Inaugural Session

The Indian Telecom industry is worth 52 billion USD and provides employment to 2.8 million individuals. It is one of the fastest growing telecom markets in the world and contributes to 3% of India’s GDP. Although its domestic and global significance is immutable, in recent times, the sector has been marred by corruption scandals and policy flip-flops that have affected its growth. The Indian Telecom sector has now reached a stage where it can either remain a victim of the past or look ahead to a new and invigorating digital age. This sentiment is captured by Keynes who states, “the difficulty lies, not in the new ideas, but in escaping from the old ones which ramify into every corner of our minds.” ICRIER’s International Conference on Telecommunications aims to fashion a constructive policy discourse focusing on securing a buoyant future for Indian telecommunications.

Indian telecom needs to start a second innings- the sector’s track record in the immediate past is not as promising as it was when the telecom revolution started in 2003-04. We have lost ground to other countries. When there are many other economic challenges to address, it might not seem a pressing need to refresh the policy environment for telecommunications, or to develop a wider vision for the sector. But this is absolutely essential to sustain the progress towards world-class telecommunication services that India and its citizens deserve and need to succeed in the future global marketplace, and to ensure that the benefits of economic growth are more widely shared within India. The debate needs to start again today. India must look at international best practices for spectrum and trading and adapt these to its local context.

Introduction to Conference and Session Chair: 
Rajat Kathuria, Director and CE, ICRIER

Inaugural Address: Sam Pitroda, Advisor to Prime Minister of India on Public Information Infrastructure and Innovation

Session 1: Spectrum Trading, Auctions and Scarcity

With rising demand for technology-enabled services and data transfer, spectrum usage has grown dramatically. Allegedly because it is deemed to be a finite resource, spectrum is under strain from this growing demand. Indeed the conventional approach has been to treat spectrum as a finite resource, although an emerging and alternative school of thought regards spectrum as an infinite resource and blames vested interests for perpetuating artificial scarcity. In India and in most parts, the convention has been to assign spectrum using auctions with varying degree of success. India’s 3G spectrum auction proceeds touched unprecedented levels in 2010; however low participation rates for the 2G auction in 2012 revealed the need to further examine auction design, including the high reserve price preferred by policy makers. While a delicate balance must be struck between ensuring transparency in resource allocation and revenue generation, a disproportionate focus on reserve price is somewhat misplaced. For instance, in the recent auctions, revenue generation from 3G and 2G bids were USD 10 billion and USD1.4 billion, respectively; the difference surely cannot be bridged by resorting to a high reserve price.

The associated issue of spectrum trading in the secondary market has also attracted debate. While spectrum trading may create more flexibility in the market, it is not risk-free and necessitates stronger regulatory oversight. Lessons from other countries that have permitted spectrum trading will be invaluable to our efforts of creating an enabling environment that rewards efficiency.

Chair: 

Abhijit Banerji, Associate Professor, Delhi School of Economics

Panel:

Arunava Sen, Professor, Planning Unit, Indian Statistical Institute.
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Rajat Mukarji, Chief Corporate Affairs Officer, Idea Cellular Limited
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Parag Kar, Vice President Government Affairs, India and South Asia at Qualcomm
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Session 2: Regulatory and Institutional Framework

The Indian Telecom sector requires a review of its institutional structure and regulatory framework in order to create a stable policy environment. The sector progressed rapidly during the mid-2000s with effective reform and liberalization, but now faces policy blockades, damaging institutional conflict and therefore a more challenging operating environment. This has deterred foreign investors and local operators are finding it difficult to plan due to uncertainty. India therefore needs to set out a stable policy framework to attract long-term investment in telecommunications. That requires a stable licensing structure, consistent policy decisions and a predictable framework for regulatory intervention. The recent history of Indian telecommunications has been one of frequent shifts in policies, regulations and taxation that creates disruption and uncertainty for investors. This policy approach is risky in the context of the current global economic environment and with capital so scarce. Opportunistic sector policies will attract opportunistic short term investors and arbitrageurs. The time is opportune to address issues such as license extension terms, spectrum availability and allocations, and criteria for mergers and acquisitions. We must determine what sort of industry it desires and set its policy framework accordingly. The discussion in this session will have policy implications that extend beyond the telecommunications sector.

Chair:

Geeta Gouri, Member, Competition Commission of India

Panel:

Shubhashis Gangopadhyay, Research Director, India Development Foundation and Director, School of Humanities and Social Sciences, Shiv Nadar University.

Erik Whitlock, Principal Associate, Nathan Associates
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Rohan Samarajiva, Founding Chair LIRNE asia

Session 3: Innovation, Service Delivery and Impacts

Innovation has been a force for positive change in the Indian telecom sector. It has significant spill-over effects and can help reduce the rural-urban digital divide. The challenge for India is to ensure that it progresses towards becoming a trendsetter in telecom innovation rather than lagging behind. India is the world’s second largest telecom network-and scale matters for innovation. Innovation can also help address issues of domestic service delivery. Telecoms currently provide more than 950 million points of connectivity in India, through which information flows. Citizens with access to telecommunications can tap into the economic growth opportunities much more easily than those who are unconnected. Several models of inclusion now have telecom as an integral part of the delivery value chain. The lack of conventional transportation and financial infrastructure warrants the need to develop and support alternative delivery modes.

There is a growing body of careful empirical economic research supporting the positive impact of mobile telecommunications on economic growth. Econometric based research has established a causal relationship between higher telecom penetration in a country and higher national economic growth to different regions within the same country. In India the growth dividend has been estimated to be as high as 1.5% for every 10% increase in the penetration rate. The App Economy is a new layer in a growing list of IT applications that have enormous economic and social impacts. Indeed, mobile applications now make phones immensely powerful as portals to the online world. A new wave of “apps,” or smartphone applications, and “mashups” of services, driven by high-speed networks, social networking, online crowdsourcing, and innovation, is helping mobile phones transform the lives of people in developed and developing countries alike. For the US, Tech Net’s 2012 report states that “the app economy is responsible for roughly 517,000 jobs in the United States, up from zero in 2007”. Most businesses based around mobile app technology are at an early stage of development, but may hold enormous employment and economic potential, similar to that of the software industry in the 1980s and 1990s. The discussion in this session will focus on ways to realise the potential of innovation for inclusion, delivery and greater impacts, among other things.

Chair:

Ravi Shankar, Chairman, Universal Service Obligation Fund

Panel: 
Rajat Kathuria, Director and Chief Executive, ICRIER
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Anupam Khanna, Chief Economist and Director General, NASSCOM
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Anu Madgavkar, Senior Fellow, McKinsey Global Institute
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Valedictory Address: 
Montek Singh Ahluwalia, Deputy Chairman, Planning Commission

Vote of Thanks: 
Rajat Kathuria, Director and Chief Executive, ICRIER