idea is to let Indians remain in their shells, to make just local calls to their neighbours at low rates in networks that are close to breakdown, and fear making long distance calls because of their prohibitive costs, then Mamatadi's objections are valid ones. You decide.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
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