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'This government's agenda is to kill public sector companies'

Y Siva Sankar in Bombay

India's reforms and progress in telecommunications have come under flak from a globally known industry luminary.

"This government's agenda is to kill the public sector companies. 'Kill the companies. Sell them cheap' is its motto. Somebody is making money somewhere," the expert said, on condition of anonymity.

His views, currently being circulated among an exclusive group of top telecom executives and policy-makers, have caused a flutter in the industry. For he has held top positions in both the public and private sectors, besides heading various international associations and fora.

He is currently serving out the mandatory exit notice period at a blue-chip Indian company even as industry and the media eagerly await the imminent announcement of his future plans.

In an exclusive conversation with rediff.com the telecom veteran took a hard look at the state of the industry.

On the chinks in the recent formation of BSNL:

The government has recently corporatised the Department of Telecom Services and named it BSNL (Bharat Sanchar Nigam Limited). I see no merit in this decision. DTS's corporatisation won't serve any useful purpose, this is like old wine in a new bottle.

BSNL must be privatised immediately. Had the government divested ten per cent of DoT stock way back in 1994, it could have fetched $ 8 billion. It could have grown into a $ 60 billion corporate by now.

Communications Minister Ram Vilas Paswan has apparently struck a quid pro quo deal with the employees over the formation of BSNL. Their resistance to DTS's corporatisation was smothered with the offer of free telephones at their homes.

The minister should have sought a full list of demands at one go. What's the point in ad hoc measures? It is a pity India has a minister who is given to populist measures at the helm of a very important ministry.

On the facts and fiction about Net telephony and e-commerce:

There are many misconceptions in India about Net telephony. People think international telephony would be free if the government lifts the curbs on Net telephony. No one can control the spread of technology in a democracy. We should embrace technology and resolve issues of tariff and technology.

Net telephony also requires bandwidth. Earlier, an ISD call may have cost, say, eight annas. Now it may cost two annas, thanks to Net telephony. The point is, it cannot come for free. Let there be a price for it. Customers should be educated to pay for it. In the end, there may not be more than a 25 per cent advantage for customers. There is too much hype surrounding Net telephony.

Ditto for e-commerce. Instead, focus should be on issues like education and healthcare. E-commerce is important, no doubt. Ignoring it would be a retrograde step. But whatever that is happening on this front is elitist in nature. Only the top ten per cent of the society stands to gain.

The decision-making process in both government and industry is still rooted in files. So basic issues have to be addressed first in a country like India.

However, this is not happening. Focus is on gimmicks like WAP-enabled mobile phones. People are losing sight of the larger picture. Things are being done for the benefit of the creamy layers of society. Not many companies are inclined to ensure that technology gets wider acceptance.

On privatisation of the telecom sectors in India:

Recently, the government opened up domestic long distance telephony. Is this really required? I'm not against privatisation. But privatisation must be sensible. In India, it is being done in desperation because we have to fall in line with the World Trade Organisation's rules.

India has not prepared itself well for the WTO regime. So we are not treating the disease (lack of long term planning and vision), we are merely treating the symptoms (sale of sick PSUs).

Competition must be on an equal footing. While the public sector is forced to embark on non-profitable, populist projects, private sector companies are free to choose their ventures. What is their contribution to society? And every time they have a problem, they cry and extract a concession from the government.

On the contributions of the public sector and private sector units:

There is too much of public sector bashing in India. The government may not have done much in terms of introducing ultra-modern services. But what have private companies achieved? They are not really customer-oriented as they claim. So many of my mobile calls slip. There seems to be no remedy. Private corporates have never taken the kind of risks PSUs took to serve people.

Software companies and associations take credit for putting India on the map of world business. They also mouth slogans like DoT hatao, desh bachao. But has anyone realised that all these companies, including high-profile ones like Infosys and Wipro, could have never hit big-time but for the basic infrastructure provided by VSNL?

Public sector companies can achieve much more if only the government trusts its own chairmen, managing directors and CEOs. While the Prime Minister's Office seems responsive to requests for meetings from heads of even small-time private companies, heads of PSUs are routinely ignored.

This often hampers the PSUs' growth plans and affects their performance. The government has no business in denigrating taxpayers' money this way.

On the governmental dithering and indecisiveness and how it affects India:

When the Internet was introduced in India in 1995, China was way behind us in this field. Today, it is way ahead of us. For India to be among the top countries, the pace of development has to be faster and sustained over a long period of time. India lags behind because we do not allow companies to do what they want to do.

For instance, VSNL wanted to introduce toll-free dialing long time back. But the idea was struck down. Had it been okayed, Internet nodes all over the place today would not have been necessary.

Likewise, VSNL was to tie up with British Telecom to put up a regional hub (switch) to handle international traffic on a transit basis between South Asian countries on the one hand and West Asian and European countries on the other. The industry ganged up with some bureaucrats and killed the project. Had the project been allowed to materialise, VSNL would have been worth $ 25 billion to $ 30 billion today.

Now the selfsame guys are pleading for the Sankhya Vahini project, which would have been unnecessary had VSNL tied up with British Telecom. The government-controlled company has brought in foreign exchange worth $ 6 billion since 1991. VSNL is the only company to have raised $ 500 million via GDRs (Global Depository Receipts). But this is seldom recognised and appreciated.

On the telecom scene in India:

Although there are news reports about VSNL and MTNL entering basic and mobile services, I don't think they will be allowed to do that on a big scale. The private sector companies are lobbying against them. They do not want these established PSUs as competitors. And the powers-that-be are in their grip.

I'm against breaking VSNL's monopoly in international telephony just for the sake of breaking monopolies. The main grouses against VSNL are that tariffs are high and customer service is poor. But does VSNL decide tariffs? No. TRAI (Telephone Regulatory Authority of India) decides them. As for service, the private companies are no better.

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