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COAI’s Rajan Mathews Bats For New Method For Mobile Data Pricing

Rajan S Mathews, director general of the Cellular Operators Association of India (COAI), in an exclusive interview with Akrita Reyarspoke on a range of issues, including 5G, the call-drop problem, distress in India’s telecom sector and so on. He also said that inflight Wi-Fi services could be a reality within a year.

Akrita Reyar: You have said that the 5G is not the future. But it is now. Could you please elaborate?

Rajan S. Mathews: On the 5G issue what we said is MIMO (Massive In and Massive Out) technology, which was supposed to be a 5G technology, is already being implemented and utilised into our networks. So I think what we will see is, for example, narrowband 5G. There is a lot of stuff on IoT (Internet of Things) that does not require a massive amount of 5G spectrum, but we can begin to start doing (this) on our 4G networks as well. So already some of these are the examples of what I talked about 5G not being tomorrow.

Akrita Reyar: But as far 4G is concerned, there are issues still. There is a huge problem of congestion in the night. How do we resolve the problem?

Rajan S. Mathews: I think one of the data points that you saw is that we are in the top five countries in terms of the availability of 4G networks. That is saying something in terms of the number of investments that have been made in our networks by our operators. Cleary all operators globally have a challenge trying to meet peak demand. Now you look at your electricity grid – on a hot day when the thermometer goes up to 40 degrees you have blackouts and brownouts, so one ought to expect that in those types of high demand situations there will be some experience (of congestion).

The operators are trying to deal with it. One of the things we are trying to deal with is enhancing them the right away, putting up more cell towers. It’s been a challenge in major cities like Delhi, Bombay, Bengaluru and Hyderabad. We have been trying to provide more capacity in terms of putting fibres because with these types of demand for data, fibre has to be there. We have looked at E-bands and V-bands as a surrogate – in terms of trying to use as a backup that has not been approved by the DOT as well. So there are some roadblocks that stand in the way of helping us to be able to meet the successive demand.

Akrita Reyar: What about policy and regulation. Has policy, in terms of licence fee and spectrum charges, kept abreast with the breathtaking pace of growth of mobile penetration and growth in the telecom sector?

Rajan S. Mathews: Yes, I think in all countries globally, if you ask any operator, they will always tell you that the policy and the regulations are two years behind technology – that’s just the nature of the beast. Our technology is changing so fast. The government has done a very good thing in terms of articulating (its vision) in the National Digital Communications Policy (NDCP), the wishlist of all the stakeholders. I think that it is a phenomenal document from a policy perspective. I think we have got a clear roadmap for the next three-plus years. Question is how do we implement against that. There is a 100-day programme that has been worked out by the government and we’ve provided inputs into that. So we are hoping that the new government as soon as it comes in will take those actual action items and begin to roll it out and then the policy becomes reality – both policy-wise and regulation-wise.

Akrita Reyar: In terms of pricing, do you foresee rates going up? Reliance has taken its foot off the pedal and other telecom companies are under stress.

Rajan S. Mathews: I think first of all, yes, the tariffs are not sustainable in the long term interests of the consumer or the industry – so we had to move upwards. Before 4G came in, customers were paying Rs 180 per month. So affordability is not a factor anyway. I think there is headroom to be able to look at tariffs but we have come to a point where voice is free and data has been more or less commoditised. I think operators will look at alternative means – say off-peak pricing to peak pricing, looking at apps that will be charged, looking at value-added services that will require some type of added connectivity and added pricing. For example, offering Netflix, offering insurance policies – bundling those types of things and trying to increase the pricing through value-added services by giving a greater value.

So I think we won’t see a significant increase in the data prices because it is kind of commoditised, unfortunately. But there are other major avenues like looking at the enterprise. Enterprise is looking for a larger bouquet of services – affordable, but also robustness, reliability, ubiquitousness, uptime, integration into their supply chains. So we are looking for a greater value proposition. Operators will be looking at IOT, Machine to Machine, cloud computing – all technologies that are opportunities for enhancing revenues.

Akrita Reyar: By when can we see in-flight Wi-Fi becoming a reality?

Rajan S. Mathews: From a technology perspective it’s already there. But it might become a reality, say, in the next 12 months. Because first, we have to outfit your aeroplanes. The aeroplanes have to invest and they have to price it – and invariably it’s not a cheap issue. So the business model has to be there but as a practical measure, the issue is more in the hands of the airlines than it is in the hands of the operators. The operators obviously have terrestrial networks and it’s not a whole lot but outfitting aeroplanes is the expensive part and pricing it.

Akrita Reyar: I cannot let you go without asking this. Tell us a little about your Afghanistan experience. As president of the Afghan Wireless Communications Company, you set up that country’s largest and most profitable telecommunications company.

Rajan S. Mathews: When we went to Afghanistan in 2003-2005, there were about a 1,000 landlines – the rest had all been demolished. The US government and the Afghan government said one of our primary objectives was to roll out the network to as many places as many we can. So before I left we rolled it to about 70 cities and towns all over Afghanistan so folks could have an ability to connect.

Now the thing that was really astounding to me was that in a country like Afghanistan, the average revenue per user was USD 73, unbelievable! Compare it to Rs 2 to 3 in India. The demand was so high and as we rolled out the networks, people were willing to pay because they found such great value. A total of 5 million people from Afghanistan had migrated to Pakistan or Germany, so there was a lot of demand for long distance and international calling, which is part of the reason why the price was so high. And again when people wanted to keep in touch, they didn’t have to walk two days to get to a telephone and make a call to a loved one.

So that whole pent up demand was so great and there were only two operators – Roshan and Afghan Wireless. Today they have five or six, so I am sure the numbers have come down. But it was a phenomenal experience and I think the greatest joy that I had was in nation-building. To see the happiness on the faces of people for the first time they heard the actual voices of their son, daughter, spouse. And they all of a sudden had video connectivity; and a grandparent could see a grandchild for the first time on video. To me, it made it all the more worthwhile.―Times Now

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