Encash telecom story
THE announcement by the global telecom major Nokia that it would be shifting its global network management business to India clearly illustrates the opportunity that the Indian telecom sector presents. This opportunity needs to be encashed and built upon. This will mean bringing to an end the continuous vacillation and indecisiveness over the role of foreign investment in telecom and its perceived impact on national security. It will also involve working out concrete ways in which manufacturing of high-end telecom equipment can be done indigenously. It is well known that India is one of the fastest-growing telecom markets in the world and that the low prevailing teledensity means that there still is plenty of growth to come in every segment, whether mobile, fixed or broadband. This is an attractive opportunity for global service providers and equipment vendors who want to benefit from the Indian story.
In this context, it is short-sighted on the government’s part to frame regulations that impose restrictions on foreign investment — whether FDI or FII, remote access of networks and top executive appointments. National security concerns are better addressed through a special government agency, and not through restrictions on ownership. Part of this concern can be addressed through encouraging local manufacture of equipment. This is something China has done successfully, some of its equipment makers are globally competitive. Local manufacture can set off the virtuous cycle of lower equipment cost, lower cost of service and increase in subscriber base. Nokia’s decision also illustrates that it is quite probable that work relating to network maintenance or any other job outsourced by Indian service providers to global players is likely to be outsourced back to India. Most significant is the need to keep the growth momentum going in the telecom industry. Indecisiveness over critical issues such as spectrum allocation and the ushering in of a truly unified licensing regime can arrest growth.
-- The Economic Times Editorial
In this context, it is short-sighted on the government’s part to frame regulations that impose restrictions on foreign investment — whether FDI or FII, remote access of networks and top executive appointments. National security concerns are better addressed through a special government agency, and not through restrictions on ownership. Part of this concern can be addressed through encouraging local manufacture of equipment. This is something China has done successfully, some of its equipment makers are globally competitive. Local manufacture can set off the virtuous cycle of lower equipment cost, lower cost of service and increase in subscriber base. Nokia’s decision also illustrates that it is quite probable that work relating to network maintenance or any other job outsourced by Indian service providers to global players is likely to be outsourced back to India. Most significant is the need to keep the growth momentum going in the telecom industry. Indecisiveness over critical issues such as spectrum allocation and the ushering in of a truly unified licensing regime can arrest growth.
-- The Economic Times Editorial
posted by Loco at 11:24 PM
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