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BW Businessworld

Telecom: Sky Is The Limit

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May 17 is the World Telecom Day. Telecom is touching every sphere of life.
  • Direct to home (DTH) services will be available in chair car and executive class in Indian Railways
  • Extensive use of social media and the new 3D technology in recent elections in India
  • SBI to invest  `150 crore in Gujarat International Finance Tec-city (GIFT city) in Gujarat
  • Indian Government to install GPS devices in PDS vehicles to prevent smuggling of food grain
Telecom has been on a high growth trajectory in the last decade in terms of accessibility and connectivity. Access to mobile telecommunications is certainly not the only thing that is crucial to economic growth of the nation. Unless other infrastructure and complementary skills are in place, all round economic development cannot be realised. Lack of development in other sectors such as education, healthcare, banking, etc. has been major hurdle in inclusive socio-economic growth of the country. The country faces huge challenges in some of the following areas:
  • Low agricultural growth and productivity: GDP of Agriculture has been growing at just CAGR of 3.3 per cent while 58 per cent of India's population depends on Agriculture for livelihood. Farm productivity just 30-60 per cent of the best crop yields achievable in developed and other developing world. Losses after harvest due to poor infrastructure and unorganised retail cause India to experience some of the highest food losses in the world.
  • Air pollution: Air pollution in India causes 5.27 lakh deaths per year, second highest in the world.
  • Water pollution/scarcity: Contamination in water doubled last year as per tests conducted by SPHL. In northern India, groundwater supplies are being depleted faster than natural processes can replenish them.
  • Rain deficit: About 5 per cent deficit rains due to possible El Nino factor could have a bearing on economic growth by 1.75% in the next year, affecting lakhs of unskilled jobs, as per ASSOCHAM
  • Traffic congestion: As per the statistics, there is one death on the Indian road every six minutes and this is expected to escalate to one death every three minutes by 2020.
  • Energy deficits: Transmission and distribution losses in India are equal to ~1.5 per cent of country's GDP.
  • Lack of skilled education system: India's Gross Enrolment Ratio (GER) in higher education is only 15 per cent. Lack of highly trained human capital, gender bias, high pupil to teacher ratio of 32:1, dated syllabus, examination-oriented focus, monotonous classroom study    
Lack of healthcare infrastructure: India lags behind with 2.2 doctors per 1000 population. 39 million people falling into poverty every year due to healthcare expenditures.
Unbanked population: Almost 41 per cent of India's households are unbanked and they rely on informal channels, shadow banking system and get exploited.

Can Telecom Address These Challenges?

Telecom has been recognized as a valuable tool for socio-economic development of the nation. The developments in 3G, 4G and emerging 5G technologies promise huge opportunities to bridge distances and time and to help address the above problems.

As per GSMA, the global business impact of connected life could be $4.3 trillion by 2020. The question is - Is India ready to seize this opportunity and increase its GDP? The answer is yes if the telecom sector is considered as a growth enabler serving the masses and not just as a source of revenue generation by the Government. To this end, some of the issues that need to be addressed in the telecom sector are:
  • Policy clarity on spectrum trading, refarming, sharing, harmonization, M&A
  • Release more spectrum to decongest the networks
  • Invest heavily in electronics sector including manufacturing, R&D, etc.
  • Deployment of optic fibre, connecting all gram panchayats
  • Upgrading the networks with latest technologies and being current with the world
  • Clarity on tax issues, etc.
 Hemant Joshi is a Partner with Deloitte Haskins & Sells LLP