- 5 months ago
In this episode of the Outlook Business Podcast, Parag Kar, a leading telecom expert, sits down with Deepsekhar Choudhury, Associate Editor, Outlook Business, to unpack some of the biggest questions shaping India’s telecom landscape today.
The conversation explores how Indian operators are relying on partnerships with global satellite players instead of building a sovereign satcom infrastructure, and what the economic and security risks of this dependency could be. Parag also explains the complexities of developing indigenous capabilities and why it is such a difficult and costly endeavour.
On the consumer side, the episode delves into the persistent challenge of 5G implementation in full force and monetisation in India, why telcos are struggling to translate network upgrades into revenue, and why users have not experienced a significant speed jump from 4G to 5G in their daily lives. Has consumer internet speed plateaued, or are there still leaps ahead waiting to be made?
Finally, Parag reflects on how Indian telecom has effectively become a duopoly, what keeps new players from entering such a high-stakes market, and whether BSNL can have a meaningful role in the sector’s future.
This is a deep, insightful conversation on the intersection of technology, business, and geopolitics in India’s telecom sector—one you don’t want to miss.
The conversation explores how Indian operators are relying on partnerships with global satellite players instead of building a sovereign satcom infrastructure, and what the economic and security risks of this dependency could be. Parag also explains the complexities of developing indigenous capabilities and why it is such a difficult and costly endeavour.
On the consumer side, the episode delves into the persistent challenge of 5G implementation in full force and monetisation in India, why telcos are struggling to translate network upgrades into revenue, and why users have not experienced a significant speed jump from 4G to 5G in their daily lives. Has consumer internet speed plateaued, or are there still leaps ahead waiting to be made?
Finally, Parag reflects on how Indian telecom has effectively become a duopoly, what keeps new players from entering such a high-stakes market, and whether BSNL can have a meaningful role in the sector’s future.
This is a deep, insightful conversation on the intersection of technology, business, and geopolitics in India’s telecom sector—one you don’t want to miss.
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TechTranscript
00:00:00Cheap data is the necessity for the telecom operators in order to drive their revenues.
00:00:05If you need a global positioning system for your weapons to be able to be more effective,
00:00:09you can't rely on foreign global positioning satellites.
00:00:12We should have our sovereign satellite infrastructure just like other countries are having.
00:00:16In case of war, it is important that India should not lose the leverage.
00:00:20What happened in Kargil?
00:00:22You were using GPS, suddenly the GPS network was put off, right?
00:00:25That's why we came out with NAVIC.
00:00:26Operating satellite networks at the scale which Starlink is doing requires huge amount of investment.
00:00:33You can't deploy infinite number of satellites compared to the number of base stations that you can deploy.
00:00:383G already seeded the data capability.
00:00:414G just enhanced the capability significantly so that people can use those capabilities
00:00:46which has already got developed in the warline ecosystem.
00:00:50What 4G was able to do, 5G was able to do much faster and then it brought another element latency.
00:00:55In the day-to-day experience of people, the users, they said that from 4G to 5G,
00:01:00we have not seen any significant grade of speed.
00:01:05People actually have a misconception that 5G is only speed.
00:01:08Tell me that in your phone, if you do a speed test, you get 300 Mbps or 350 Mbps.
00:01:13What you are doing with that 350 Mbps?
00:01:15You just watch that I am getting 300 Mbps.
00:01:19Hello and welcome to the Escape Velocity podcast by Outlook Business,
00:01:37where we talk to the movers, shakers, thinkers and doers of the tech and startup ecosystem.
00:01:42Today we have with us Parag Kar, a veteran of the telecom industry.
00:01:46Welcome to the podcast, Parag.
00:01:48Thanks for having me.
00:01:49One of the biggest reasons that India's tech and startup ecosystem
00:01:53has grown by leaps and bounds over the last decade
00:01:57has been cheap data enabled by our telcos.
00:02:01Today, telecom companies in India stand at another inflection point
00:02:05with respect to technology, with 5G and satcom coming in.
00:02:11So, today it will be great to understand from your perspective
00:02:15what lies ahead for the industry
00:02:17and what are the big stakes involved in it for the Indian economy.
00:02:21You mentioned about cheap data.
00:02:23Definitely, it is an accomplishment as far as India is concerned.
00:02:26But one is to understand that cheap data is the necessity for the telecom operators
00:02:31in order to drive their revenues.
00:02:33Because what happens is that when you are talking about revenues
00:02:37is a multiple of price and the number of customers that you are serving.
00:02:42So, that is the product.
00:02:43That's how the revenues are generated.
00:02:46Now, if you look at other countries,
00:02:48you will find that their volumes are low.
00:02:50The prices are high.
00:02:52So, in order to justify that investment that the Indian telecom companies are making,
00:02:57they have to drive revenues.
00:02:59Because for that, they have to reduce the price of data to make it affordable.
00:03:03Otherwise, the people are not going to make that kind of consumption.
00:03:07But I want to understand something.
00:03:10Over the last one year, there has been a lot of debate around satcom.
00:03:16You know, telecom industry executives,
00:03:19it seems sometimes they are scared that Elon Musk will come in with his Starlink
00:03:24and do a lot of deep discounting and take away their market share.
00:03:30So, I want to understand what is the entire debate that is going around in satcom.
00:03:36Are telecom players really scared of Starlink?
00:03:41And why are they railing against administrative allocation?
00:03:44See, definitely, satcom may look like a competitive player
00:03:50versus the telecom companies who think that they are paying huge amount of license fee
00:03:56and they have paid for terrestrial spectrum from their nose.
00:04:01And therefore, any competition might disturb the level playing condition is their allegation.
00:04:06Now, you need to understand that satcom business is quite distinct from the telecom business.
00:04:12Why? Because the telecom business runs on a different model,
00:04:17a different kind of infrastructure that they deploy in order to deliver services.
00:04:24Satcom is delivering a completely, totally different type of infrastructure, right?
00:04:29Now, the problem is the following.
00:04:31The basic issue is the capacity.
00:04:35Now, in order for you to deliver services, you need to have capacity.
00:04:40If you don't have capacity, you can't deliver services, right?
00:04:43Terrestrial networks can generate huge capacity compared to satcom.
00:04:49Because satcom is constrained first by the number of satellites
00:04:52and the total amount of spectrum that they are allowed to use to run those satellites.
00:04:57Because the number of satellites are limited.
00:05:00And therefore, even if they have large quantum spectrum,
00:05:03their capacity is quite limited compared to the terrestrial players.
00:05:07Therefore, they can't offer services to a large number of people compared to telecom service provider.
00:05:16As I told you, the telecom service providers in India basically thrive on volumes.
00:05:23If you have volumes, then what happens is that you can offer cheap services to large number of countrymen
00:05:29who have that affordability issue.
00:05:31Now, if you don't have capacity, then what are you going to do?
00:05:35Tell me.
00:05:36You can't.
00:05:37But can't the capacity be built up?
00:05:39Is it a physical constraint?
00:05:41It's a physical constraint.
00:05:42So, that's what I was trying to describe.
00:05:44In case of terrestrial network, it is not a that kind of physical constraint.
00:05:49Let me explain in very simple terms.
00:05:51Why capacity is a bottleneck?
00:05:52Then only everything what I say will make sense.
00:05:55The reason capacity is not a bottleneck for terrestrial player is that the number of base stations which they can deploy
00:06:03is exponentially high compared to number of satellites which can get deployed over the sky.
00:06:10I see.
00:06:10That is the main problem with the satellite players.
00:06:13You can't have a large number of satellites because satellites is a highly regulated sector.
00:06:19The number of slots that are available in the sky is limited.
00:06:22They have to do frequency planning so that there are no interference in the sky.
00:06:27And it is regulated by ITU.
00:06:30It is not a domestic phenomena.
00:06:32So, is there only a finite number of satellites that you can deploy?
00:06:35Yes.
00:06:36You can't deploy infinite number of satellites compared to the number of base stations that you can deploy.
00:06:42For example, I'll give you an example.
00:06:45Today, Starlink has roughly around 5,000 to 6,000 satellites globally.
00:06:49How many base stations that we have on ground in India?
00:06:5430,000,000.
00:06:55Wow.
00:06:56Right?
00:06:56The base station means the towers?
00:06:58Not towers.
00:07:00The tower is the location on which number of base stations for different technologies are deployed.
00:07:06So, the number of towers are roughly around 8,000,000.
00:07:09Right?
00:07:09Location, physical location.
00:07:10And on top of which 30,000,000 base stations are being hosted.
00:07:15The number of base stations means you have capacity.
00:07:17You can use the same spectrum in the different area using the different base station.
00:07:24So, you are doing a multiplier.
00:07:26You have got a finite amount of spectrum.
00:07:28The number of base stations as you increase, you multiply your capacity.
00:07:32Similarly, space players also, Starlink has got some spectrum.
00:07:38And then if you have a large number of satellites, you multiply that capacity.
00:07:41Okay?
00:07:42If you have small number of satellites, for example, I told you there are, let's say, 6,000 satellites.
00:07:48The total number of satellites which are visible at a time over India is what matters.
00:07:54Because you are not going to, because these are all fast moving satellites.
00:07:58Right?
00:07:58They will keep circling the earth.
00:08:00So, what matters is the number of satellites which are visible on top of the surface of earth.
00:08:05Which may not be even 1%.
00:08:08Maybe 60 satellites or 80 satellites the most.
00:08:12That's the constraint.
00:08:14If you have less number of satellites visible simultaneously or at a point to serve Indian consumer versus so many base stations,
00:08:22then you don't have capacity.
00:08:23If you don't have capacity, then you can't drive volumes.
00:08:26If you don't drive volumes and even if you offer affordable services, let's say, 800 rupees, your revenues are going to plummet.
00:08:34And there will be a quality issue.
00:08:36So, you are saying of the deployment of Starlink, which is around 5,000 or 6,000 satellites,
00:08:42only 60 to 80 satellites can be visible from an Indian perspective, from India.
00:08:50So, only 60 or 80 of them are operational if Indian users kind of use them at any point of time.
00:08:56Correct.
00:08:57So, physically, what would be the range of the maximum number of satellites that, let's say, tomorrow,
00:09:03some Indian players start beaming some satellite spectrum from the space.
00:09:10So, what is the maximum number of satellites that can look at India and, you know, operate for Indian consumers?
00:09:17See, look, we can't really talk about any limit right now, but it will be very, very low
00:09:23compared to the number of base stations that you can deploy on ground.
00:09:27Will it be in thousands or 10,000?
00:09:29No, no, no, no, no, no.
00:09:30That's a very long shot.
00:09:32For example, if you look at Starlink, they probably have a plan to deploy.
00:09:39If you look at their plan, I think I don't have their exact number,
00:09:44but I will be highly surprised if they will be able to deploy 12,000 to 14,000 satellites in next 5 years
00:09:52or 6 years throughout the globe because why this number is that kind of, you know, such a low number
00:10:00because these satellites have to be decommissioned also.
00:10:03These are not going to remain in the sky for perpetuity.
00:10:08So, there is a battery or a power that gets exhausted after a certain period of time
00:10:14because you can't power them in space.
00:10:16So, you have to put some battery or some kind of, you know, power
00:10:21to make those signals emanate out of the satellite so that they can be used for communication.
00:10:27So, they can't use solar power and…
00:10:29No, no, no.
00:10:30It has to because not just solar power.
00:10:31You have to, you know, manage their orbit also.
00:10:34Yes.
00:10:35Because Earth is not perfectly round.
00:10:37So, you have to manage the orbit so that they don't collide with each other.
00:10:40So, you need to have rocket fuel in the satellites, right, to change the orbits, you know, on a regular basis.
00:10:48It's not just solar power, you know, for RF communication.
00:10:52So, these satellites have to be decommissioned every 5 years or 6 years.
00:10:57So, the big challenge to keep, you know, launching satellites and decommissioning these satellites
00:11:03versus the base stations will remain on ground for a long period of time.
00:11:07Though, technology will keep on changing, but today we have got base stations which are software upgradable, right?
00:11:13So, you may not even change.
00:11:14So, even if money is not an issue, then over a period of time, let's say 10, 20 years,
00:11:20let's say we have Indian players who also deploy.
00:11:24Even if that happens, we can't get more than a few hundreds.
00:11:27Not more than that because of all these constraints.
00:11:31So, there are multi…
00:11:32See, that's why the terrestrial network is quite different from satellite.
00:11:36People actually don't understand these nuances.
00:11:38Therefore, they start comparing terrestrial way satellite.
00:11:41Thus, the satellite network is pretty challenging.
00:11:45Why it is challenging?
00:11:46Because there are so much regulation involved in satellite.
00:11:49For example, let's say astronomy.
00:11:51If you put satellites with big solar panels, it is going to create such a big noise that
00:11:56the astronomical, you know, activity which is happening from Earth, they are going to completely
00:12:02become unusable.
00:12:04Because in night sky, you will see those satellites having, you know, will start reflecting sunlight.
00:12:11You understand?
00:12:12So, that is where the challenge is.
00:12:13So, this is a phenomenon or the regulation is keep on evolving over a period of time, right?
00:12:19As the number of satellites go on the sky, space debris issues are going to come.
00:12:25Then some satellites may become rogue.
00:12:28They can fall on, you know, on the Earth.
00:12:31And they can, you know, create risk on individuals, you know, or property.
00:12:36So, everything has to be managed.
00:12:37You can't have satellites of very large sizes.
00:12:40There is a limit to the weight of a satellite so that it can burn out in atmosphere.
00:12:47If you keep, make satellites, you know, much, much bigger, then decommissioning those satellites
00:12:52is a big problem.
00:12:53Then you have to manage it, the decommissioning in such a way that it falls in a no man's
00:12:58area, in oceans.
00:12:59So, satellite technology is very, very difficult.
00:13:02It's not an easy thing to kind of go with and run.
00:13:07People with deep pockets, with interest, which is beyond business, they run satellite
00:13:13networks.
00:13:14Beyond business?
00:13:15This means there could be some security interest.
00:13:17There could be interest of ensuring that, for example, in case of war, the terrestrial
00:13:22networks can break down.
00:13:24The satellite networks can keep operating, though there are technology which can keep knock
00:13:27off satellite also from sky.
00:13:29So, for example, Ukraine, if you see, in case of Ukraine, there have been so much amount
00:13:35of destruction which has taken place in the terrestrial network, but satellites are running
00:13:39and therefore Ukraine is able to function.
00:13:42The internet is able to function there, right?
00:13:44But first of all, I want to understand, if Satcom cannot have that capacity, cannot match the
00:13:50capacity of terrestrial networks, then why is the telecom industry so scared about Starlink
00:13:59coming in and what will happen to their market after that?
00:14:04I can't.
00:14:05Yeah.
00:14:05So, what is the reservation?
00:14:08I can't speak on behalf of the telecom industry.
00:14:11I'm giving you the facts.
00:14:12So, what do you think, your assessment of why, where is it that they are getting their
00:14:17evaluation incorrect?
00:14:18I don't know.
00:14:19I really don't know.
00:14:20They should not be worried.
00:14:22Well, I'll tell you the reason why.
00:14:23There are many reasons.
00:14:25The satellite services do not match the terrestrial network services.
00:14:29I'll tell you another reason.
00:14:30It is not about just capacity.
00:14:33It is also about speeds.
00:14:35Now, somebody will say that, oh, satellite, you can deliver easily 100 Mbps, 200 Mbps downlink.
00:14:42Yes, you can.
00:14:43But your uplink speeds are not going to be more than 25 Mbps.
00:14:46Maximum.
00:14:48You go to Starlink's website, you'll see they advertise between 5 Mbps to 25 Mbps uplink.
00:14:54So, for the layman, how do you explain the difference between downlink?
00:14:58Downlink and uplink means that when you are downlink data from the internet or downloading
00:15:02a movie, the amount of time it takes to download that movie depends upon how much bandwidth you
00:15:09are getting.
00:15:09Speed is there.
00:15:10Just like, you know, if you go in optical fiber, how much speed do you need?
00:15:13100 Mbps.
00:15:14Somebody may offer 30 Mbps.
00:15:16But whether it is symmetric or asymmetric.
00:15:19Symmetric means both download speed and upload speed are same, which typically happens in
00:15:25case of optical fiber networks, right?
00:15:27But in wireless networks, the uplink and downlink are not symmetric because the device has got
00:15:34a challenge.
00:15:35Device means on the ground, the device has got a challenge.
00:15:38They don't have that capability from the point of view of antenna design, from the point
00:15:44of view of form factor, then EMF rules, all these comes into picture to prevent that device
00:15:50to drive larger power to reach the satellites.
00:15:56Particularly, our phones don't have enough capability to push data.
00:16:01Correct.
00:16:02So, if you can't push data, then there is no point in giving you symmetrical resources.
00:16:07The uplink and downlinks are always asymmetric.
00:16:10And for satellite, this is a big challenge.
00:16:12Why it's a big challenge?
00:16:13Because if you want to make satellite symmetric, which you can do, then you have to have antennas
00:16:18which are going to be pretty large.
00:16:21Then it is not going to become a consumer-centric device.
00:16:25It will become something which is for enterprise.
00:16:27You have to put a huge dish antenna, right?
00:16:32Because then the dish antenna is going to, you know, focus the power or make the beam so
00:16:36powerful that it can go and hit the satellite.
00:16:39You are dealing with consumer-centric devices, which is easy to install, right?
00:16:43So, because of those challenges, the uplink is always going to be a problem.
00:16:48Because uplink is going to be a problem, therefore, you cannot compete with optical fiber.
00:16:52Okay.
00:16:53So, therefore, it can't be an equivalent service.
00:16:55So, given an option that whether you want satellite, whether you want OFC, OFC is available,
00:17:02people will go for OFC.
00:17:04Even if the prices are the same.
00:17:06Let's say if satellite is being offered 8,000 rupees per month and OFC guys are also
00:17:10offering 8,000 rupees per month, nobody is going to go for satellite.
00:17:12They will go for optical fiber cable.
00:17:14Because at the same price, you are getting both symmetric speeds, uplink and downlink,
00:17:19same, right?
00:17:20Because there is no constraint, right, to drive data, you know, on the upper side, right?
00:17:28In satellite, you cannot be.
00:17:30And why satellite prices are not going to go down?
00:17:33The reason satellite prices are not going to go down is because it will be foolish for
00:17:38satellite players to offer services at a cheaper rate when the volumes are going to get
00:17:43limited by the capacity of their overall system.
00:17:46It will make no sense for them.
00:17:48The math will not work.
00:17:49It is not.
00:17:49Your revenues are going to plummet.
00:17:50You do a math clearly.
00:17:52So, when you multiply two numbers, there is going to be one point where it will be maximum.
00:17:58So, you have to maximize that product.
00:18:03Do you understand?
00:18:04Let's see.
00:18:06But a bit of, you know, you were just talking about how from a security perspective,
00:18:13perspective, also satellites, unimportant satellite communication.
00:18:18So, I want to understand this from you.
00:18:19If you see telecom players in India today, they are partnering with American or European
00:18:27firms who are the actual satellite operators to provide such services in India.
00:18:33So, going forward in the long term, do you think that it is important for us to be able to
00:18:40build such capabilities, operate such satellites?
00:18:45Because if you talk about Ukraine, the Ukraine war, I think what had happened at that time
00:18:50was Elon Musk wanted a certain amount of money for the services he was paying after a period
00:18:58of time.
00:18:58And he said, I will not be able to give this service for free.
00:19:02And he had, I think, switched off the Starlink constellation at some point in time when the
00:19:10Ukrainian soldiers were in the battlefield and they suddenly could not, you know, operate
00:19:17their communication.
00:19:19So, is that a risk that we have if we don't have our sovereign satellite infrastructure?
00:19:26Correct.
00:19:27Absolutely.
00:19:28We should have our sovereign satellite infrastructure just like other countries are having.
00:19:31Because in case of war, it is important that India should not lose the leverage.
00:19:38For example, let me give you an example.
00:19:39Like what happened in Kargil.
00:19:42Right.
00:19:42You are using GPS, suddenly the GPS network was put off.
00:19:45Right.
00:19:46That's why we came out with NAVIC.
00:19:48Right.
00:19:48So, NAVIC is our own system.
00:19:51Nobody can.
00:19:51Now, if you need a global positioning system for your weapons to be able to be more effective,
00:19:57right, you can't rely on foreign global positioning satellites.
00:20:00Similarly, if you really want your communication system to be robust so that it is fail-safe,
00:20:09you are not dependent on terrestrial networks all the time, there could be some issues.
00:20:13We should have the capability to operate satellite networks also.
00:20:17But operating satellite networks at the scale which Starlink is doing requires huge amount
00:20:24of investment.
00:20:25Because it is not just a local phenomena.
00:20:28Because these are not geocentric satellites, geosynchronous satellites.
00:20:33Because there is a difference between LEO satellites, low earth orbit satellites and geocentric satellites.
00:20:40Earlier, everybody was operating geocentric satellite.
00:20:44Means the satellite is fixed on the top of the continent or the country which it is serving.
00:20:51Because the rotational speed of the satellites and the revolution speed of the earth is synchronized.
00:20:58So, that it appears stationary.
00:21:00Okay.
00:21:00Okay.
00:21:01But the...
00:21:01Earth and the satellite don't move.
00:21:03Exactly.
00:21:04Exactly.
00:21:04So, therefore, you need a couple of satellites to cover India.
00:21:07If the satellite is not moving around the...
00:21:10Around...
00:21:11It's not circling the globe.
00:21:13Right.
00:21:13So, a couple of satellites will work.
00:21:16But the problem with that kind of infrastructure or the network is that you can't do seamless voice.
00:21:24You can't do seamless data because the distance of that satellites from the surface of the earth is quite high.
00:21:32It is around 36,000 kilometers in order for the satellites to remain stable on the surface of the earth.
00:21:38Because that is the orbit on which the whole thing works.
00:21:42Because of the distance, the voice will have huge latency.
00:21:46It is not going to be...
00:21:47You know, it's like you and me talking to each other.
00:21:50You have to...
00:21:51When you talk, you have to wait for a couple of seconds.
00:21:54Then the other person will hear.
00:21:56Then it is not going to be a normal conversation.
00:21:59Right.
00:21:59And then the latency is going to be pretty high.
00:22:02That's why these LEO networks came into being.
00:22:05LEO means the satellites are at an orbit which is around 600, 700, sometimes 1,000 kilometers.
00:22:11Now, you can't have in these orbits stationary satellites.
00:22:16Because if you put satellites in an orbit which is lower than 36,000 kilometers,
00:22:22then you have to move them, right, at a rate which is much higher than the revolution of the earth
00:22:28in order to keep the orbit stable.
00:22:31Okay.
00:22:32Yeah.
00:22:33But I don't know.
00:22:34Can you explain?
00:22:35Let me explain.
00:22:36Let me explain.
00:22:36Let me explain.
00:22:37This is a little bit of a technical issue.
00:22:40But let me try.
00:22:41Because the angular velocity is...
00:22:43No, it has nothing to do with angular velocity.
00:22:45It is to ensure that at that level, there is a physical term called centrifugal force.
00:22:53Right.
00:22:54That matches with the force of attraction of the satellite to the center of earth, which is the gravity.
00:23:00So, if an object is there on the surface of the earth, it will always feel a force of gravity, right?
00:23:09Like the apple will fall from tree, right?
00:23:11But in order to keep the apple stable in the orbit, you have to make the apple feel a force which is totally opposite to the gravity, gravitational force.
00:23:22How do you do that?
00:23:24You make it go in a revolution path, in a rotation path, right?
00:23:29So, that's why in 36,000 kilometers, the satellite will remain stationary.
00:23:35Because at that point, the amount of force that earth is putting on that satellite balances with the centrifugal force because of the revolution.
00:23:45That is the speed.
00:23:46So, the farther away it is, the force is lower.
00:23:51It balances out.
00:23:52It balances out.
00:23:53But if you want to put the orbit, make the orbit low or bring the satellite closer to the surface of the earth,
00:24:01in that case, you have to make it move at a much faster speed in order to balance the orbit.
00:24:07That is why the Leo satellites are never stationary on the surface of the earth.
00:24:13They keep on moving at very fast.
00:24:15Since they are moving at very fast rate, you need multiple of them to cover the same geography.
00:24:20Because as soon as one goes, another has to take over.
00:24:23I see.
00:24:24So, like that, you have to have multiple of them, you know.
00:24:26It's like a train which is going, you know, one satellite is moving and another.
00:24:31Another is following it and then another is following it.
00:24:33So, you know, orbit, you have to have multiple of them.
00:24:36You got it now.
00:24:37Yes.
00:24:37That is the problem with the satellite infrastructure and network.
00:24:41So, if you are planning a satellite network, you have to plan the satellite network for the globe.
00:24:45If you want a similar kind of network like SpaceX have developed.
00:24:51If you're just doing it for India, then it has to be based on geostationary satellites,
00:24:57which are kind of stationary on the surface of the earth.
00:25:01But if you're doing Leo, then it is better off to provide service to other countries also.
00:25:05Even if you're saying, anyway, it's going around.
00:25:07So, why won't you?
00:25:08Correct, correct, correct.
00:25:10Got it.
00:25:10That's a very interesting thing.
00:25:12So, if somebody is planning to make such an infrastructure from India,
00:25:17they'll have to compete globally.
00:25:20They can't just think about serving the Indian market.
00:25:25They can think of, they can say that I'm not going to use the global capacity.
00:25:29So, what?
00:25:30But the problem is that, you know, it is not going to make your investment optimal.
00:25:35That's why, you know, Elon Musk is running around India because he has made the investment already.
00:25:40So, India is just, you know, a sometime of a space, you know, you can say dark spot, which he's not able to monetize.
00:25:49If there is a player who plans to kind of put such a constellation of satellites in low earth orbits for SATCOM,
00:25:56So, what is the minimum investment that you have to think about in terms of scale?
00:26:01Is it a billion dollars, 10 billion dollars?
00:26:03Very difficult to say.
00:26:05Because nobody gives you their numbers.
00:26:10The numbers depends upon volumes, how many satellites you are launching, your capability of launch,
00:26:17whether you have got in-house capability to launch or you're borrowing, you know, launch facility from other countries.
00:26:23Though India has developed its own capability to launch satellites, which is very, very good.
00:26:28But I really don't have any numbers.
00:26:31But what you can, you can basically make some extrapolation.
00:26:35In the sense, like, if Starling has got a positive business case,
00:26:39and you can check the number of users that Starling has globally, which is roughly around 4.5 lakhs.
00:26:46Not even, you can say, half a million.
00:26:49Not even a million.
00:26:50Not even half a million.
00:26:52That's why I was very surprised when the minister said that India has got the capability to offer 20 lakhs of subscribers.
00:27:00Yeah.
00:27:00Right?
00:27:0020 lakhs of subscribers is huge.
00:27:03Yeah, I don't understand that.
00:27:04Why are we trying to limit, put a limit on how many users?
00:27:08Because of capacity.
00:27:10Because if you are going to have, let me explain this in much more simpler terms,
00:27:15so that you understand.
00:27:15Let's say if you have a pipe with certain volume, and if you want some, that pipe to be used to serve a residence,
00:27:25and everybody has put a tap on, to draw water from that pipe, okay?
00:27:32Now, in a situation like that, if there are 100 homes,
00:27:36and to ensure that the 100 ohms is getting the supply of water with same speed and pressure,
00:27:43what kind of diameter that you need of the main pipe which is feeding to that residence?
00:27:48So, it's almost like that.
00:27:51But it is a private company, right?
00:27:53That is, I mean, the market forces will...
00:27:56No.
00:27:56A hizical constraint.
00:27:58It is not about my...
00:27:59That's what I said in the beginning itself.
00:28:00See, the volume of the pipe, the diameter of the pipe, is not that you can increase as at your wins and fancies.
00:28:11It's not going to happen.
00:28:12No, I understand that.
00:28:13What I'm trying to ask is, let's say there is a certain amount of capacity.
00:28:18Let's say it's only 1 million users that Starlink can beam to in India.
00:28:23Then, that is a constraint that the company thinks about.
00:28:27Then, why should the government put a...
00:28:31I mean, that will reach an equilibrium between technology and market forces itself.
00:28:36Why should the government...
00:28:38See, how the government came out with that 20 lakh numbers, I can't say.
00:28:41But let me explain to you that what are the constraints on which a company, a Satcom business operates.
00:28:50Satcom business operates on the total quantum of spectrum that is available.
00:28:55Now, spectrum is not available in finite, right?
00:28:58You can't manufacture spectrum.
00:29:00Typically, when Starlink will start their service, they will get a download spectrum of around 2 gigahertz and upload spectrum of around 500 megahertz, right?
00:29:11So, this is typical.
00:29:12It can increase depending upon what new generation satellites are launched and what kind of new bands that they are going to get.
00:29:18Now, this capacity of 2 gigahertz on the downlink side is fixed and the uplink side 500 is fixed.
00:29:29That is point number one.
00:29:31Then, this is a shared spectrum.
00:29:34This is not an exclusive spectrum for Starlink.
00:29:37So, Starlink is not going to leverage the full capacity of this particular spectrum, right?
00:29:43So, others are going to come.
00:29:44Third important point, which should be the second point, is the number of satellites which you can have in this block of spectrum in order to harness that capacity over India.
00:29:55As I told you that it will not go beyond 60 to 80, maximum 100 after 5 years.
00:30:01If 100 is the limit, right, and then you have got 2 gigahertz, you can yourself calculate the number of amount of capacity that you will be able to generate.
00:30:12You will find that the capacity that Starlink is able to generate is going to be a fraction of the total potential of their spectrum had it been used in a terrestrial manner.
00:30:22That's why the satellite service is always a shared spectrum.
00:30:27Otherwise, what would have happened is, if it was not a shared spectrum, then the capacity would have gone waste.
00:30:3495% of the capacity of that spectrum would have gone waste because the number of satellites are limited.
00:30:40So, it is better that you invite another player to use their same capacity.
00:30:44You understand?
00:30:47That is the reason why satellite spectrum is not auctioned.
00:30:51So, it's not unutilized and…
00:30:53Yeah, if you auction satellite spectrum in the manner which you auction terrestrial spectrum,
00:30:58then you have to carve out that 2 gigahertz of spectrum into multiple blocks and give it exclusively to the player who wants to use it.
00:31:07Typically, what we do in case of terrestrial, right?
00:31:09Now, if you break that 2 gigahertz, let's say, into 4 slots of 500 megahertz each,
00:31:16make an assumption that 500 megahertz each will be the spectrum allocated to these 4 satellite players.
00:31:25Now, Starlink will have the capability to offer only 500 megahertz, right?
00:31:30500 megahertz, the download throughput is going to decrease.
00:31:34If you are going to use 2 gigahertz, your throughput is going to depend directly proportional to the bandwidth.
00:31:38So, if you are going to use 500 megahertz, you will never be able to offer 200 Mbps.
00:31:43You will have to offer 50 Mbps now.
00:31:46So, your consumers are unnecessarily going to get choked.
00:31:50So, it is better to give them 2 gigahertz so that everybody is getting 200 Mbps, 100 Mbps, whatever.
00:31:57And anyway, the capacity is remaining unutilized.
00:31:59That is the main difference between terrestrial and satellite.
00:32:05Because terrestrial, you got full flexibility.
00:32:08The tower density, you can plan.
00:32:10You can do coverage-based design.
00:32:12You can do capacity-based design.
00:32:14Right?
00:32:15You have better capability to fully harness the capacity of the spectrum that is given to you.
00:32:21Because you have the full control of the base station design.
00:32:26Whereas, satellites are limited by the number of satellites.
00:32:30They are limited by those satellites regulation.
00:32:33Then decommissioning those satellites.
00:32:34There are multiple things.
00:32:35They can't have infinite.
00:32:36Then there are a lot of other issues.
00:32:38Pollution.
00:32:39Light pollution.
00:32:40Then space debris.
00:32:43So, there are so many limitations.
00:32:45So, number of satellites and then slots, availability of slots, planning to deploy those satellites
00:32:51well in advance because you have to make an application to ITU for those slots.
00:32:56Then you have to do frequency planning.
00:32:59So, it's a very, very long shot.
00:33:01So, if you have to plan a satellite investment today, you have to make all those applications
00:33:07to ITU well in advance.
00:33:09It is not an easy thing to deploy a satellite network.
00:33:12So, we can say that there is no risk to terrestrial networks.
00:33:16Absolutely.
00:33:16No.
00:33:17See, this is the process.
00:33:19Satellite services will be offered in remote areas like rural areas, etc.
00:33:24Only to those affluent rural customers who are living in some farms with closed security
00:33:33where the optical fiber cable has not gone.
00:33:36You understand?
00:33:37So, not farmers.
00:33:38Not farmers.
00:33:39Who have the farmhouses.
00:33:40The farmhouses.
00:33:42Not farmers because they can't afford those services, right?
00:33:47Take the example of Dish TV.
00:33:49Sorry, Free Dish.
00:33:51Why it is so popular?
00:33:53Because the terminal and the set-top box cost so little.
00:33:57And then everything is free.
00:33:59That's why it is 50 million.
00:34:01But let me ask you this question.
00:34:03If the service prices are going to be between 3,000 and 8,000 depending upon what kind of
00:34:08services they offer and the terminal is going to cost minimum 40,000 rupees, who is going
00:34:15to buy?
00:34:15A farmer can buy a 40,000 rupees terminal set.
00:34:19It's not.
00:34:21It's completely a non-issue.
00:34:23This whole debate between terrestrial and satellite is completely a non-issue.
00:34:28It is not at all.
00:34:30Because they are just covering those gaps which terrestrial services are not capable of offering.
00:34:36As soon as those gaps get filled by a terrestrial network, like for example, Reliance is doing
00:34:41UBR over unlicensed spectrum claiming, you know, one Gbps of download, one Gbps upload,
00:34:47symmetrical upload and download.
00:34:49Now, if they are going to offer symmetrical upload and download, do you think that anybody
00:34:54is going to use a satellite which is asymmetric, which can do an upload of just 10 Mbps and
00:34:5825 Mbps and by paying 8,000 rupees per month?
00:35:03Yes.
00:35:04Paying disproportionately kind of.
00:35:05No, it's absolutely a non-issue.
00:35:08I don't know who is, why this is getting debated?
00:35:14It's a very strange situation.
00:35:16Understood.
00:35:17So, moving on to the next thing, which is 5G.
00:35:20So, over the last few years, telcos in India have made a lot of effort to get their 5G
00:35:27networks up and running.
00:35:30However, one thing that has come up again and again is they are not being able to monetize
00:35:355G.
00:35:36So, what does it mean?
00:35:38And why is it that they are having problems monetizing 5G?
00:35:41So, this is a problem with every technology.
00:35:44A lot of hype, a lot of expectation.
00:35:47And then, you know, people, the hype actually goes down because of the incapability of the
00:35:53business cycle to catch up with the technology.
00:35:56Let me give an example.
00:35:58Have you seen, have you heard about the dot-com days?
00:36:00Right?
00:36:01So much amount of hype.
00:36:02You have got optical fiber cable running gigabits of data.
00:36:06Right?
00:36:06And then Arun Netravalli coming to India and Vajpayeeji, he gifted a Lambda router.
00:36:13Right?
00:36:13Lambda router, you are not even heard even today.
00:36:15Right?
00:36:16In 2000, he gave it.
00:36:17What was it?
00:36:18It was a, it was a Lambda router.
00:36:20Like you have got an optical switch.
00:36:22It used to switch on light waveforms.
00:36:25It's a, such a technology at that time, you know, in optical.
00:36:27Probably the, it was a Bell Labs company, Lucent Technologies.
00:36:32And they created those optical switch to route wavelengths running on optical fiber.
00:36:38Okay?
00:36:38Sure.
00:36:39Because they thought that there will be a huge data consumption taking place because of
00:36:44dot-com.
00:36:44I see.
00:36:45But don't you think that was a useful technology, dot-com?
00:36:49Internet was a useful technology.
00:36:51Today, we are able to leverage the value that got generated or the technology got deployed
00:36:56in 2000 when the technology came.
00:36:59So, we were able, we are not able to leverage the technology because the ecosystem and the infrastructure
00:37:06to leverage the technology got created later after people saw the capability of the technology.
00:37:13I see.
00:37:13I see.
00:37:14So, if you should deploy something and you don't have people to leverage that capability, then people will find you are not able to monetize because it takes a lot of time to develop, to make a technology stable.
00:37:25So, it happened.
00:37:26So, it happened.
00:37:26Why did you see an immediate, you know, value from 3G to 4G migration?
00:37:33Because there was, it was a low-hanging fruit.
00:37:36But 3G already seeded the data capability, 4G just enhanced the capability significantly so that people can use those capabilities which has already got developed in the worldline ecosystem, the dot-com ecosystem.
00:37:51So, those were now transferred to the wireless ecosystem seamlessly because the pipe became thicker, right?
00:37:59But what 5G did was it brought certain new features in that pipe.
00:38:04What are those features?
00:38:06The biggest feature is that it increased the capacity of the pipe.
00:38:10What 4G was able to do, 5G was able to now able to do much faster.
00:38:14And then it brought another element, latency.
00:38:174G had got, you know, a certain amount of latency.
00:38:205G said that I am going to bring down the latency much lower.
00:38:24There are multiple problems with the…
00:38:26But one thing, in the day-to-day experience of people, the users, they said that from 4G to 5G, we have not seen any…
00:38:35That's what I was coming to.
00:38:36I'm coming to that.
00:38:37…upgrade of speed.
00:38:39I was talking about the capability of the technology.
00:38:42Now, in order to harness the capability, you need two things.
00:38:46First, you need the capability to get deployed in a manner that can be harnessed.
00:38:50It should not be in the namesake that I have the capability.
00:38:54For example, if you are going to create a network which is going to centralize everything, then even if the access has got lower latency, you will find the latency very, very high.
00:39:06Because your access networks or latency basically means that how much time the data takes to travel from the point which you have initiated, right?
00:39:20You have initiated a request to the point of serving the request, which can be a server.
00:39:27Because the server has to respond to your request.
00:39:30Now, if there are too many electronics in between, the server and your, it adds to the latency.
00:39:38So, there could be some networks in between which could help you reduce the latency, but there could be some other networks which are going to be on top of the existing network which will increase the latency.
00:39:50You understand?
00:39:51So, it is not that the 5G alone is serving the internet or that server.
00:39:55There could be an wireline network, optical 5 network, which will be connected to 5G.
00:40:01Even if 5G reduces the latency because of the inherent capability of the technology, your overall system may not have been set up in such a way that you can fully leverage the capability of the latency.
00:40:12You understand?
00:40:13I see.
00:40:14So, you are saying 5G is not the whole kind of roadway.
00:40:17It's just a flyover.
00:40:19It's a flyover.
00:40:20Yes.
00:40:20With other roadways.
00:40:21Other roadways have to be properly managed.
00:40:23So, you will find that even if you have deployed 5G, your latency has not gone down significantly because other infrastructures have not been set up properly in order to fully leverage that capability.
00:40:34That is one.
00:40:36Second thing is that with 5G, the biggest problem is to serve the end consumer, end to end, without any break in between.
00:40:48What does it mean?
00:40:49Let's say if your core network or your ancillary network, which is attaching to 5G, are all properly set up, they are robust enough and they are optimized for.
00:40:58Are these core and ancillary networks of 3G or 4G?
00:41:01No, no, no.
00:41:01These are all adjacent because 5G is the access system.
00:41:04It is giving, it is like a, you can say it's like a vehicle or a, or a highway, which is giving you a connection, right?
00:41:14And then there are other things which will take the connection forward.
00:41:18What are those?
00:41:19There could be an optical fiber network.
00:41:21There could be some router in between.
00:41:24There could be a server, right?
00:41:26Those have to be located in an, in the overall network in a manner that it kind of serves the consumer in the most optimal and the fastest way.
00:41:35So you need to have all these servers located properly in the net.
00:41:39We can't just host them in a central location.
00:41:41And this was not the case in 3G or 4G?
00:41:44No, in 3G or 4G, the same situation.
00:41:46See, look, this is the way it works.
00:41:49The access networks is facilitating the connection to the consumer wherever he is, without him having to get nailed through a wire.
00:42:01It is just facilitating that wherever you are, whether you are in the road, wherever you are inside the house, you are connected.
00:42:10You have the flexibility.
00:42:11That is what wireless network is providing you, right?
00:42:15Then this connection that you have has to carry a service.
00:42:20And that service is carried over to the wireless network through the core network, through a point, to the point where it is being served.
00:42:28It could, it is not the wireless network is providing you the service service is always located in a server, which is connected to the wireless network using a highway, maybe an optical fiber network.
00:42:38The location of those servers is very, very important because the amount of distance that you have to travel to go to the server matters.
00:42:46Okay.
00:42:47Right.
00:42:47If your servers are all placed in a manner that you have to travel the shortest distance.
00:42:53For example, if you have to buy some milk from, from somewhere, and if the milk market is located 20 kilometers away, how much time and effort it will take to, you like it to be in a doorstep, right?
00:43:07Yes.
00:43:07So it's almost like that.
00:43:08It is almost similar.
00:43:10So you carry, you take your bike, which is in, which is the access network and go toward the shop, which is located maybe in the colony of market.
00:43:19And you take milk and come back.
00:43:21But if you have to take your bike and go to 20 kilometers away to a mall to get that item, you know how much time.
00:43:29So is there a significant difference between how this network is designed for 3G, 4G versus 5G?
00:43:35Exactly.
00:43:35There is a difference.
00:43:36So let me just go step by step.
00:43:38Now you have understood that wireless network is just a vehicle to carry the services to the point where the services are being offered.
00:43:46And the services are being offered using integration of different types of network.
00:43:52And wireless is just one part of it.
00:43:53Okay.
00:43:54You understand now?
00:43:55Then the wireless network has evolved over a period of time.
00:43:59It was 2G.
00:44:00Then it became 3G.
00:44:01Then it became 4G.
00:44:02Now it is 5G.
00:44:04Now what has happened is that every bit of wireless, every past generation of wireless network had some bottlenecks.
00:44:11What were the bottlenecks?
00:44:122G didn't have data capability.
00:44:14It was voice.
00:44:153G had data and voice, but the data was quite thin.
00:44:184G had data and voice, but the data was, is not as fast as 5G, right?
00:44:245G is able to increase the latency also within the wireless network much faster than these three technologies, which previous technologies.
00:44:31Because the framing also matters.
00:44:32The latency is not just about any wireless network.
00:44:36You have to reduce the latency within the wireless network also because the wireless network will also add to the latency.
00:44:41So what 5G has done, it has increased the size of the pipe as well as reduce the latency, which was getting added up before you go out of the wireless network.
00:44:50Now the problem that we are facing today in India is that this 5G network has first, it is fully technologically capable.
00:44:59Everything is the latest and the best system, but the technology does not carry forward natively indoors inside the house means the connection does not carry forward natively inside the house with the pipe capable enough to serve all kinds of 5G services that are possible.
00:45:22Now what does it mean?
00:45:23Now what does it mean?
00:45:24Let me explain.
00:45:25See, in case of 4G network, what was happening?
00:45:29The 4G network, let's say if you don't get connection, when you enter the house, you latch on to Wi-Fi.
00:45:37You will be able to get every type of data connectivity, voice, VO, Wi-Fi, everything works.
00:45:42In case of 5G, if you get inside the house and then rely on your data capability using a Wi-Fi network, then all those features which 5G is capable of, everything will get lost.
00:45:57means Wi-Fi does not support the 5G network's capability.
00:46:02What are those?
00:46:03Latency and ability to differentiate different types of services, which can be offered by selecting a different user.
00:46:14For example, in 5G, you can give different SLS service level agreement on an application basis.
00:46:20Okay.
00:46:21Let's say if you want a particular user to get a differential application, which is, which is seeing on the mobile phone, that is not possible in case of 4G.
00:46:30Right?
00:46:31Now, since it is not possible in case of 4G, it does not matter whether you are hooked onto a Wi-Fi network inside your house.
00:46:37But in case of 5G, if you get hooked onto a Wi-Fi network in order to do conventional data, then you will lose every of the capabilities which 5G is offering.
00:46:47So therefore, you want the 5G to reach you inside your house.
00:46:52But today, the coverage does not go inside your house.
00:46:57Why?
00:46:58Because for that, you need low frequency spectrum.
00:47:01And 5G is offered in high frequency spectrum.
00:47:04And that does not penetrate inside your house.
00:47:073.5 GHz band.
00:47:10So if 5G is offered with sufficient quantity, like Reliance Jio has got 700 MHz, 10 MHz of spectrum.
00:47:17So they can say that okay, my 5G reaches natively inside the house because low frequency travel has got better penetration.
00:47:26Right?
00:47:27You can't really rely on Wi-Fi to leverage 5G capabilities.
00:47:30Right?
00:47:31Which is that UV level slicing and lower latency.
00:47:35I want to understand this a bit better.
00:47:37Okay.
00:47:38Why is it that 5G cannot be put on Wi-Fi?
00:47:42This is not clear.
00:47:43Okay, let me explain.
00:47:45This is going to be a little difficult, but let me make an attempt.
00:47:48See, 5G is a technology which has got a different framing structure compared to Wi-Fi.
00:47:56So when I say access technology, Wi-Fi is also an access technology.
00:48:013G is also an access technology.
00:48:024G is also an access technology.
00:48:04Now this access technology has got certain capabilities.
00:48:08Capabilities means it can differentiate between services.
00:48:12It can give you lower latency.
00:48:15Right?
00:48:16It can do something more, which that technology cannot offer.
00:48:21For example, 4G cannot do lower latency.
00:48:234G cannot do UV level slicing.
00:48:26Similarly, Wi-Fi cannot do lower latency.
00:48:29Wi-Fi cannot do UV level slicing.
00:48:32You understand?
00:48:33So when you are switching wireless networks,
00:48:37and if you only care about data, it doesn't matter.
00:48:41But if you really want those features,
00:48:44which the wireless technology inherently is capable of supporting,
00:48:48then you need to take the technology inside your house to the phone.
00:48:54You can't say that now, for example, let's say if your home had 4G coverage,
00:49:005G is outside your home.
00:49:02It's okay.
00:49:03I am fine.
00:49:04I need a wireless network.
00:49:05Then what is the point in having a 5G network?
00:49:07You better use 4G, right?
00:49:09Why you are switching between networks?
00:49:12Today we are switching between networks is because it's like a fallback arrangement.
00:49:18Just for the network, for the user to get a feeling that he's not losing.
00:49:24For example, in my house, there is no voice connectivity.
00:49:27Right?
00:49:28What Airtel has done?
00:49:29Airtel says, okay, if you don't have voice connectivity, no problems.
00:49:32You take my broadband network.
00:49:34I'm going to give you Vuo Wi-Fi.
00:49:37So it is going to work seamlessly.
00:49:39And it's working seamlessly.
00:49:41You got my point.
00:49:42So that integration between two networks have been done by the operators.
00:49:47Because it did not matter.
00:49:49You understand?
00:49:50It did not matter.
00:49:51Vuo Wi-Fi has got some limitations,
00:49:53but it is kind of giving you that kind of capability, right?
00:49:564G voice also pretty bad.
00:49:59You know that.
00:50:00We are working on WhatsApp.
00:50:02But 5G, you can do HD voice.
00:50:05Even in 4G, you can do.
00:50:06But 5G, you can do because it can give you service level, you know, capability.
00:50:12You can enhance the data speeds that you are offering to a voice.
00:50:17You can give him more capacity.
00:50:19But for that, you need more spectrum.
00:50:21For to do all...
00:50:23What is the limitation?
00:50:24Why don't we have enough spectrum?
00:50:26Because spectrum is like price like gold and platinum.
00:50:30This is something like diamond in India.
00:50:33If you are going to price spectrum,
00:50:36you know how much is the 10 megahertz of 700 megahertz cost to Reliance?
00:50:42How much they paid?
00:50:4440,000 crores for 10 megahertz.
00:50:46And how much you need to have reliable 5G services?
00:50:50Internationally, if you go to any operator, you will ask any operator who is considered to be an operator who cares about quality and he really wants to monetize 5G or any technology in the future.
00:51:01They will have between 20 to 30 megahertz in the low frequency band.
00:51:07And in the low frequency band, we have only one operator with 10 megahertz and Bharti does not have 5G spectrum in the low frequency.
00:51:14They did not participate in the auction because the spectrum was so costly.
00:51:18It is the low frequency spectrum that you need to get into houses.
00:51:23Correct. That's why I'm saying 5G is not about speeds alone.
00:51:27People actually have a misconception that 5G is only speed.
00:51:31Tell me that in your phone, if you do a speed test, you get 300 Mbps or 350 Mbps.
00:51:37What you are doing with that 350 Mbps.
00:51:40Any application, tell me, that has given you any kind of feeling that you are in now 5G service.
00:51:48You just watch that I am getting 300 Mbps or something.
00:51:52It is the same experience as it was 23.
00:51:54Because they don't offer anything.
00:51:56They don't have the capability to offer anything.
00:51:58Because in order for them to offer anything, that has to be end to end.
00:52:04Wherever you are, inside your house, in your bedroom, they can't offer that.
00:52:09Because 10 MHz of low frequency band is not sufficient.
00:52:13Let me give you another example.
00:52:15See, what is happening in this 10 MHz?
00:52:18Everybody is doing best effort.
00:52:21Best effort means what?
00:52:22That if you want to access data, your data, your usage and your neighbor usage is getting the same priority.
00:52:30Nobody is getting any kind of, you know, any priority in advance.
00:52:36Means in order for them to give you a 5G service with a certain SLA, they have to give you fast lanes within that block of 10 MHz spectrum.
00:52:48Means you will get a priority.
00:52:50Your data is not run, will not run at best effort.
00:52:55Now, if for you to get a priority, what will you do?
00:52:59You will squeeze the best effort guy.
00:53:01Because if 10 MHz have got this much capacity and everybody is using best effort, now they start distinguishing between users.
00:53:08Some users are going to get priority fast lane.
00:53:11Some users are going to run on best effort.
00:53:13Then what you will do?
00:53:14You will squeeze the best effort guys capability to run internet.
00:53:18So what will happen?
00:53:20The best effort service quality is going to go down in order for you to get differentiated services because you want your services to run inside your house.
00:53:29That is why you need to expand the capacity of those people who you want to serve with better quality services or new services which 5G is capable of.
00:53:41Rather than squeezing the best effort user services.
00:53:44And that is a challenge with 10 MHz of spectrum.
00:53:46Then the telecom industry, I mean each telecom player needs 20 to 30 MHz.
00:53:51Absolutely.
00:53:52Double or triple.
00:53:53But you don't have it because you have given spectrum to railways.
00:53:56700 MHz because operator did not participate in the auction because 700 MHz spectrum has got a very long history.
00:54:03It was priced at such levels you can't even talk about.
00:54:07Because in 2000, in 2016 when the 700 MHz spectrum was first offered for auction, it was priced at 4 times that of the 1800 MHz band.
00:54:194 times.
00:54:20Why did they do that?
00:54:21Why did they do that?
00:54:22Because in 2012, TRI came out with the recommendation that 700 MHz band should be 4 times the price of 1800 MHz spectrum.
00:54:32We are doing some logic which is completely wrong which I have already written article about it.
00:54:36Multiple times.
00:54:37So, they were completely wrong and I don't want to get into the details why it was wrong.
00:54:42So, in 2016, TRI quoted the same recommendation and said it should be 4 times.
00:54:48Now, if 1800 MHz spectrum is going to cost 1000 crores of rupees, I am just giving an example.
00:54:56In 7000, it is going to cost 4000 crores of rupees.
00:54:59Who is going to participate in the auction?
00:55:01So, they never participate.
00:55:03So, there were no takers of 700.
00:55:05And then later, what happened was they brought the 700 MHz prices down.
00:55:09Still, there were no takers.
00:55:11And they brought it further down in the next auction.
00:55:14Reliance got it only for 40,000 crores for 10 MHz.
00:55:19Because the prices were actually so high and therefore, there were two failed auctions.
00:55:24And they thought that 700 MHz is no takers.
00:55:26So, they gave all the spectrum to railways and other PSUs.
00:55:30Even BSNL got 700 MHz spectrum where it is a 5G spectrum.
00:55:33Now, they are doing 4G there.
00:55:35And that's why BSNL is finding it so difficult to provide services.
00:55:39Because they have deployed 4G in 5G spectrum.
00:55:43Where 800 MHz spectrum was available.
00:55:46Because 800, what would have happened if 800 MHz spectrum where Reliance is doing 4G.
00:55:51If BSNL would have done 4G in 800 MHz spectrum.
00:55:55Though it was not 10 MHz in every circle.
00:55:57But there was a sizable amount of spectrum available.
00:56:00Then they could have leveraged the economies of scale for Reliance's devices.
00:56:04Ultimately, it's all about devices, handsets.
00:56:06It's not about core equipment.
00:56:08Because BTS is not the reason why people are hooking onto a network.
00:56:14They should have an affordable device.
00:56:16Even if you have an affordable BTS or the base station, it does not matter.
00:56:20If the device is going to cost high, so they will not hook onto your network.
00:56:26So now, you have got 700 you have deployed.
00:56:29You say, oh, 700 devices are supported.
00:56:31Yes, there are devices which are supporting 700.
00:56:34But those are reasonably high-end devices.
00:56:38The cheaper devices still, they are struggling.
00:56:41Somebody asked me a question.
00:56:43Why BSNL is running 3G network in 2100?
00:56:46Or why they have done 2100 4G network?
00:56:50The reason is that, that legacy device does not support 700.
00:56:54So they need 2100 to lock on.
00:56:562100 got a much lower coverage.
00:56:58Now, if a legacy guy is hooking onto 2100, went to 5 MHz and 700 or 10 MHz, so you are offering poor quality service to a guy who doesn't have the handset to support 700 MHz spectrum.
00:57:13So your whole objective has got twisted upside down.
00:57:18BSNL was meant to support who?
00:57:20Those value customers, right?
00:57:22Yes.
00:57:23Yes.
00:57:24So they went and deployed 700 MHz.
00:57:27So the spectrum that they are deploying, BSNL is deploying.
00:57:32So that is meant for 5G and they are putting 3G, 4G on that.
00:57:38And the handset cannot support, and the value customers, the handsets that they have.
00:57:45They cannot support the legacy.
00:57:47Legacy handset.
00:57:48Not the new handsets can support, the legacy handsets.
00:57:51And then when you are going to lock those devices using low cost handsets, you definitely will not have those handsets support multiple bands.
00:58:00Because the higher the number of bands which you enable, the cost of the device is going to increase.
00:58:06So then what is the future of monetization of 5G?
00:58:10Like so many people have put tens of thousands of crores.
00:58:13They don't have enough spectrum to provide those kind of services to consumers.
00:58:18But do they have enough spectrum to provide those kind of differentiated services to enterprises?
00:58:24Is that somewhere the monetization can happen going into the future?
00:58:29Monetization will happen, but it is going to take time.
00:58:32That is why whenever you are deploying or absorbing a particular technology, it is not the responsibility of the players who are bringing the technology on the ground.
00:58:44It is also the responsibility of the government to ensure that the resources are optimally managed so that the country does not end up wasting spectrum or resources.
00:58:57Because India is a country where affordability is an issue.
00:59:01See, look, why we are not able to kind of have that kind of leverage as China has.
00:59:10What China has done was over a period of 20 years, they have lifted the affordability of their consumer to such a level that they have huge leverage on a local level.
00:59:22Now, in India, the problem is that the consumer can't even afford a simple device, right?
00:59:29So you are borrowing technology from outside, which is same cost structure, but the consumer can't afford those technologies.
00:59:37Therefore, you can't have your licenses to these levels.
00:59:38Therefore, you can't have your licenses to these levels.
00:59:41Revenue share 8%, spectrum SUC 4%, auction fees so much.
00:59:46Yeah.
00:59:47These are actually creating more problems for your country.
00:59:51The country is not able to absorb technology.
00:59:53So the cost structure in the auctions have been such that you are not being able to price it at the level to kind of bring that services to the consumer.
01:00:05Because you had a problem that your country does not have people with that kind of disposable income to afford services.
01:00:12That's the biggest problem that India has to face because China has grown 10%, you know, for two decades.
01:00:19India is still struggling and affordability per capita GDP is still struggling.
01:00:24So when you have consumer centric services like this telecom, you have to, you are dependent on the consumer's ability to pay.
01:00:32And the biggest point of, you know, you can wear the entry point where the bottleneck is the device.
01:00:39If you don't have a device, what does it matter?
01:00:42You know, you will not be able to do anything.
01:00:44Your device should be fully empowered to able to.
01:00:46Do you think that it was a case of that when 4G happened and it was monetized and the telcos made so much money.
01:00:53Maybe the government thought we lost out.
01:00:56Maybe we could have charged more for the spectrum.
01:00:58We did not make so much of money.
01:01:00Reliance actually lost.
01:01:01They gave freebies.
01:01:02Who said that, you know, the telcos made huge amount of money in 4G?
01:01:06No.
01:01:07The telcos seemingly appears to be, are being made, you know, they, they appearing that they are making money because you know why?
01:01:14Not that they are organically increasing their revenues.
01:01:17They are taking subscribers from those operators who are going out of business.
01:01:22So it has not been an organic growth.
01:01:26It has been a market consolidation.
01:01:29That's why these companies revenue seems to be growing because they have not been terrified.
01:01:34Hardly terrified.
01:01:35One or two terrified has happened and still, you know, you'll find that some operators are struggling on terrified.
01:01:41They did not get that enough leverage that they wanted.
01:01:44Because terrified, if you want to do terrified, then you should have pricing leverage.
01:01:50And pricing leverage is only with corporate customers.
01:01:53Customers who are loyal to you.
01:01:55Right?
01:01:56Who have a brand.
01:01:57But if you don't have a brand and you have got so many value customers, then you don't have pricing leverage.
01:02:03Then you do not attach to you the customer.
01:02:05Not only attach, you don't have pricing leverage because they will start reducing their consumption.
01:02:10Because they don't have the affordability.
01:02:11If you do, because I have done it and therefore I'm telling you.
01:02:14You know that how the CPI index is created?
01:02:17Consumer price index?
01:02:18The MOSPI, the Ministry of Statistic and Program Implementation, they do a survey.
01:02:23And in the survey, they created those categories.
01:02:26That what much amount is being paid for?
01:02:29What kind of services or utilities which the common man is doing?
01:02:34So there is a category of how much they are paying for other services, right?
01:02:39Other than, you know, different type of buckets.
01:02:42So telecom is mapped to that.
01:02:44So you will find that that is so low that you can't even afford that kind of services for most of the Indian consumers.
01:02:54And that is where the basic challenge is in India.
01:02:57Because the affordability is a big problem.
01:02:59The consumer cannot afford these services.
01:03:02Device prices, affordability and therefore in order for you to monetize it, you need to come out with a much more holistic plan.
01:03:11You cannot have these bottleneck resources like spectrum, license fee at so high value that, you know, I would like to see the government may say that, okay, I'm getting money.
01:03:23I want this money for, you know, doing all kinds of social benefits schemes and, you know, to help the people.
01:03:29That is okay.
01:03:30That's fine.
01:03:31But the problem is that, you know, that the BharatNet program is running for last 11 years.
01:03:36How much money has been spent?
01:03:37How much money has been spent?
01:03:38How much money has been spent in BSNL?
01:03:40The intention is very good, right?
01:03:43But how many subscribers BSNL has?
01:03:46How many places BharatNet has gone?
01:03:48Still, the DOT secretary is saying that you have to take another three years to go to all the villages.
01:03:54How much license fee BharatNet is paying?
01:03:56That will give you the kind of a benchmark that how much usage is happening for BharatNet.
01:04:01The best way to deliver services to the end consumer is to empower a vested interest, to roll out services.
01:04:10Because vested interest has got the maximum motivation to provide services and develop the market.
01:04:17The government structure is such that they can't do business properly.
01:04:22The government is a facilitator.
01:04:24You understand?
01:04:26You cannot say that I'm going to take money from here and give it to them.
01:04:29That does not work.
01:04:30That is not efficient.
01:04:32The best efficiency is to create those incentives so that the operators develop the market.
01:04:39It is not just about monetization.
01:04:42It is about developing the market.
01:04:44Because what happens is that, let's say, you are not up to the mark, right?
01:04:49You don't have the skill set.
01:04:51But we have the potential.
01:04:53So, what do we do?
01:04:54We empower with you education.
01:04:56We give you subsidy.
01:04:57You develop the market.
01:04:59Once the market is developed, then it is monetizable.
01:05:02Do you think that is something that the government should think about from a policy perspective?
01:05:07That why do you want to milk out at the spectrum point?
01:05:13Because if you make good 4G, if you make good 5G, if the telecom network is good.
01:05:17We have seen over the last 10 years what has happened.
01:05:20You know, cheap data has led to all these unicorns, you know.
01:05:26So, automatically there will be the exchecker will benefit.
01:05:30I mean, over 5 or 10 years you will get that kind of tax money to do your scheme.
01:05:39So, do they need to rethink their policy from scratch about milking out money?
01:05:45Do you think that the government has really been able to milk out?
01:05:48That is a counter question I am asking.
01:05:50No, but that seems to be the intention.
01:05:53Maybe the intention is that.
01:05:54So, let's say if you have an intention.
01:05:56And you actually have been saying that, you know, I have got so much amount of money from auction.
01:06:00So much amount of money from AGR.
01:06:02Right?
01:06:03But if you really do a calculation, you will find that a sizable portion of the money you will never be able to collect.
01:06:10No.
01:06:11Why?
01:06:12Because the market is not healthy.
01:06:14This is all deferred payment.
01:06:16You have not collected them.
01:06:18Right?
01:06:19You have given debt to the telecom operators.
01:06:22And now the debt has.
01:06:23Yeah.
01:06:24So, when you say that I am actually monetize these resources.
01:06:29So, I have basically helped the exchecker.
01:06:31You have not helped the exchecker.
01:06:33See, if your intention was that and that could fulfill, I would have given to you.
01:06:38What you have done in the process, you have driven the competitors out of the market.
01:06:43By raising the bar so much that some operators felt that, oh, this is a very good opportunity to kill competition from the market.
01:06:53Right?
01:06:54Because they had the deep pockets.
01:06:55They pay.
01:06:56And others could not pay.
01:06:57And they were out of the market.
01:06:59Now we are struggling.
01:07:00And now we effectively have a duopoly kind of a situation.
01:07:03So, the government see how the policy works.
01:07:06Right?
01:07:07It's a very, very simple thing to understand.
01:07:09See, the monetization is a very important objective.
01:07:13Every government should be able to monetize and rightfully so.
01:07:17Why should you give free resources to corporates?
01:07:19Right?
01:07:20No.
01:07:21It should not be.
01:07:22Right?
01:07:23But there is a larger objective.
01:07:24What is a larger objective?
01:07:25Larger objective is to ensure that the resources of our country is efficiently utilized, which is spectrum and money.
01:07:33Both.
01:07:34It should not lead to inefficiencies.
01:07:37And how does inefficiency happen in the market?
01:07:40If you kill competition.
01:07:41Because when you kill competition, nobody wants to be efficient.
01:07:44I would like in the…
01:07:46If suppose I have got no competition and money is flowing in my pocket, I will make no effort to go and work.
01:07:52I will sit on the couch and watch TV and eat potato chips.
01:07:57So, nobody will have any motivation to do any kind of effort.
01:08:03Wow.
01:08:04So, competition is the key.
01:08:06So, your resources has to be valued in such a way that it does not kill the competition.
01:08:11It is not the question of level playing.
01:08:13It's completely misused phrase, level playing.
01:08:17There is nothing called level playing in this world.
01:08:19Why?
01:08:20Because a player with deep pockets, right, is able to negotiate better volume discount.
01:08:26That player who does not have deep pockets is not able to.
01:08:28So, can you level the play?
01:08:30And can you still the…
01:08:31No.
01:08:32Then what is the question of level playing here?
01:08:34You…
01:08:35What you have to do is you have to design the auction in such a way that a player who is participating in the auction, he behaves responsibly.
01:08:44And he knows that if he behaves irresponsibly by gaming the system and raising the price so that the other people get out of the market will get penalized because of his action in future auction.
01:08:57So, auction design is a very intelligent way to do this kind of balancing act.
01:09:03You should say that, okay, some players gave me so much amount of money and therefore this spectrum is so much amount of value, I'm going to act like a robot.
01:09:11Then what will happen?
01:09:12Then what will happen?
01:09:13The other player who is a weak player because everybody cannot have that kind of strength.
01:09:16He is not going to pay and that if he gets out of the market, then what will happen?
01:09:21The competitiveness of the market will go down and you are going to result in monopoly.
01:09:27And when you have monopoly, then you are gone, finished, then the consumer will have no leverage.
01:09:33Government will also have no leverage.
01:09:35So, one last question, Parhan.
01:09:37We have effectively become a dual poly now.
01:09:40There is BSNL still struggling.
01:09:42What is the way ahead?
01:09:44How do we attract more new players to come and invest in telecom?
01:09:49Or is it that this is the nature of the telecom industry that there will always be just two or three players?
01:09:55Because there was a time when the telecom industry had a lot of players.
01:10:00It was a bustling place.
01:10:02So, can that happen again?
01:10:04See, there is no need to have so many players in the telecom industry because the market will not be able to support so many players.
01:10:09Because there is always going to be a balance depending upon the amount of investment that is required, right?
01:10:17And depending upon the optimal cost of service and able to get remunerated of the services.
01:10:23So, you can't have multiple players.
01:10:25The biggest bottleneck on the number of players comes from spectrum.
01:10:29Because spectrum actually becomes a tool of managing competition.
01:10:34Now, since spectrum is not a bottleneck anymore, a lot of it is already lying free, unused, right?
01:10:40If you look at the last auction, you will find that most of the spectrum bands, except for the high frequency band like 5G, etc. got sold.
01:10:47So, spectrum, lot of spectrum is there.
01:10:49So, that is no longer a bottleneck.
01:10:51So, in India, the biggest challenge is to ensure that the market stays competitive is to make sure that Vodafone Idea and BSNL becomes healthy.
01:11:04And they are able to contribute.
01:11:07Then we can talk about new players.
01:11:09These SATCOM players and other players, they are not at all in competition to the terrestrial players, which we have already discussed.
01:11:15So, those things are separate, right?
01:11:17But, as far as terrestrial players are concerned, because so much damage has been done in the market, because of EGR, because of spectrum prices, and people have lost.
01:11:28The healthy players are now becoming unhealthy, actually has become unhealthy.
01:11:33So, it is important to revive them, to ensure that those players do not go out of business.
01:11:39If you are able to manage that bit, at least, then a lot of damage, which has been done in the past, can be undone.
01:11:46I think that should be the focus, at this particular point of time, rather than bringing new players in the market.
01:11:54So, do you think that is kind of what the government should think about how to help these players, help the revival of these players?
01:12:04Because, over time, we have seen whenever the government kind of thinks about business, it gets it wrong more often than not.
01:12:13So, isn't it good to just, you know, let, you know, whatever has happened, you know, under the bridge and make it more feasible for new players to come in, maybe buy up these two companies or something like that?
01:12:29So, look, this is not the question of government being in business here.
01:12:33It is about the government acting like a facilitators.
01:12:36Now, when I say facilitator, one is BSNL, which is a government company.
01:12:41So, that's a different part altogether.
01:12:43As far as Vodafone IDEA is concerned, Vodafone IDEA, this is not the problem of their management.
01:12:49If there was a problem of their management and the technical capability to run and network, that would have been a different point,
01:12:56that you look for another player, you know, who is much more efficient and they are not doing their job properly and let them buy out, right?
01:13:03That is not the issue.
01:13:04The problem is that the unexpected EGR dues which came up, which Supreme Court gave around 60,000 crores, right?
01:13:11And then there will be some additional demand, which I'm not going to talk about here.
01:13:15So, that and then having two auctions in year 2014 and 2015, which was a survival auction for the players whose licenses were expiring.
01:13:27I don't know whether you are aware of that.
01:13:30Because in year 2014 and year 2015, Vodafone IDEA paid huge amount of money for ensuring that their license continues.
01:13:40And those money actually got disproportionately high because they didn't want to go out of business.
01:13:47So, they paid that and that's why they accumulated this 2 lakh plus crores of debt.
01:13:53Now, with the 2 lakh plus crores of debt hanging over their head, nobody is going to buy them out.
01:14:00So, you are not going to have anybody who will buy Vodafone IDEA out with this debt.
01:14:05You have to get rid of this debt.
01:14:07Now, if you get rid of this debt, might as well let Vodafone IDEA continue their operation.
01:14:13Now, if this is a politically challenging issue, then you have to come out with a solution, which is going to make it win-win for all.
01:14:23Something, I do not know what would be the solution.
01:14:27Because main point here is that Vodafone IDEA has to get out of this debt of 2 lakh crores, which is government debt.
01:14:36Because without this, Vodafone IDEA is not going to get any private debt.
01:14:41If Vodafone IDEA does not get in private debt, then whatever they do, they will not be able to run their operation.
01:14:46Simple as that.
01:14:48Now, how do you do it?
01:14:49What kind of structure that you want to build?
01:14:51That is up to the government. I can't say about that.
01:14:54On that note, Parag, thank you so much for enlightening us about the telecom sector.
01:15:02And it was really kind of nice to hear about everything in so much detail from, you know, why geosync, synchronous satellites have to move with the earth and to the pricing of spectrum.
01:15:20So, thank you so much for coming here and talking to us today.
01:15:24Thank you very much for having me. Thanks a lot.
01:15:26Thanks a lot.
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