Recommendations

The Roundtable participants developed a set of recommendations for policies and other actions intended to accelerate the growth of mobile communications to drive economic growth, encourage greater inclusion of all citizens in society, and improve the performance of government. Specific recommendations fell under four general topics: enhancing and sharing infrastructure, promoting m-commerce, expanding “e-government” to encompass “m-government,” and enouraging innovation by avoiding premature or heavy-handed regulation (depicted in Figure 2).

Figure 2: Foundation of Mobile Growth

Enhancing Infrastructure. In terms of infrastructure, the Roundtable participants recognized that further expansion of the user base for mobile communication, particularly to India’s underserved rural areas, will involve investing in expanding the reach of wireless networks while ARPU is likely to continue to fall to unprecendent low rates. TRAI Chairman Nripendra Misra noted that reaching the goal of 500 million mobile subscribers will require an additional 300,000 new cell towers. In the face of this major investment, carriers will need to find innovative ways to control costs to continue to operate profitably. The first set of recommendations concerned policies that would help lower costs.

• Provide nondiscriminatory access to essential backbone at cost-oriented prices to expand rural coverage.

First, the group recommended that to help expand rural coverage, all carriers should be granted nondiscriminatory access to essential backbone provided at cost-oriented prices. Such a policy would reduce the cost of backhaul, provide more efficient utilization of existing backbone capacity, and provide additional revenue to backbone network operators.

• Remove restrictions on active wireless infrastructure sharing.

Although network operators are permitted to share “passive” network components (such as cell towers, conduits, and generators), they have not been permitted to share “active” electronic components (such as routers and amplifiers). Allowing the sharing of active components would also help drive down costs and can be done, the Roundtable participants concluded, in a manner that does not compromise the quality of network service or erode users’ privacy in any way.*

• Allocate 700 MHz band for wireless broadband.

The third recommendation relating to infrastructure concerned the allocation of the 700 Mhz spectrum for wireless broadband communications. Robert Pepper of Cisco reported that despite claims that this band was already being used by Indian broadcasters, it actually is not being used. (The 700 Mhz band has been used by broadcasters in the United States but is being returned to the government for auction as broadcasters switch to all-digital transmission.) Vanu Bose of Vanu Inc. noted that 700 Mhz represents an attractive opportunity for India to “get out in front” by setting standards and even developing and building the equipment needed to exploit this band for broadband mobile applications but the country needs to act quickly to take advantage of this opportunity.

TRAI Chairman Misra responded to these suggestions by noting that regulation in India has “followed a path of incentivizing rather than mandating” behavior. Thus, instead of requiring carriers to share their cell towers, the agency recommends that any service provider that shares its facilities with others receives a financial incentive. The Universal Service Obligation Fund, which subsidizes creation of rural infrastructure, requires that towers set up with its support be shared among up to three operators.

More broadly, Misra endorsed the principle that all regulatory decisions should be transparent, predictable, and made in the public domain.

Promoting m-Commerce. The Roundtable participants agreed that the single most useful step that could be taken to promote m-commerce would be creation of an “m-currency” that would be similar to the M-PESA scheme in Kenya or G-CASH in the Phillipines.

• Establish a consortium to develop and support an m-currency payment mechanism for m-commerce.

To be widely accepted, an m-currency will need to be simple, standardized, branded, and trusted. The best way to develop such a currency would be to establish a broad consortium that includes representatives of the network operators, merchants, application developers, and financial services institutions. Sukanta Dey of Tata Teleservices noted that there are millions of phones in use in India but only about 300,000 VISA credit card terminals in the entire country. The mobile handsets use multiple standards, however, and only about 100 million have advanced (General Packet Radio Service [GPRS]) data capabilities. Most phones are SMS-capable, but although texting can be used for a relatively simple money transfer system such as M-PESA, it has only limited capabilities to serve as a true “mobile wallet.” Several participants pointed out the need for a “middleware” provider to develop a system that can ensure the integrity of mobile transactions.

The participants pointed to the experience of United Villages’ DakNet to emphasize the importance of hybrid services that offer locally relevant content and services and provide a friendly human interface along with technology. Only a small fraction of the total population may be ready to adapt new technologies without these enhancements. If mobile communications are to be adopted by the next quarter-billion Indians, many of whom are poor and poorly educated and live in rural villages, the technology will need to be introduced through friendly, trusted channels.

Expanding m-Governance. Given the fact that there are many more mobile users than Internet users, the largest potential for delivering “e-government services” is via “m-government” applications. Over time, in fact, the distinction between the Internet and broadband wireless is likely to blur or disappear, and users eventually will expect to get access to important resources such as government information and services in a variety of modes and on a variety of different platforms.

• Adapt all e-government applications to run on mobile platforms.

The government can help to dramatically expand access to its services by adapting current and future e-government applications to run on mobile devices. Health and educational services are of particularly high value to individuals and can help drive broader mobile use. The government also can encourage adoption as both a major supplier of content and a major user of the technology. Because of its size and importance, government can encourage the adoption of standards without having to require them (in keeping with the principle of providing incentives rather than mandates).

In some cases, the government simply needs to be more sophisticated with regard to how it develops electronic services. Robert Pepper of Cisco noted that a Google search for “India Government services” often will fail to lead to the correct site because content developers often fail to use the right “tags” to optimize the content’s visibility to search engines. Educating developers also is important to ensure that their content gets rendered properly by the most commonly used browsers.

Kas Kalba of Kalba International pointed out that because illiteracy is still widespread in India, it will be important to provide as many services as possible by voice as well as data. Rohan Samarajiva of LIRNEasia agreed, noting that SMS use tends to be lower in India than in other countries with higher literacy rates (although the use of SMS versus voice also depends on the relative costs of the two applications).

Encouraging Light-Touch Regulation. In his book of essays about India, The Elephant, the Tiger, and the Cell Phone, Shashi Tharoor celebrates the democratization of communications brought about by the introduction of the mobile phone. Tharoor contrasts the current environment, in which mobile phones are available for purchase almost everywhere in the country, with the “bad old days” when there was a waiting list of 20 million people and an eight-year wait to get telephone service. “The key contribution of government” to this turn-about, he explains, is not in anything that it did but in “getting out of the way—in cutting license fees and streamlining tariffs, easing overly complex regulations and restrictions.” (34)

The final recommendation from the Roundtable participants called on the government to continue to refrain from premature regulation that could reduce competition and stifle innovation. In many cases, applications that are delivered via a mobile phone are already covered by existing laws in areas such as consumer protection, privacy, and fraud. Reviewing existing laws, however, to determine whether they cover mobile applications and updating them as necessary would be useful. In addition, coordination between regulatory agencies could be useful to avoid conflicts arising from overlapping or unclear jurisdictions. The Roundtable participants also urged the government to work with industry to build the capacity to effectively enforce existing law.

An area in which a new approach could be helpful is to expand monitoring of mobile growth so that it includes metrics for mobile data and broadband use, not simply the absolute number of subscribers (which currently is the sole metric being used to determine things such as allocation of additional spectrum).

Meetings with Government

Immediately after completing their meeting in Kovalam, many of the Roundtable participants traveled to New Delhi to present their recommendations to government representatives. The group held meetings with the following individuals:

• Montek Singh Ahluwalia, Deputy Chairman, Planning Commission
  
• M M Nambiar, Special Secretary, and senior staff members, Department of Information Technology
  
• Nikhil Kumar, Chairman and Member of the Parliamentary Committee on Information Technology.

Montek Singh Ahluwalia

Mr. Ahluwalia was supportive of the Aspen process and made several important interventions in the meeting. In particular, he responded to regulatory issues raised in the presentation.

Mr. Ahluwalia appeared to be in agreement with proposals advocating transparency in spectrum management and the recommendation for fair access to the infrastructure owned by BSNL, the incumbent telecommunications service provider that is owned by the government. He pointed out, however, that BSNL has expressed concern about the concept of sharing its infrastructure and that Parliament had opposed similar proposals made previously. One solution might lie in trying to influence BSNL through the independent members of its board. Mr. Ahluwalia also recalled that the Telecom Commission whose influence has waned in recent years was set up to provide inputs into telecommunications policymaking from outside the parent industry, which was perceived as opposed to reform. He suggested that the commission could be approached to pursue pending issues with BSNL.

Mr. Ahluwalia requested that a note be sent to him in writing so that he could address concerns about government handling of issues surrounding m-commerce.

Department of Information Technology

In addition to Special Secretary M M Nambiar, other members of the Department of Information Technology staff who participated in the meeting were Aruna Sounderrajan, Common Service Centers (CSC); Gulshan Rai, Education and Research Network (ERNET); SP Singh, E-Governance; and Ms. Suchitra Pyarelal, Director, E-Governance Standards Division, National Informatics Center (NIC).

A discussion with senior managers of the Department of Information Technology followed the presentation of Kovalam meeting recommendations. Mr. Nambiar was interested in the group’s recommendations advocating hybrid systems of the kind United Villages was pioneering. He felt such projects had great interest for the government’s CSC program, which envisages setting up more than 100,000 CSCs to offer a variety of electronic and other e-government services in rural areas. He and Aruna Sunderrajan noted the group’s advocacy of m-governance over e-governance. Mr. SP Singh and Mr. Gulshan Rai spoke of security and standardization issues surrounding m-commerce.

Parliamentary Committee on Information Technology

The final meeting of the Aspen Roundtable took place with the members of the Parliamentary Committee on Information Technology. However, the chairman of the group, Mr. Nikhil Kumar, requested that no report be issued on this session prior to a formal release of the minutes of the meeting by the committee itself.

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