http://www.rediff.com/news/2005/may/10rajeev.htm
Rajeev has a way of telling it.Even if most of us know & have practically seen this happening in front of our eyes we lack the ability to put it so neatly. The telecom revolution is one "mini-miracle" as RS puts it in this brilliant essay.
The plenty that competition has wrought
May 10, 2005
India has crossed the 100-million mark in telephone lines, both landline and wireless put together. This means a teledensity of 9 per 100 population, that is one out of every 11 Indians on average has a phone connection. To those accustomed to American and European teledensities of over 100, that is there are more phone lines than people, this may not seem like a big deal, but in India's context, it is a minor miracle: for only ten years ago, there was only 1 phone per 100 Indians.
A revealing chart in the Indian media ('Phone connections cross 10-crore mark,' The Hindu Business Line, April 14, 2005) had the figures below. The growth shows no signs of slowing down, and another 150 million lines are likely to be added in the next three years. India has the fifth largest telecommunication network in the world, after China, the US, Japan and Germany. In the near future, India is likely to move up a few spots.
Year
Teledensity (phones per 100 people)
Total connections (millions)
Landline + WLL
(million)
Cellular (million)
1948
0.02
0.08
0.08
0
1951
0.03
0.10
0.10
0
1961
0.08
0.33
0.33
0
1971
0.18
0.98
0.98
0
1981
0.31
2.15
2.15
0
1991
0.60
5.07
5.07
0
1997
1.57
14.88
14.54
0.34
1999
2.33
22.81
21.61
1.2
2000
2.86
28.53
26.65
1.88
2001
3.53
35.29
32.71
3.58
2002
4.29
44.96
38.53
6.43
2003
5.11
54.62
41.93
12.69
2004
7.08
76.54
50.39
26.15
2005
9.13
100.27
58.81
41.6
CAGR 2000-05
26%
29%
17%
86%
The astonishing growth rate in cellular connectivity, ignited by private carriers, has made these numbers possible. To give credit where it is due, the ex-monopoly public-sector carriers have also shaped up and started competing, although they still demand special treatment in the 'interests of the public'. And deregulation has been the key in India as it has been elsewhere. But there are differences. India, which used to have an utterly inadequate telephone network before deregulation, is now moving towards having a half-way decent system.
The US, which used to have one of the best networks under the undivided Bell System, continues to have a great system, but hypercompetition has set in, making it difficult to make any money. Of course, hyperinvestment preceded the bursting of the dot-com bubble: $50 billion of venture capital money was poured into optical communication systems, and that has sunk without a trace.
In Europe, in a rare instance of regulatory guidance proving beneficial, the unified GSM standard has made it easy for travellers to roam; although there is criticism that GSM has become rigid and has not evolved as rapidly as CDMA has in the more chaotic American environment.
In India, demand is not the constraint; supply has been. Under the old system of quotas and permits, ruled over by a self-perpetuating and bribe-seeking bureaucracy, telecommunications was seen as a scarce good to be rationed. This regressive idea persists: in India you have 'volume penalties' instead of 'volume discounts'. That is, if you are a good customer, making a lot of calls, you get penalised: the price per call goes up as your volume goes up. The scarcity-economy model perpetuated by socialist entities such as the Planning Commission encourages bizarre ideas about demand and supply.
From the point of view of the ordinary person in India, the changes brought about by the improved telecommunication system are very positive. Telephones used to be hard to come by. For instance, when I was growing up, we lived in a neighbourhood of perhaps thirty households in a medium-sized city, and only one person had a telephone in their home, and all his neighbours gave out his phone number for them to receive critical calls, thus bothering this poor person.
If you applied for a line, it took five or six years for it to be sanctioned: a classic socialist economy. The powers-that-be made it clear that until everyone could afford a phone, nobody really should have one, and you ought to be ashamed of yourself for asking for a phone when so many people don't even get a square meal. You slunk away, shame-faced, feeling like some kind of heartless Scrooge.
There were also no public telephones. You depended on the kindness of shopkeepers to use their phone to call home in case of emergency and you were one of those evil capitalist individuals who had managed to get a phone at home. Of course noble socialist bureaucrats and politicians had arrogated to themselves the right to get phones for 'official' purposes, even after they retired.
The first revolution happened when the regulators threw open ownership of so-called 'Public Call Office' to various groups of people, especially the handicapped. This pay-phone with an attached attendant rapidly became a fixture in every neighbourhood except in the more remote villages. In an unintended irony, PCOs became the biggest ever employment-generator in a country that had wasted billions on dim-witted employment schemes that came to naught.
In an article in the Harvard Business Review some years ago, Sam Pitroda, a telecom entrepreneur who made a fortune in the US and was the architect of new rural exchanges designed in India, pointed out how farmers in remote villages increased their economic efficiency as soon as phones were available to them. For instance, they could schedule city-based truckers to pick up their produce, or to deliver fertiliser, something hitherto impossible.
The second revolution took place when the regulators decided to allow a number of cellular licensees. Even though there were teething troubles, GSM and CDMA as well as wireless-local-loop limited mobility systems are available over the counter today, no waiting and no guilt-trips required. You get your connection more or less instantly. As can be seen from the table, cellular systems have proven remarkably popular; you see them wherever you go. On trains, on the street, there is the persistent chirp of mobiles, and plenty of distracted, staring-into-the distance users thereof. Some drive two-wheelers, dangerously and illegally, one hand glued to mobile and ear.
People have put mobiles to ingenious uses, and lower income groups have taken to them with a vengeance. For instance, the person who plucks coconuts for my parents can now schedule his time efficiently; so can small-time taxi drivers. The most startling example comes from fisherfolk along the west coast, especially Kerala. There is continuous connectivity on land because it is densely populated. Smart fishermen in small country craft found that this coverage extends out to sea for a few miles as well; and started carrying their mobiles with them for emergency calls and storm warnings.
But then they realised another major benefit: disintermediation. They could call wholesalers directly from out at sea, fix the price, and sell the catch before they landed, instead of being cheated by middlemen. Furthermore, they could set sail for the fishing port where their catch would earn the most. And finally, they could choose to only catch whatever was in demand. Thus their investments in mobiles have paid off handsomely.
Telecommunications in India is a classic study in the benign results of letting people choose what they want, instead of allowing the dead hand of economic planning to dictate terms.
Rajeev Srinivas
in rediff.com May-10-2005
Tuesday, May 10, 2005
Monday, May 09, 2005
World's Richest Islamic Nation
A good article on freebox
Brunei or Bust
BY JEREMY HUREWITZ
TRAVEL | 5.13.2004
Quick, name the wealthiest Islamic country in the world. Saudi Arabia, you say? Wrong. Kuwait? Guess again. In terms of standard of living, the Sultanate of Brunei is the leader among Muslim countries.
Located in a remote corner of the island of Borneo and cut in two by a sliver of the Malaysian state of Sarawak, Brunei has been blessed with huge reserves of oil and natural gas. This wealth has made the Sultan of Brunei one of the world's richest men. Tales of extravagance from the royal family are the stuff of legend. Sultan Hassanal Bolkiah hired Michael Jackson to perform at his 50th birthday party and Whitney Houston provided entertainment at his daughter's wedding (the same daughter who received a private jet for her 18th birthday). Italian sports cars, polo and rumors of harems around the world gave rise to a legendary profligacy that would make even a Saudi prince blush. Things came to a head, however, when the Sultan's younger brother, Prince Jefri, put the country's finances in serious jeopardy through his outlandish spending and ill-advised investments. Some estimate that Prince Jefri cost the country over $7 billion; as one person in Brunei put it to me, the prince has since been "grounded."
The Sultan has been generous to his subjects as well. You're not likely to find another monarch who has provided his people with an amusement park such as Jerudong Park, which has been described as a "cross between an Arabian Night's fantasy and Disneyland," free of charge. Furthermore, the people of Brunei pay no income tax, receive free health care and education, subsidized housing, and generous pensions for the elderly.
All of which could explain the utter docility of Brunei's people. Considering both its reputation for a more conservative interpretation of Islam than its neighbors—Malaysia and Indonesia—and its fabled wealth, I wondered if I would find in Brunei a hotbed of fundamentalist sympathies and a potential source of funding of extremist causes. What I found were people who spoke with deference of their monarch, who avoided just about any talk of politics, and who continuously stressed the peace of their country, Brunei Darussalam, or "abode of peace."
In the country's capital, Bandar Seri Begawan, I visited the town's main mosque, Masjid Sultan Omar Ali Saifuddin. The mosque was built in 1959 by the current Sultan's father of granite imported from Hong Kong, tiled with marble from Italy; its prayer rugs came from Iran and its chandeliers from England.
Everyone I encountered in Brunei was extremely friendly. My water taxi driver gave me a big thumbs-up sign when I told him the country of my birth as we raced around the traditional houses on stilts that comprise the water village Kampung Ayer. A naturalist told me fondly of his visit to California as he guided me through mangrove swamps in search of one of Borneo's treasures, the Proboscis Monkey, an endangered monkey that is the world's largest and found only on Borneo.
But though everyone I spoke to was keen to stress the stability and peace of Brunei, the situation is bit more complicated than that. Dissent is not tolerated in the Sultanate and constitutional freedoms have been suspended since the Brunei Revolt of 1962.
As is so common in history, a tiny country was caught between two much larger countries, Indonesia and Malaysia. When Brunei moved towards joining the Malaysian Federation under the guidance of its British protectors, the strongman of Indonesia, Sukarno—who had dreamed of making Malaysia, Singapore and Brunei a part of a "Greater Indonesia"—cried foul and mobilized elements of the army based in the Indonesian state of Kalimantan, also on the island of Borneo. He took advantage of the Sultan's hesitancy to join the federation and sent his troops in to stir up unrest. The Sultan appealed for British help and British and Gurkha troops were mobilized from Malaysia and Singapore by air and sea to help stifle the unrest. During the violence, the Sultan suspended rights from the British-authored constitution and soon after finally opted to stay out of the Malaysian federation with guarantees of British protection in place to mollify his concerns about his rapacious neighbors, a security arrangement which still stands today.
Brunei finally became officially independent in 1984. Shortly before my visit, the Sultanate celebrated its twentieth year of independence. "All citizens of the world seek peace, of which we possess now," Sultan Bolkaih boasted to his subjects. But when I asked Abu Sufian Ali of the Ministry of Foreign Affairs why the country is still in the state of emergency declared during the Brunei Revolt, he just grinned embarrassedly and said, "The most important thing is to live in a peaceful environment." I asked him what Brunei has done to prepare the country for the possibility that oil and gas reserves will eventually run out and he told me that "experts" have been predicting these sources would run out for twenty years but "it is still down there." When pressed, he said, "We have an agency that invests abroad" to ensure the financial well-being of the country. The agency invests in "hotels, investment funds and bonds," but there was no way for me, or citizens of Brunei for that matter, to find out about this agency's specific assets or what is done with the profits.
When I met with the Haji Bujang Haji Masu'ut Director of the Information Department of the Prime Minister's office, he seemed to willing to do just about anything for me aside from give me information about the government. He ignored or deflected my questions about the government altogether, instead inquiring about my hotel. So persistent was he in automatically turning my questions about political affairs to questions of my accommodation, that I realized that despite his solicitous manner he was unhappy that a journalist had come to the country without formally registering with his office, a step I had never heard of but one which he suggested was routine.
While this tiny country is certainly peaceful, it is also a somnolent place where nightlife consists of hanging out in front of the KFC or playing video games at home, it comes at an Orwellian cost. Last month the country jailed without trial two retired military and police intelligence officers for leaking government secrets. The supposed state secrets were posted at www.bruclass.com, but were quickly edited to remove the offending secrets. Only wordy complaints of bureaucracy and corruption remained.
The government does not tolerate criticism of Islam or the Monarchy, so it was of little surprise to followers of the country's affairs when the memorandum released by the Internal Security Department claimed that the accused took part in actions "which were of a subversive nature and are detrimental to the country's stability and security."
There would certainly be no protests rocking the streets of Bandar Seri Begawan. But Mr. Ali did hint that his government had new thoughts on democracy. Perhaps he felt bad about ducking my questions politics when he suggested an evening tour of the capital in his car. As we passed the magnificently lit up mosques around the capital, he told me of the government's interest in the political systems of Malaysia and Singapore. He asked me my opinions on the governments of those countries and told me that Ministry of Foreign Affairs was studying their models, often called "benevolent dictatorships" or "managed democracies", with an eye towards greater civil liberties for Brunei in the future. It was hard to tell if he was trying to distract me from his evasive answers to my awkward questions. But with a robust election season underway in neighboring Malaysia and Indonesia, he was right in noting, "In this globalized world we can't avoid looking at these questions."
Brunei or Bust
BY JEREMY HUREWITZ
TRAVEL | 5.13.2004
Quick, name the wealthiest Islamic country in the world. Saudi Arabia, you say? Wrong. Kuwait? Guess again. In terms of standard of living, the Sultanate of Brunei is the leader among Muslim countries.
Located in a remote corner of the island of Borneo and cut in two by a sliver of the Malaysian state of Sarawak, Brunei has been blessed with huge reserves of oil and natural gas. This wealth has made the Sultan of Brunei one of the world's richest men. Tales of extravagance from the royal family are the stuff of legend. Sultan Hassanal Bolkiah hired Michael Jackson to perform at his 50th birthday party and Whitney Houston provided entertainment at his daughter's wedding (the same daughter who received a private jet for her 18th birthday). Italian sports cars, polo and rumors of harems around the world gave rise to a legendary profligacy that would make even a Saudi prince blush. Things came to a head, however, when the Sultan's younger brother, Prince Jefri, put the country's finances in serious jeopardy through his outlandish spending and ill-advised investments. Some estimate that Prince Jefri cost the country over $7 billion; as one person in Brunei put it to me, the prince has since been "grounded."
The Sultan has been generous to his subjects as well. You're not likely to find another monarch who has provided his people with an amusement park such as Jerudong Park, which has been described as a "cross between an Arabian Night's fantasy and Disneyland," free of charge. Furthermore, the people of Brunei pay no income tax, receive free health care and education, subsidized housing, and generous pensions for the elderly.
All of which could explain the utter docility of Brunei's people. Considering both its reputation for a more conservative interpretation of Islam than its neighbors—Malaysia and Indonesia—and its fabled wealth, I wondered if I would find in Brunei a hotbed of fundamentalist sympathies and a potential source of funding of extremist causes. What I found were people who spoke with deference of their monarch, who avoided just about any talk of politics, and who continuously stressed the peace of their country, Brunei Darussalam, or "abode of peace."
In the country's capital, Bandar Seri Begawan, I visited the town's main mosque, Masjid Sultan Omar Ali Saifuddin. The mosque was built in 1959 by the current Sultan's father of granite imported from Hong Kong, tiled with marble from Italy; its prayer rugs came from Iran and its chandeliers from England.
Everyone I encountered in Brunei was extremely friendly. My water taxi driver gave me a big thumbs-up sign when I told him the country of my birth as we raced around the traditional houses on stilts that comprise the water village Kampung Ayer. A naturalist told me fondly of his visit to California as he guided me through mangrove swamps in search of one of Borneo's treasures, the Proboscis Monkey, an endangered monkey that is the world's largest and found only on Borneo.
But though everyone I spoke to was keen to stress the stability and peace of Brunei, the situation is bit more complicated than that. Dissent is not tolerated in the Sultanate and constitutional freedoms have been suspended since the Brunei Revolt of 1962.
As is so common in history, a tiny country was caught between two much larger countries, Indonesia and Malaysia. When Brunei moved towards joining the Malaysian Federation under the guidance of its British protectors, the strongman of Indonesia, Sukarno—who had dreamed of making Malaysia, Singapore and Brunei a part of a "Greater Indonesia"—cried foul and mobilized elements of the army based in the Indonesian state of Kalimantan, also on the island of Borneo. He took advantage of the Sultan's hesitancy to join the federation and sent his troops in to stir up unrest. The Sultan appealed for British help and British and Gurkha troops were mobilized from Malaysia and Singapore by air and sea to help stifle the unrest. During the violence, the Sultan suspended rights from the British-authored constitution and soon after finally opted to stay out of the Malaysian federation with guarantees of British protection in place to mollify his concerns about his rapacious neighbors, a security arrangement which still stands today.
Brunei finally became officially independent in 1984. Shortly before my visit, the Sultanate celebrated its twentieth year of independence. "All citizens of the world seek peace, of which we possess now," Sultan Bolkaih boasted to his subjects. But when I asked Abu Sufian Ali of the Ministry of Foreign Affairs why the country is still in the state of emergency declared during the Brunei Revolt, he just grinned embarrassedly and said, "The most important thing is to live in a peaceful environment." I asked him what Brunei has done to prepare the country for the possibility that oil and gas reserves will eventually run out and he told me that "experts" have been predicting these sources would run out for twenty years but "it is still down there." When pressed, he said, "We have an agency that invests abroad" to ensure the financial well-being of the country. The agency invests in "hotels, investment funds and bonds," but there was no way for me, or citizens of Brunei for that matter, to find out about this agency's specific assets or what is done with the profits.
When I met with the Haji Bujang Haji Masu'ut Director of the Information Department of the Prime Minister's office, he seemed to willing to do just about anything for me aside from give me information about the government. He ignored or deflected my questions about the government altogether, instead inquiring about my hotel. So persistent was he in automatically turning my questions about political affairs to questions of my accommodation, that I realized that despite his solicitous manner he was unhappy that a journalist had come to the country without formally registering with his office, a step I had never heard of but one which he suggested was routine.
While this tiny country is certainly peaceful, it is also a somnolent place where nightlife consists of hanging out in front of the KFC or playing video games at home, it comes at an Orwellian cost. Last month the country jailed without trial two retired military and police intelligence officers for leaking government secrets. The supposed state secrets were posted at www.bruclass.com, but were quickly edited to remove the offending secrets. Only wordy complaints of bureaucracy and corruption remained.
The government does not tolerate criticism of Islam or the Monarchy, so it was of little surprise to followers of the country's affairs when the memorandum released by the Internal Security Department claimed that the accused took part in actions "which were of a subversive nature and are detrimental to the country's stability and security."
There would certainly be no protests rocking the streets of Bandar Seri Begawan. But Mr. Ali did hint that his government had new thoughts on democracy. Perhaps he felt bad about ducking my questions politics when he suggested an evening tour of the capital in his car. As we passed the magnificently lit up mosques around the capital, he told me of the government's interest in the political systems of Malaysia and Singapore. He asked me my opinions on the governments of those countries and told me that Ministry of Foreign Affairs was studying their models, often called "benevolent dictatorships" or "managed democracies", with an eye towards greater civil liberties for Brunei in the future. It was hard to tell if he was trying to distract me from his evasive answers to my awkward questions. But with a robust election season underway in neighboring Malaysia and Indonesia, he was right in noting, "In this globalized world we can't avoid looking at these questions."
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