Rural Telephony Is More Lucrative: Itu Secy-General

It's a little ironical to have Dr Pekka Tarjanne, secretary-general of the International Telecommunication Union (ITU) speaking of the improving teledensity (number of telephones per 100 people) in rural regions of Asia Pacific. For Tarjanne hails from Finland, a Nordic country with one of the highest teledensities in the world. Sixty-year-old Tarjanne has a background spanning 35 years in engineering and politics (he was a member of Finnish Parliament from 1970 to 1977 and was minister of transport and communications from 1972 to 1975). He was first elected as the secretary-general of ITU in 1989, a post he was re-elected to in 1995. In conversation with Josey Puliyenthuruthel on the eve of Asia Telecom '97 being held in Singapore, Tarjanne stressed the need to expand telecom services into rural areas (in countries like India) even as intelligent applications like multimedia, tele-education and telemedicine are helping advanced economies like Singapore surf the information tsunami. Excerpts:

 

Q: It has been four years since the last Asia Telecom (which was also held in Singapore). What are the objectives of the conference this time?

A: Officially, our motto is sky is the limit (laughs). Personally, if I look at the direction in which we are headed, I see a lot of potential in the (Asia Pacific) region. There is wide diversity within Asia itself. There are 'performers' (economies on the high growth trajectory) and there are those which have not got into the mainstream. This kind of exhibition (Asia Telecom 97) concentrates on new technologies which help change that situation.

But we need to understand that technology is not everything. What is more important is the applications these new technologies are used for. It needs to be recognised that intelligent or knowledge-based services are those which will help change lives. (As a) matter of fact, the ITU is preparing for a new set of events like the Telecom Interactive '97 in Geneva and World Telecom '99 in Geneva. Telecom Interactive will concentrate on Internet and knowledge-based applications.

Q: Dr Tarjanne, it is a little ironical that in countries like Singapore, the government is set to announce a nation-wide high-capacity network with multimedia and knowledge-based applications (like tele-education); while countries like India struggle with a 1.4 per cent teledensity. The situation is worse in rural markets, How does one bridge this gap?

A: Each country has its own requirements. Some years back, out of the 600,000 Indian villages, 500,000 did not have access to a telephone. Now that number is down to 300,000. The lesson is that having a telephone in every village is possible. What is needed is a stable country-policy to get over this problem.

When I was in India in March, we (ITU) had discussions with the Indian government and officials about the WorldTel proposal (a $3 billion project to rollout telephone networks in Uttar Pradesh east, West Bengal and Kerala). The feedback then was positive, but the government has since changed.

Q: Since financing telecom networks appears to be the biggest hurdle to rollout of services, are there any initiatives apart from WorldTel that ITU can help countries with?

A: The ITU is not a bank; we're there just to facilitate the process of deregulation and restructuring. However, we do try to help in the little ways we can. We have projects on a cost-sharing basis with the World Bank, United Nations etc. These include application of new technologies, human resources development issues in telecom, feasibility reports etc.

Q: Telecom has been often described as the infrastructure of infrastructure. What is your message to Indian policy makers who are struggling to get over the low teledensity figures?

A: Let's look at it this way. The bad news is that the teledensity is as low as it is, but the good thing is that there is that much more potential (for new telephones) out there. Telecoms is by all yardsticks an immensely profitable business; well, at least it is good business. The key (for countries not performing too well) is to get into the growth mainstream with some good rates. And, more importantly, without overwhelming dependence on government finance.

My main message would be: as it is, infrastructure and other businesses cannot blossom without telecom. So, (to get over this problem, you need to) put in place a well-defined regulatory and restructuring process so that foreign capital can come in smoothly. Otherwise, the uncertainty will mean that the capital will come in only to go back after a few years.

A good feature of India is that there is a balance between urban and rural markets. The network is not concentrated in urban markets. This will result in a kind of equity in the country and ensure that migration from the villages to cities does not take place. There are private companies which say that there are no revenues in the short term, but this is not true. Don't look at it for three-four years; look at it as a nine-ten year project. Then, you will see that rural telephony is more lucrative than urban telephony.