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Unshackle India....

    I have been reading about the New Telecom Policy.  There is
certainly a lot of hype about this.  However, I would like to bring some
objective criticism to this issue.

    For now, I would like to point a few things about what I have been
reading in the press on the New Telecom Policy to be released.  First
and foremost, it is a step in the right direction but it is clear even
in this new Policy that we don't have adequate Mental Models for a
long-term solution.

    The part of the Policy will be the interconnection and to allow
unlimited number of players.  The worst part of the Policy is the
revenue sharing scheme and the one-time license fee.  Sure, this is
still better than the huge license fees but we have to stop replacing
one evil with another if we are going to make India into a Superpower!!
Let us think of the cost of reviewing Telecom Policies every now and
then if we don't do that.

Why is the one-time fee bad?

  1. Any fees upfront would take away valuable resources from the
     project.  The actual investment in the infrastructure would be
     reduced by the amount of the License fee as it doesn't go into
     capital investment.  This is simple economics which the Indian
     Bureaucrats in the lower echelon refuse to address.
  2. By focusing on the License fees the Government doesn't address the
     real issue of any powerful Telecom Policy in the world and that is
     the size and quality of the Infrastructure.  The main focus becomes
     Money and how much the Government can make rather than what type of
     Infrastructure the Indian People can have and enjoy!!  A Government
     for the people and by the people should know better.
  3. By charging any fees upfront, the Government is essentially
     discouraging those entreprenuerial talents that may have the spirit
     and just enough for capital investment but not enough for the
     License Fees.  This is what sets the US apart from India - it is
     the ability to encourage and support exploring and free-spirited
     minds.  That is, we kill our children and eat them and wonder why
     we are not a Superpower yet.  Government intervention is the single
     most retarding force in India's development cycle.
  4. The License fees prevent the Government from quickly listening to
     the pleas of the Telecom Industry and this why we have taken so
     long to even take a second look at another Telecom Policy.  Why
     should the Government care about the Consumer or the Industry after
     it gets its license fees?

Why is the Revenue Sharing scheme bad?

  1. I have pleaded several times before that the only way any
     Government should be rewarded is by coming up with Policies that
     create Jobs.  That is, any Government should earn its revenue by
     income taxation!!  The more the number of Jobs, the more the
     revenue for the Government through income taxation.  I would say
     that even sales or call taxes on the Telecom Sector should be
  2. The revenue sharing scheme also implies that the Government and the
     Industry are somehow collaborating to make money from the
     Consumer.  In a democratic system this is very dangerous - that is,
     if principles and integrity mean anything to us.  What I am
     insisting is the Government should be a neutral/impartial rule
     maker.  With a revenue sharing scheme this is impossible as the
     Government and the Industry are "partners" instead of the
     Government being on the side of the Consumer!  We have to care
     about principles and integrity because without them we will never
     have adequate Mental Models.

Vamsi M.

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