TRAI interfaces with consumer groups

Technically qualified professionals must play an activist role

Sucheta Dalal

India has one of the fastest growing telecommunications systems in the world with system size (total connections) growing at an average of more than 20 per cent over the last four years, says a telecom industry website. What it forgets to add is that the process of establishing a world class telecommunications infrastructure in India has been mired in the most unseemly controversy over every aspect of the business.

Yet, through all the miscalculation, greed and bumbling, the industry continued to make strides in all aspects of the business — from cellular to radio paging, and value-added services such as the internet and global mobile communications by satellite. This was because of pent up demand from consumers and their desperate desire to gain access to world class communication systems.

Moreover, after over 50 years of being starved of telephone connectivity and having suffered the horrors of bad service and corruption inflicted by the monopoly service provider, Indian consumers were too busy reveling in new services to bother with participating in policy making, licensing and tariff decisions. To them the experience of being wooed by private service providers was such a novelty that it turned into a presumption of continued good service and efficiency.

Consumers have been kept out of the decision making process so much that the Telecom Regulatory Authority of India did not have any formal interaction with consumer groups until a few months ago. All that has changed over the last few months. On the one hand, consumer activism has had to metamorphose from handling complaints about inefficient services, disconnections and excess billing to understanding rapidly changing technology in order to intervene effectively in policy decisions. There is also the realisation that the private sector is not very interested in the baseline telecom consumer — its attention is trained only at the creamy layer, the rest can remain with the government monopolies. This has two implications.

First, if private operators woo away high value corporate consumers from the lethargic government monopolies these will slowly sink into the red. This will leave ordinary consumers not only at the mercy of bad service standards of the monopolies, but their future losses would also be passed on to the consumer in the form of high tariffs. Second, as in the case of domestic aviation where Indian Airlines’ high tariff allowed Jet Airways to grow rapidly, so also in the telecom sector will private operators benefit from the high tariffs charged by government companies. All they have to do is benchmark their tariffs to the monopoly.

The telecom controversies over the last few years have effectively demonstrated that private and foreign companies are adept at using the corrupt government system to sabotage the existing monopolies and stymie their growth plans in order to extract advantages for themselves. The process begins right at the top. Here are a few examples. The disinvestment of government holding in Mahanagar Telephone Nigam Ltd, Bharat Sanchar Nigam Ltd and the Videsh Sanchar Nigam Ltd has been successfully stalled by various telecom ministers themselves. Even their efforts at raising money through global depository receipts have been marked with controversy.

MTNL’s dynamic chairman and managing director C Rajagopal was penalised and censured for his efforts to revitalise the organisation and give private operators a run for their money through the MTNL internet and cellular service. After his exit, Dolphin was successfully delayed for a long time, which even in its present, not very efficient form, has been a big boon to consumer. For starters, it forced private cellular operators to slash their tariffs by half.

In cities such as Mumbai, the private sector operator, Hughes Telecom is fairly open about keeping out individual consumers. Consumers who want to switch from the MTNL service have been openly told that unless their billing exceeds Rs 2,000 a month, they would not be eligible. Some get a more diplomatic brush-off; they are told that the company has run out of line capacity in the area. If the inquiry is from a company, the service provider is a lot more interested. Astonishingly, despite protests from consumers as well as MTNL, Hughes has neither been asked to publicly declare its line availability at each exchange nor open a booking list, like MTNL, to provide telephones on a first-come-first-served basis. At the same time Hughes has pursued and bagged large customers such as five star hotels and newspaper offices. The losers: MTNL and small consumers.

In Kolkata, an insider at BSNL tells me that the company has been fully ready to roll out its internet and cellular (the Dolphin equivalent) service for the last four weeks, but has not been allowed to do so. Does this smack of a sabotage? It happened to MTNL, why can’t it happen to BSNL?

Finally, there is the Universal Service Obligation to ensure that unviable rural and non-commercial areas are not ignored by service providers. TRAI has proposed a fund to subsidise coverage of these areas by collecting five per cent of the revenue generated by all operators. No sooner has the TRAI put out its guidelines, than the media lobbyists for the private sector are carping about the conditions. They argue that operators should be allowed to trade their obligation and the lowest bidder for subsidy allowed to meet the USO conditions for all. Also, that there should be no restrictions on technology used. Clearly, this will be anti-consumer, unless there are stringent standards for quality and performance, and the failure to meet these standards is severely penalised.

But this is easier said than done. Indian regulators (and courts) are both loathe to financially penalise anybody and are invariably tardy in their supervision. The losers: the rural consumers. The silver lining is that TRAI has realised that effective regulation is not possible without continuous interface with consumer groups. It has kicked off a two-pronged initiative which simultaneously upgrades the technical knowledge of consumer groups active in the telecom sector while allowing representation of consumer grievances. This is only a beginning. In a free market scenario, unless more technically qualified professionals take to consumer activism, the Indian consumer will be at the mercy of both the government and the private sector operators.

Writer’s e-mail: suchetadalal@yahoo.com