Bharat Karnad
On Feb 15, I posted ” Obdurate defence finance bureaucrats sinking atmnirbharta projects”. It had revealed how the Integrated Financial Adviser (IFA), Ministry of Defence had ousted two Indian defence MSMEs (Micro, Small and Medium Enterprises) — Lekha Wireless Solutions Pvt Ltd and Signaltron, both of which possess 5G patents for radiotelephony from the competition to provide the army with a mobile tactical communications (TACCOM) network, how this was done by relying on an outdated turnover criterion these firms could not meet because, well, they are small and not because they lacked the tech or couldn’t execute the contract, which fact these two companies had made known to the IFA before the bids for the TACCOM tender were opened, how this was done at the crucial tech testing stage so Lekha and Signaltron couldn’t prove their tech, and why this sort of deleterious rule-based regime is what the babus follow when it serves their purpose of furthering foreign tech purchases. The foreign technology involved is Israeli and the Indian front company — Alpha Design, is only a system integrator buying components/technologies from here and there and putting them together, it is not a technology creator or innovator. Worse, because Israel sells its advanced technologies to the Chinese military, who is to say the PLA is not conversant with this Israeli technology and this TACCOM the army is set to use on the disputed border is not fully compromised?
Disappointingly, despite my urging General Manoj Pande in the post — the first combat engineering officer to be COAS, to stop the tender process from advancing, he did nothing. However, Defence Minister Rajnath Singh, I understand, took note of my post. But instead of cancelling the trial contract and ordering the tender for TACCOM to be reissued, which is something MOD/Govt of India is entirely within its sovereign right to do at any time, for any reason, with regard to any defence or other capital acquisition deal, MOD chose the limited option of changing the revenue turnover criteria without scrapping the Alpha Design-Israeli contract. So Lekha and Signaltron are still out of the TACCOM contract, notwithstanding their superior INDIGENOUS technology!
But the ministries and bureaucrats within them not taking Prime Minister Narendra Modi’s atmanirbharta goals seriously seems to be the norm rather than an exception. Consider the Department of Telecommunications (DOT) — supposedly a sphere of special concern and interest to the PM. The minister heading it is the media savvy Ashwini Vaishnav, who pops up every other day to extol just how far and fast India is rising in the field and spews statistics about the growingly large mobile telephony coverage that facilitates the digitalisation of the economy. But, it would appear he is more interested in impressing Modi with such self-publicity shenanigans than actually doing something substantive rapidly to increase the telecommunications and related services footprint in the country, and help the economy progress by leaps and bounds.
The means for India’s potentially rocketing rise in the telecom sector are Captive Private Networks (CPNs). Without getting too technical, CPNs involve a very small part of the spectrum being directly allotted, rather than auctioned, to big companies, industrial and commercial ventures, hotel chains, and similar large economic entities, and even remote village collectives, enabling them to operate their own closed communications networks to improve their intra-company/unit communications, improve functional efficiency, resource management, labour productivity and the bottomline, rather than rely on the unreliable large telecom companies — Telcos (Jio, Airtel, Idea, Vodafone, et al) who run their businesses for profit and are not interested in investing in communications infrastructure, to meet specific, localised, needs and providing the kind of services such entities need to beat foreign competition, win contracts at home and abroad, and otherwise survive in the market. And for remote areas to be connected and escape remaining hostage to telco decisions motivated by commercial reasons.
The analogy here is the freeing of Wi-fi, which was resolutely opposed by the Telcos. But after GOI over-rode objections and freed Wi-fi, Telcos discovered how they could piggyback on it to extend applications based on it, to increase their business manifold and make lots of money. Germany, Canada are leaders in CPNs. An expert likened a CPN to an EPABX (electronic private automatic branch exchange). Any hotel can just go and pick up various components — all manufactured by MSMEs — of an EPABX that connects the reception desk to the rooms in the hotel, and each of the rooms to all the hotel services, etc., and hire an MSME specialising in integration to put the communications system together. Voila! you have an efficient all-in communications network for the unit. A CPN can be set up exactly in the same way as EPABX for any industry, financial institution, or economic entity. It will spectacularly boost the MSME sector and assist significantly in addressing the problem of millions of “educated” illiterates mass produced by hundreds of universities. Because MSMEs will be the main source of CPN technologies, components and integration services.
In India, 230,000 factories would benefit from CPNs, as would 3,000 mines, 130 plus airports, 13 major ports and 200 minor and intermediate ports along the coastline, the central highway construction and maintenance authorities overseeing 151,000 National Highways, nearly 160 million hectares of arable land, $227 billion software industry, and over 10,000 startups. The economic multiplier impact of CPNs using “millimetre bands for dense applications and especially for manufacturing in BRIC Countries is estimated for the period 2025-2050 by GSMA, the global association of representing the mobile telephony “ecosystem” as $84 Billion for Brazil, $102 Billion for Russia, $150 Billion for India, and a colossal $1.114 Trillion for China. How will India ever catch up with China, if DOT continues to place administrative and procedural obstacles in the way of CPNs?
In any case, even DOT which has been a tech laggard and until recently a big promoter of Chinese Huawei 4G and 5G telecom hardware and is only now trying to catch-up with the more advanced countries such as Germany and Canada, realised and formally decided in 2018 that the entire spectrum is not auctionable, that small portions of the bandwidth ranging from sub-gigahertz to high millimetre wave bands, can by “administrative assignment” be given to economic entities to run their CPNs for annual royalty/fee, and that CPNs are both necessary and make economic sense. Accordingly, 20 applications for CPNs were forwarded by major corporates, including Infosys, L&T, Tata Power, etc to lease a bandwidth. The Modi government consequently made a cabinet decision in 2019 to implement CPNs. Here the regressive-minded DOT bureaucrats rather than going ahead and implementing the cabinet decision, played spoiler. DOT formally sought an opinion about so allotting or “leasing”, not auctioning, the bandwidth for CPNs to the Law Ministry and, predictably, brought the proceedings to a shuddering halt.
Here the ghost of the 2007-2008 2G scam, involving the Congress government minister A. Raja stalking the DPT corridors ever since, intervened. Verily like the Bofors scam that has skewed defence procurement decisions for over 40 years, the 2G scam, in which Raja was charged with selling 122 2G spectrum licenses cheap resulting in revenue loss to the Exchequer, but in 2017 was exonerated by the Courts of any wrongdoing, means no DOT official wants to be involved in leasing spectrum short of a clear verdict by the Courts. The Deputy Attorney General, as clueless about the technical nuances of CPNs, took the safe and easy route and responding to DOT’s seeking legal opinion, advised the auctioning of the spectrum.
This legal view has come as a boon to the Telcos who, dog in the manger-like, neither provide the services nor are willing to let economic entities fend for themselves by establishing CPNs. Telcos moreover wield a mighty political clout. There’s Mukesh Ambani with his Jio, Sunil Mittal with his Airtel, etc. And it is rumoured the Telecom minister, Vaishnav, is “in their pocket”. But acting on a cabinet decision is a difficult spot for Vaishnav to be in. The only way he is likely to be persuaded is if PM/PMO instructs him not to waste time and to forthwith allow CPNs. Considering the scale of economic gain India needs to obtain to match China just in the CPN area, what option does Modi have? Unless he too thinks that pandering to the Ambanis and the Mittals of the world will get the country where he wants India economically to be.
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