No backbone

To catch even the tail end of the Information Revolution South Asia needs a telecom backbone, says Deepali Nandwani.

Deep inside Savai Madhopur, a dusty Uttar Pradesh village, is located a small, almost incongruous tin shed. You would miss it if it weren't for the dozen or so people patiently waiting for their turn to use the telephone, the only one within a 35-km radius. Thirteen-year-old Aruna Sinha, one of the three daughters of a government clerk, operates what amounts to the impoverished area's sole basic telephone service.

The public telephone booth was set up by Japanese company Koshika Telecom, which has a tie-up with Usha Telecom, an Indian conglomerate that has a licence to establish basic telecommunication services in the northern parts of India. Across Uttar Pradesh, the Usha-Koshika group is building a network of telecom kiosks that offers villagers a link with the outside world.

A telecommunication revolution? You wouldn't think so if you glanced at India's teledensity, which averages 15 telephone lines per 1000 people. Pakistan's telephone to people ratio is about 9 per 1000, Sri Lanka's 6 per 1000, Bangladesh and Nepal about 2 and Bhutan just one. Compare this with the world average of 190 per 1000 people. Or even take China as a benchmark, which has 130 telephones per 1000 people, or South Korea with 115.

"Let us not even talk about an information technology revolution in Asia, particularly South Asia," says N. Sheshagiri, director general of India's National Informatics Centre, the Delhi-based policy-making body set up by the government. "The problem lies with creaky infrastructure and skewed government policies. We have begun talking about an Internet revolution sweeping the region, we are talking about a Knowledge Society. But we don't even have the basic infrastructure in place to deal with the revolution. The governments of the countries in the region haven't even begun formulating any kind of telecommunication policy, except maybe India."

Telecom wiz
India first woke up to the need to improve its telecommunication infrastructure in 1984, when Prime Minister Rajiv Gandhi campaigned to usher in the technology era. He brought in telecom wiz Sam Pitroda, who was then in the United States. Pitroda did achieve a breakthrough and managed to link a few thousand villages, small towns and cities with a good telecom network.

In fact, at that time approaches were also launched to South Asian neighbours with India agreeing to provide its expertise and technology at subsidised rates to develop their telecommunication backbone. Since then, every government has sworn to complete Rajiv Gandhi's unfinished task, although they might not quite couch it in those terms, they have largely limited the plans to their party election manifesto.

Hundreds of thousands of villages across India lack even a single phone. The situation elsewhere in South Asia is not much different. India's private Internet Service Providers claim that if the information age brought by the Internet revolution is to really transform the economy, the region needs fibre optic lines and high-speed data pathways. Says Vijay Mukhi, president of the Internet Users Association of India, "Normal phone lines are like rutted country roads, incapable of taking the huge amounts of digital traffic that the new services will generate. But the government is not even aware of the problem. Look at the basic telecommunication services in the region, there is only one operator in most South Asian countries. Monopoly has made the government sanguine since the consumers have so little choice."

India has converted barely 20,000 km of its phone lines into fibre optic lines and that too only in highly demanding metros like Bombay, Bangalore and, to a certain extent, Delhi. Pakistan's record is 4000 km of fibre optic lines, Bangladesh has 1500 km, Nepal 1200 km and Bhutan 70 km. Claims Arun Seth, Managing Director of British Telecom for South Asia: "I was recently in Lahore. I realised that there are so few public telephone booths in the city. There are people, poor people in Pakistan, who can't afford a phone and have to walk miles to make a call."

Information technology is a lot more than telephones. The information revolution has been brought about by a marriage of telephones with computers, which simultaneously drove down the cost of communicating and drove up the amount of information—voice, text and data —that could be exchanged.

If South Asia is already lagging behind in teledensity, things are even worse in terms of personal computer 'penetration' (see table overleaf). Further, in South Asia, most PCs also tend to be outmoded. It is not surprising that South Asia is regarded as the back benches when it comes to information technology. "India still has an advantage. It would have sunk below the horizon, but for its success in cornering a share of the global software market," says Vijay Bhatkar, chairman of Dishnet, a private Indian ISP.

All South Asian countries have the same problems: lack of a sound telecom structure and the right stimulation to help the telecom market to grow. And what bugs the growing tribe of software and Internet companies in the Subcontinent is that governments just don't see it as a priority.

In India, the National Task Force on Information Technology, led by Rajya Sabha member and present foreign minister Jaswant Singh, submitted its report on 22 May 1999. Its recommendations include suggestions on how the government can 'de-bottleneck' the path of IT development. Says Sheshagiri, a member of the task force: "We have recommended construction of the state-of-art fibre optic network linking 15 cities with a capacity to carry 1000 times more audio, video and data traffic than the current lines. In two years, it will give India the backbone for the Net." The report has been gathering dust in a bureaucratic shelf since it was submitted.

In Pakistan, telecommunication infrastructure development is nowhere on the agenda. Pakistan's national telecommunication department meets once in three months, while Bangladesh has no separate telecom department. "The Asian crisis and the lack of domestic banking system and capital markets have made it impossible to finance most telecom projects. Therefore, there is a need for a new policy that would address the viability of this sector and restart capital flow into it," feels the chairman of BPL Telecom, Rajeev Chandrasekhar.

The need to build a telecom backbone is vital for more than one reason: domestic economic slowdown for one. In India, economic growth depends too much on the manufacturing sector. Says Chandrasekhar, "It needs to have the service sector growth if it has to do well. Moreover, our information technology strategy could be against the wall because of lack of telecom infrastructure."

In August, India came up with a national policy on telecom that gave private players a fresh lease of life. It permitted basic and cellular service operators to migrate from the existing system of fixed licence fees to a revenue-sharing regime and offered them a six-month licence fee waiver. The new policy is expected to give a boost to the ailing telecom industry that has been beset by a severe financial crisis due to low revenue generation. Says former finance secretary and currently planning commission member Montek Singh Ahluwalia, "The new policy takes India forward. But there are several loopholes and gaps. For instance, it does not allow 'voice over Internet', a very important technological development which is likely to revolutionise telecommunications. Telecommunications is an area where technology is changing so fast and costs are falling so rapidly that the policy may have to evolve continuously to keep pace with the development."

Ahluwalia cites the example of the East Asian tigers which have opened the doors wide open for the information revolution. Those countries know that the only way they can stay ahead in the economic race is by exploiting the information revolution. Mukhi, of the Internet Users' Association, agrees: "China, South Korea, Thailand, Indonesia. All these countries are opening their arms to modern technology. It's only South Asia, which has such a huge potential, that insists on following archaic policies."

India needs an investment of USD 12 billion in the next one year to develop its basic telecommunication infrastructure. Pakistan needs at least six billion, while Bangladesh requires about 4.5 billion dollars. Here, we are not even talking fibre optic. "The dream that instead of sluggish downloads, technologies converging on the Net will offer home shopping, superfast access, movies, will remain just that, a dream. We are nowhere close to an IT revolution," says Mukhi.

According to the Indian IT task force report, the solution could be to let multinationals invest in infrastructure-building and offer them liberalised terms in the form of tax waivers and no fixed tariff rates. With no other ideas being offered at the moment, that seems to be the only way to catch the tail end of the Information Technology revolution. But proposing a way out is one thing and implementing it quite another.