For a lay observer of the Indian telecom industry, the scenario today must be quite confusing. First it was the issue of equipment import from China that was driving the industry up the wall. The government devised a solution by asking overseas equipment firms to deposit their software code in a government-controlled escrow account. One thought the issue was over and telecom firms could now happily start importing and rolling out services to accommodate more subscribers. But there is a different problem now.
As if the threat from Chinese equipment was not enough, the lawful interception of BlackBerry messages suddenly resurfaced. This issue had raised its ugly head in 2008, was debated for a few months and then slowly disappeared from the pages of newspapers. For a lay observer, the stand-off between the security agencies and Canada?s Research In Motion (RIM), the manufacturers of BlackBerry, on the one hand, and equipment manufacturers like Ericsson, Nokia Siemens or Huawei on the other, may paint a scenario that the security apparatus is unnecessarily needling the industry people who want to do business peacefully. It also projects an image of the home ministry pursuing a hawkish line and wanting to invade the privacy of citizens.
Of course, security concerns are paramount and override any right to privacy, with regard to phone conversation or messages, and the intention of our establishment has never been in doubt. It?s just that they could have gone about it in a more cogent, coherent manner. Having said that, the telecom industry?s ?plight? today is largely due to their own actions. If a blame game is to be pursued, they should first blame themselves. What is largely seen as a homogenised telecom industry is in reality a largely fragmented one, with diverse interests and business politics. With India emerging as the world?s fastest growing market for telecom, every component of the industry has large stakes here and plenty of money is to be made.
Let?s take the case of equipment imported from China, which was feared to contain spyware, thus posing a security threat to us. It was more likely a business fight that was played in the security domain. The equipment market is divided between European manufacturers like Ericsson, Nokia Siemens, Alcatel Lucent, etc, and Chinese manufacturers like Huawei and ZTE. As in most other areas, the old order is witnessing a major challenge from the emerging order. If the government had banned the import of Chinese equipment, it would have left the field clear for others. However, the telecom services industry largely batted for the Chinese players as their equipment comes at much lower rates backed by vendor credit. In markets where tariffs are at rock bottom, every penny saved elsewhere would help the bottom line. Today, the Chinese have no problem with the government demanding the software code, but the Europeans are crying foul. Their fear is that if the codes leak and get into the hands of the Chinese, they would inflict a final and crushing blow to the European manufacturers.
The BlackBerry case is quite similar. The total subscriber base of all kinds of smartphones is around 5 lakh in the country and the major chunk is with BlackBerry. It has emerged as a clear winner in the enterprise segment by being an early starter. But the messages and mails on its servers cannot be de-encrypted and RIM is adamant that it cannot help the government on this front. Other manufacturers see a big opportunity here and would only be too happy to see BlackBerry banned so that the market can be captured by others. If the equipment software case is anything to go by, the competitors need not be overly optimistic. There?s every likelihood that the government will introduce a set of regulations that strangulates all. The signs are visible already with the intelligence agencies demanding lawful interception on 3G services of state-owned BSNL and MTNL. These two companies started their services a year ago, while private operators are looking at launches by the year-end. Surely they have reasons to feel jittery. Very soon Google and Skype are also going to feel the heat, similar to RIM.
One bit of advice to the government: rather than using this piecemeal approach to security related issues concerning the telecom sector, it would be better to invite bigwigs like RIM, Google, Skype et al along with
Indian service providers, sit across the table and solve the problem, once and for all.
rishi.raj@expressindia.com