View: India finds a golden opportunity with telecom's latest tech-away

By Prabal Basu Roy

By attracting massive global capital, Reliance Jio has demonstrated how the power of critical mass can be used to modernise and monetise. The current thrust of GoI’s Atmanirbhar Bharat Abhiyan (ABA), too, rests on the basic premise of exploiting the advantage India has of a huge, demographically relevant, consuming population.

But this will not happen without attracting foreign capital to undertake large investments necessary to modernise and stay relevant. Telecom and technology are the low-hanging fruit that can attract large global capital irrespective of business cycles. India’s telecom companies, like those across the world, need significant digital transformation to adapt to the rapid disruptive technologies led by the confluence of 5G, network-centric business models, Internet of Things (IoT) and artificial intelligence (AI). The key is to appreciate that with 5G, telecom companies have the opportunity to migrate from providing mere connectivity solutions to providing a platform for business services across industries like manufacturing, retail and transportation.

A key enabler is adoption of cloud technologies with ‘edge’ computing for deploying globally optimal enterprise solutions closest to the customer, thereby saving precious bandwidth and improving latency. This is possible only through a collaborative effort between telecom and technology companies.

Google is behind both Microsoft’s Azure and Amazon’s Amazon Web Services (AWS) in this platform play. It is locked in an intense battle with IBM and Oracle for third place in a high-stakes game, and has made several moves to increase its addressable space beyond SMEs to mainline large corporate enterprises. In this battle of ecosystems, Google desperately needs a telecom company for its plans for India — one of the largest telecom markets in the world with a growth potential still in its infancy.

Google currently has alliances with Vodafone and AT&T globally, to rapidly enable thousands of enterprise offices embedded in their telecom networks. Its recent Anthos application platform, providing an open platform for network-centric applications, will mirror Android’s immense success in creating an open platform for mobile-centric applications.

Google’s success with Telkom Kenya in its Loon project — which will provide connectivity to the most remote regions through aerial wireless networks propelled by high-altitude balloons — and its present initiative of working with RailTel in India to provide Wi-Fi to all railway stations, are valuable bottom-of-the-pyramid solutions that India needs to consider seriously. Add to this pot, juicy promoter-less content players, and the opportunity is immense.

Indian telcos, similarly, need urgent technology alliances to unlock the true value of combining 5G with ‘edge’ computing technologies to move to a new world of real-time interconnected devices, autonomous cars, smart cities and home automation. Sunil Mittal’s Bharti, too, will need to strike similar alliances, sooner rather than later. Given its existing relationship with IBM, it may opt for the IBM ecosystem, or Amazon’s AWS, with potential for collaboration on payments, content and rural distribution.

Telecom, thus, is key to Google’s plans in India, just as core technology is for telecom companies. India must capitalise on this golden opportunity by doing an encore of its 1999 ‘telecom moment’ when Prime Minister Atal Bihari Vajpayee — despite running a minority, caretaker government — changed the face of Indian telecom by introducing sweeping changes through the New Telecom Policy (NTP). This encompassed fundamental changes in contentious issues like moving to a revenue-sharing model from a fixed licence-fee regime, ending the duopoly ceiling in all basic and cellular circles, role of the Telecom Regulatory Authority of India (Trai), and spectrum management.

Vajpayee chose compelling economic logic over politics, just a few months before polls as fund flows to the telecom sector had frozen, Swisscom had quit India, and some operators had not been able to arrange financial closure due to the state of the industry (which did not find merit in throwing good money after bad) due to grossly misplaced telecom policies. That was truly a serious ‘easing of doing business’ moment for India.

The situation is similar in many respects today. With Covid-19, gloom and doom is pervasive. The politics, though, is far more favourable and risk-free for economically sensible political decision-making. Covid-19 has exposed our economy’s deepest fault lines, and no amount of speeches, motivational messaging or good intent will help, unless we help ourselves by demonstrating some clear political thinking, backed by sound economics bereft of ideological leanings.

Google’s reported interest in Vodafone Idea could provide India that tipping point to welcome global goliaths with deep pockets. It will be a win-win for all, if only policymakers lend a hand to the cause of a truly atmanirbhar Bharat.

(The writer is a former group chief financial officer)