25 Years of Mobile Phones in India

July 31, 1995. The first mobile call was made in India. It was pretty expensive and not a whole lot of people could afford it. The numbers kept growing but not at the fast enough rate.

In February 2003, IIT Madras was hosting the National Conference on Communications (NCC 2003). At the end of the conference, they organized an event titled as "2010 lakh connections by 2010." The goal was to do brainstorming on what all should India do so that by the year 2010, we have 201 million mobile connections in the country. I don't remember the number of connections in Feb 2003, but perhaps they were only around 20 million, and we were talking about an order of magnitude increase in 7 years.

The event turned out to be not so much of a brainstorming event, but more of an echo chamber. There was a clear agenda. The initial speakers said that the only way to reach that number was to reduce the cost of telephony. The only way to reduce the cost of telephony was to reduce the price of network equipment. And the only way to reduce the price of network equipment was to have indigenous research, the way C-DoT had helped reduce the price of network equipment. It is not that the event only had communication engineers. There were economists who would give a lot of data on how GDP is changing, how per capita is changing, and what is the disposable income, and at what price point, we can have 201 million connections. The sociologists would argue how important (or less important) voice is compared with other expenses viz., education, health, etc. The bottomline was that every speaker was supporting this theory that the only way to get to 201 million connections within 7 years was to reduce cost of network equipment by doing indigenous research.

I wasn't a scheduled speaker in the event, but during the lunch, I requested the organizers to give me just 5 minutes in the afternoon. Given that all of them were professional colleagues, they agreed. And I had a very different take on this.

I said that China had 201 million connections around 1998 (or so, I may be slightly off now after so many years). Will we have same per capita income in India in 2010 as China had in 1998. Similar, if not exactly the same. Will we have similar population in 2010 as China had in 1998. 201 million means that we should be only looking at middle class, and not the poor. Do the middle class in India value voice in the same way as middle class in China. Most probably, yes. Would the cost of technology in 2010 in India be similar to cost of technology in China in 1998, even if we did ZERO research. Well, it ought to be a fraction, since in 2003 itself the cost of technology in India was lower than the cost of technology in China of 1998, and worldwide, it was going down.

Then where is the problem. And I said, the problem is in different regulatory environment. China had free incoming while we did not at that time. And there was a problem in the sector since Reliance Infocomm was offering a mobile like service through a limited mobility license based on Wireless in Local Loop technology. This was being contested in TDSAT, and till this case was resolved, our major mobile players were not willing to invest a large amount of money in expanding their network. I said that if government can somehow have an out-of-court settlement with Reliance, and TRAI were to make incoming free, we will have 201 million connections by 2009. I further added that I wasn't against research which ought to be supported, and may be if we can have some quick breakthroughs, we can achieve this target by 2008 itself.

(Incoming free was already there on the same network, in-state calls, but voluntarily by cellular operators, not through a TRAI directive. Just a week before this event, private cellular operators had announced that they will soon offer incoming free across their networks by having a small additional charge. But this set did not include Reliance, MTNL and BSNL, and landline to mobile was not free even in these packages. But these developments were a hint that free incoming was a possibility and would not impact cellular operators in a big way. They were waiting for some rationalization of interconnection charges before making a fully incoming free regime.)

The rest of the afternoon was spent in bashing me up. Speaker after speaker will point out that I am neither a communication engineer, nor an economist, nor a sociologist, and I was speaking as an ill informed lay man. It was as personal as you would ever see in a scientific event. (Admittedly, I was none of those, but I was interested in telecom regulation in those days, and as a hobby, I would read every paper brought out by TRAI in India, and FCC in US, and a few other countries. So I had some idea of regulatory issues.)

When I came back to IIT Kanpur, I told the story to Prof. Dhande, the then Director of IIT Kanpur. A few days later, Mr. Arun Shourie was visiting IIT Kanpur, and Prof. Dhande requested him to listen to me for 5 minutes. He had assumed the role of Minister of Telecom only in January, 2003 from Mr. Pramod Mahajan and the issue of low network growth was one of the major challenges he was asked to resolve. He gave me an appointment and we ended up talking for almost half an hour in the Visitors' Hostel of IITK. He mentioned to me that he was getting similar advice from a lot of different sources, but I was the first IIT Professor who was suggesting this. Everyone else he had talked to would only talk about R&D. IITians didn't talk about policy and regulation back then. He wanted me to come to his office in Delhi where I should speak for 5 minutes to members of Telecom Commission, which I did.

Over the next several months, TRAI did make the incoming free, and the Reliance Infocomm did agree to pay for the so-called Unified License. And the rest as they say is history. The telecom growth became very quick, and indeed we touched 201 million connections by 2009.