Sam Pitroda, founder and first chairman of India’s Telecom Commission, is called the father of telecom in India. In the mid-1980s, before mobile phones came in, he revolutionised the sector with the idea of STD booths. Here are his views on the state of the sector, as told to Jyotika Sood:
India has come a long way, and has been a winner. But the problem is that in the country of 1.2 billion people, we have three operators. We need more players. State-owned MTNL and BSNL were the jewels. But they lost their talent, and abilities to make money and grow. Despite more than one billion mobiles, the industry is not making money because our average revenue per user is very low. Many players had to sell, close or merge. The industry today consists of three major players and that is not good. Companies should have realised the importance of cost-based pricing, as opposed to offering everything free to entice the consumers. When one player offers free services, it affects the others. So, the service providers that had higher tariffs suffered. This created a problem. Subscribers moved from one account to another account, and then to another. There has to be some relationship between prices and costs.
If the industry has to survive in the long run, people have to pay. You cannot not pay and expect good services. The quality of service has suffered. Call drops are very high. But if tariffs are low, why will an operator invest in the networks? Operators are unable to expand because people are not paying. It’s a vicious circle. Someone has to pay—the government cannot because it doesn’t have the money. Let’s accept the reality that tariffs need to go up by 5-10 per cent every year.