• JANUARY 3, 2003

Customer is King

2003 may well be one of the most exciting years for the Indian consumer. For one, we are likely to see the disappearance of national boundaries as far as telecom services are concerned. Thanks to competition, cellular operators are now giving consumers even more choices, at a cheaper cost.

Yesterday, cellular operators cut their long distance rates to Rs 3 in response to Reliance's aggressive pricing. What this illustrates is that once an industry is opened to competition, demand and supply factors take over and the ultimate beneficiary is the consumer. It was not long ago that cellular service providers used to charge nearly Rs 16 a minute for local calls. Competition has ensured that this has been brought down to a fraction of this amount.

For once, to the government for enacting policy decisions in the telecom services arena. Though there are still fundamental issues that have to be resolved before these policies provide a level playing to both basic and cellular services providers, the important fact is that these benefits are here to stay. The spoils of increased competition may not be limited to the mobile services arena but may spread to the basic services too.

Similarly passing of the law on conditional access has also gone a long way in giving the consumer freedom regarding the kind of channels he wants to watch. Again the stimulus was the government policy focusing on the consumer.

Tip of the Iceberg...
India FY00 FY01 FY02
Telecom sector      
Teledensity 2.7% 3.6% 4.0%
Teledensity in USA 66%*
Irrigation sector      
India-Food grain yield (Kg/ hectare) 1,704 1,636 1,723
World-Rice yield (Kg/hectare) 3,845**
Power sector      
Capacity in Dec. 2001 (MW) 103,134    
Additional capacity required by 2012 (MW) 100,000    
* 2002 figure, ** 1999 figure

Now one is looking at more such decisions in the area of electricity generation, water supply and irrigation. It is a known fact that availability of cheap and abundant power is a prerequisite for industrial growth. Successive governments have tried their best to open up the power sector, but reforms have trudged along at a slow pace. We can just hope that the transformation of the telecom sector can infectiously affect those in power for power reforms.

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