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Cable, Mobile, Internet

, August 23, 2013, 1 Comments

While on a visit to Sikkim, I once asked my driver whether he was satisfied with the infrastructure and public services available in his state. He appeared to be totally dissatisfied and had all sort of complaints about the services available. Then I asked him how many TV channels are provided by his cable operator. Now his face lit up and in a jubilant and triumphant way he explained that all TV channels which is available to us in Delhi are available to him in the Sikkim capital also.

Now cable TV is an area where the government has made very little investment. Of course, the government has invested in a number of Doordarshan channels. But this was not what my taxi driver was referring to. TV channel signals come from the satellites above and the road and other transport bottlenecks which are a characteristic of the hilly state of Sikkim does not obstruct availability of cable TV signals in their homes.

Provision of internet services is another area where the role of the government is minimal. This is again another area where the task of providing services is best left to the private sector. Needless, to say, the private sector is playing its role eminently well. Of course an authoritarian government such as in a totalitarian state can inject considerable damage to the free flow of information in their country and impose all sort of restrictions on internet usage. Fortunately we have a liberal democratic political system in our country and we have freedom of speech as the hallmark of our democracy. Left to themselves internet facilities will continue to expand as required and demanded by the public. The role of the government in this field will only be to lay down a liberal regulatory regime and the private sector will take care of the rest.

The third pillar of this electronic trinity is the mobile telephony regime. Here again the government has made modest investment in MTNL and BSNL mobile services. But the bulk of the investment has come from the private operators. This is another sector characterized by rapid expansion and here again the role of the government is only to provide a fair and liberal regulatory regime.

Mobile telephony is an area with immense potential when one considers the possibility of expanding mobile banking services. In India there are severe constraints in expanding terrestrial banking services in rural areas. But no such constraints exist in the case of mobile banking. There were constraints in expanding landline telephone connections in our country particularly among the poor and in rural areas. But mobile telephony has overcome all such barriers and mobile telephones are fast emerging as a poor man’s communication medium.

There is a basic difference between internet banking and mobile banking which has to be taken note of. The difference relate to the sophistication in the nature of these operations. Internet banking is a rich and educated man’s medium and this will remain so since the penetration of internet services to our homes is limited. Only a rich man can afford to buy a computer and only an educated individual can operate internet banking services.

The case with mobile telephony is in total contrast to this. A mobile telephone can be easily purchased by a poor man and many of them already own them. Furthermore, conducting mobile telephony operations is a much less sophisticated venture as compared internet banking. A less educated person finds it difficult to operate a computer but he has no such difficulty in operating a mobile phone which he is already doing. In the future he is going to take to mobile banking in a big way just as he has taken to mobile telephony. The strength of mobile banking will be that we will be able to expand it in rural areas and we will be able to extend such services to the poor and less educated people.

There is a tremendous potential of expanding mobile banking services to the poor and less educated people in rural areas. Mobile telephones have already emerged as the most preferred communication medium of the poor. Cable TV services have penetrated the length and breadth of the country and could emerge as a very powerful, educational and entertainment  medium. Use of the internet is spreading fast particularly among the youth; but expansion of this service in rural areas and among the poor will be slow.

The government need not consider making financial investment in these sectors. It only has to lay down a liberal and fair legal regulatory regime for these electronic media to grow and flourish. However, the government should be careful to see that it does not take any adverse measures which can kill the goose that lays the golden egg.

  • Mukesh Kamath

    Well i see lot of scope in mobile banking just like you. The problems have been more with the regulatory issues. RBI is not allowing telco led banking services over mobiles and wants banks led model where telcos are just a partner. Whatever it is new governor might make it easier for mobile payments to take root. IMPS is a very complicated system. I own a computer to access internet at home but not a smartphone. You might call me an early user of the IMPS as i am going to try it out soon. Hope everything goes well.