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RE: telecom debacle - chapter 2



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[Topics under debate]: GOOD GOVERNANCE
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Vijay,

Just a few points here:

1)The Indian telecom rates are NOT the lowest in the world. By a long
shot.
Indian rates might be amongst the lowest for local calling but they are
far
higher than most countries for long distance, cellular and value add
services like internet access and data transfer etc.

Check out the rates in China for e.g or in Thailand for cellular and
long
distance, they are roughly about half of India. In the US there is a $20

rate for unlimited use of telephone for local calls and very cheap
options
for long distance calling. The internet access charge is around $20 too
for
unlimited 24 hour access.

2) The purchasing power of Indians is low because the government stifles

creation of wealth by all possible ways. How can India's purchasing
power be
lower than that of the Thais or the Chinese or the Mexicans if it was
not
the government that interfered in everything economic and basically did
not
support economic growth. The telecom situation is a classic case. Why is
the
GOI asking for licence fees?? Where is this money going?? why should the

telecom companies pay licence fees when television companies do not??

3) The main question is why should there be any bidding, licensing etc.
necessary for telecom. It is like any other business and there should be
no
government caveat on who and how many companies should be in this
business.
The market and the consumer will decide who survives who is good and who
is
bad. Why should the telecom sector be specially regulated in terms of
exit
and entry. Standard rules for ethical business conduct should most
certainly
apply to this sector as much as they apply to any other industry but
there
should not be any reason for the government to decide on exit and entry.

Regards,

Bhuwan

-----Original Message-----
From: vijay rao [mailto:vijayrao@hotmail.com]
Sent: Tuesday, June 29, 1999 1:10 AM
To: debate@indiapolicy.org
Subject: Re: telecom debacle - chapter 2


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[Topics under debate]: GOOD GOVERNANCE
___Help make this manifesto better, or accept it, and propagate it!___
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It is interesting to read a viewpoint on telecom policy. I would like to

correct a few perceptions on Vamsi's argument.
1. India does not have the purchase capacity to even have two
competitors to
exist - as has been observed in Cellular, Paging etc... So the solution
of
allowing more competition and solving the problem is unfeasible. Infact,

the
problem is that the market is not being stimulated even though the
Indian
operators are giving the lowest prices in the world.
2. The government is genuinely looking for answers and a way out,
lobbies
notwithstanding. How does it politically, economically and rationally
overlook the voluntary bidding by the biggest MNCs (who know the
telecom)
and the largest Indian houses (who know India) and change the terms of
the
contract without a scandal esp in light of the FCC ruling in USA that
forced
companies to pay over $1bn when the PCS licenses prooved unviable!!!!
How do
they explain to the Public and the people who bid reasonable prices that

they were thrown out of the race only to give the irresponsible bidders
the
chance to run the service at later time without the original guy getting

the
chance to rebid!!!! How do you manage to not set precedences- what if
Enron
turn around tomorrow and says they are sorry they cannot pay the license

fee
since they did not understand the market and site this as a
precedence.\!!!!

On the other hand, there is a despirate need for telecom. DOT, without a

question of doubt, has been misusing, is misusing and will continue to
misuse their advantage for small shortsighted gains. There is absolutely

no
vision of the larger perspective of what telecom can do for the nation's

economy. So, what the country cannot do is to remain a silent spectator
to
the country missing another international opportunity of being a major
player.

The answer lies in finding a rational solution. In my paper " An
approach to
the Telecom Policy" I had developed a data based argument on the
possible
approaches. Will be happy to share with those who are interested.

WHAT WE NEED TODAY IS A SERIOUS DISCUSSION OF THE DIFFERENT FACETS OF
THE
PROBLEM AND ARRIVE AT A WELL RESEARCHED WELL DEBATED POSITION PAPER.
HOWEVER, THERE IS NO ROOM FOR LOBBIESTS OR EMOTIONS. IF YOU ARE
INTERESTED
TO DEBATE THIS, I WILL BE HAPPY TO TABLE THE DISCUSSION ON THIS ISSUE.

I believe, the forum must debate this in earnestness. This forum forms
an
excellent platfrom to have a debate on this as its members, atleast some

othem, I notice do this after much research. The issues involved are
very
strategic, very critical and very difficult. It is fashionable to
rundown
the government and find fault with it. But it truely deserves a
discussion
better than gut feels and intellectual unfounded remarks.

K VIJAY RAO





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