China 3: Build Comprehensive Ecosystems

Posted by Shyam Ponappa at May 01, 2012 04:47 AM |
Failures in electricity, transport and broadband have common strands. China's approach offers a possible alternative. Shyam Ponappa's column was published in the Business Standard on April 5, 2012.

India’s inability to address infrastructure is legendary, barring historical exceptions. It shows in electricity shortages, inadequate sanitation, broadband, railway services, airlines and roads. This explores the common strands of such failures, and a possible alternative drawing on China’s approach to development.

Electricity shortages are attributed to a tangle of factors: difficulties with fuel supply – for instance, for coal, there are problems in mining, and unrelated problems in transport, including the limitations of the railways – or the difficulties with nuclear and hydroelectric power development faced with overzealous activism, aggravated by the government’s poor record of compensation to affected people; unsustainable populist pricing; a lack of integrated planning (for example, generation capacity without linkages to fuel); and poor execution.

In transportation, there’s another tangle in the railways, with populism and deteriorating finances, yet making plans for super-fast trains. Airlines are treated as either a milch cow for government revenues or a sacred cow when it comes to providing endless, unviable subsidies.

Consider, also, spectrum and broadband. After mobile telephony’s meteoric rise, prospects of growth with pervasive broadband are receding, with little indication of supportive policies from the erstwhile New Telecom Policy, or NTP-2011, now NTP-2012-if-we’re-lucky. The episodic pronouncements and actions have been retrograde, such as the “tax attack” on Vodafone after the Supreme Court dismissed earlier tax claims, or the withholding of Qualcomm’s spectrum until recently. Worse, there’s an apparent pincer movement undercutting 3G by prohibiting roaming, while announcing spectrum auctions with hardly any spectrum available. Defence spectrum release has stalled, as Bharat Sanchar Nigam Limited has not built the alternative fibre optic network. Consequently, the department of telecommunications has only 150 megahertz of spectrum for commercial use, of which only 5 MHz remain for 3G. Combined with the prohibition on roaming, this effectively stymies 3G.

There’s more pressure on GSM operators coming up to “refarm” the 900 MHz spectrum when licences are renewed from 2014 to 2016. The best solution for incumbents as well as others without bandwidth below 1 gigahertz is to share networks. This would seem an obvious solution for 3G as well, and might even trigger or revive other technologies because spectrum is available, just as the dearth of spectrum may contribute to the untimely exit of WiMAX (802.16) or iBurst (802.20).

However, restrictions on roaming and insistence on spectrum auctions will ensure that spectrum sharing is either impractical or legally infeasible. This means India will deny itself the benefits of developments in spectrum sharing in TV white spaces in the US and in the UK, including its possible extension to other bands.

Comprehensive Ecosystems

Systematic plans to cripple our electricity, airlines, or telecommunications sectors could not do worse. Is there a way to break out of this downward vortex? There could be, if the government took a problem-solving rather than a revenue-seeking approach, and sought to develop comprehensive, integrated ecosystems over a reasonable period.
 
Consider China’s approach to information and communications technology, epitomised by Huawei’s iconic position today. It is comprehensive, thorough and integrated, with the goal of significant scale and dominance. It covers the complete ecosystem, starting with education and training. Technology is a thrust area for economic growth, with many large universities, encouragement for graduate studies abroad, incentives for the diaspora to return, opportunities and support for faculty entrepreneurship, and encouragement for publications and patents. Infrastructure needs are well addressed. Manufacturing covers everything from wafer fabrication to chip design and production with vertical integration, a full range of products from supercomputers to gadgets, software development, telecommunications, the gamut of services including management, design and development, software products, and systems integration and support. There are sustained, long-term policies including restricted international entry in several domains, intellectual property laws, and incentives such as subsidised finance and purchasing support over decades. Together, they provide conditions for building immense scale.
 
What shows is thorough process planning, with follow-through in execution. Beginning with a comprehensive process flow design, they have filled the boxes in the flow chart with the constituent items in phases, each element resulting from its own process flow chain, with interim support for unconnected elements and activities. It shows multi-domain expertise and co-ordination across the board, aligned to achieve all the steps from initial goal setting to desired end results.
 
By contrast, India’s approach seems episodic. There is lack of clarity or agreement even on goals. The wrangling on spectrum is a case in point. The clamour for short-term government revenues is diametrically opposed to achieving ubiquitous, reasonably priced access, which from a logical perspective seems an unexceptionable goal for communications infrastructure. But opinionated views are expressed with scant regard for expertise or the lack of it, with little knowledge or understanding of the technology, finance, systems, or commercial logic.
 
To embark on a process as in China, there is a need for co-ordination of expertise from multiple domains, and aligned goals. For this, we must understand our limitations, and accept that reality may extend beyond any individual’s subjective grasp and limited frames of reference. The parable of the blind men and the elephant is apt. The following example illustrates this with reference to the optical spectrum.
 
What do we mean when we say something is “red”? It means there is light with a frequency of 400 terahertz to 480 THz depending on the shade of red, corresponding to a wavelength of 740 to 620 nanometres. That is the reality. Many of us see red as it is, and as others see it, but people with certain kinds of colour-blindness may see a shade of grey. Some of them may be unaware that what they see is different from what others see. This is illustrated in the different perceptions of a red Himalayan balsam (see diagram below). 
 
Himalayan balsam
 
Therefore, to understand how different stakeholders are affected, it is necessary to understand their perceptions and how reality affects them. It is imperative to seek inputs from multiple domains and stakeholders on the facts as we think we know them, and to co-ordinate these inputs in planning a process and its implementation. The more comprehensively we do this, the better. 
 

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