The Way Forward With The GramPhone

1
The Way Forward With The GramPhone

• RTFs Presentation to BSNL Committee
• July 25, 2003
• www. RuralTelecomFoundation. org

2
Is There an Innovation Whereby ..

• BSNL can make Rs. 450 per line per month on
  rental alone
• And

Rural customers willingly pay that amount because
it satisfies their telecom needs?
3
A Three Pronged Approach
RTFs Suggestion to BSNL

• A Viable Tariff Provides revenue _at_ Rs. 450 per
  line per month to BSNL

• Acceptable Value Fulfills 90 of the
  customers telecom needs

• Affordability to a Rural Household At Rs. 50
  per month
• (2.5 of family income)
• ( one days wage of a male labourer)

4
An Innovative Package with GramPhone

• Tariff
• SDCA Package Rental Rs. 250 per month
• 91 Area Package Rental Rs 500 per month
• SSA Package Rental Rs 700 per month
• Value
• Unlimited calls in SDCA
• Unlimited calls in neighbouring SDCAs 91
  area
• Unlimited calls in SSA
• GramPhone makes it affordable

5
GramPhone Fulfills Obligations

• 2 Million franchisees
• The cheapest Micro-Manual Exchange
• Smallest switch with highest intelligence ?
  better than any EPABX system
• The cheapest operator at Rs. 600 per annum
• 20 Million additional people on whom calls can
  terminate

6
Popular Demand for GramPhone

• Ankuram, a Dalit Collective ready to connect
  10,000 member families immediately
• Self Help Groups (SHG) most suited to quickly
  utilize GramPhone
• Incumbent upon BSNL to publicize this affordable
  solution leave it to the customer groups to
  finance in any suitable way

7
The Way Forward

• BSNL to recommend to Government to issue policy
  directive to TRAI for selective deployment of
  flat rates
• for revenue maximization
• Provisions under TRAI Act

8
Directive from Union Government to TRAI

• Under Chapter 6, Section 25, TRAI Act
• Power of Central Government to issue directions
• The Central Government may, from time to time,
  issue to the Authority such directions as it may
  think necessary in the interest of the
  souvereignty and integrity of India, the security
  of the State, friendly relations with foreign
  States, public order decency or morality.
• Without prejudice to the foregoing provisions,
  the Authority shall, in exercise of its powers or
  the performance of its functions, be bound by
  such directions on questions of policy as the
  Central Government may give in writing to it from
  time to time
• PROVIDED that the Authority shall, as far as
  practicable, be given an opportunity to express
  its views before any direction is given under
  this sub-section Contd..

9
Directive Contd ..

• The decision of the Central Government whether a
  question is one of policy or not shall be final

10
Chapter III, Section 11, Proviso Under
Sub-section 2 TRAI Act

• PROVIDED that the Authority may notify different
  rates for different persons or class of persons
  for similar telecommunication services and where
  different rates are fixed as aforesaid the
  Authority shall record the reasons therefor.
• BSNL will have the liberty to selectively offer
  the package based on operational convenience

11
Rationale for Flat Rates

• Historical
• Indian Telecom, Madras 1892
• Flat rates in use in Hyderabad exchanges till
  July 16, 1953 - Deccan Chronicle Report (July 3,
  1953)
• International Practices
• SBC California Combination of flat rate and
  toll/pulse billing system
• Other telecom companies including rural service
  providers implementing flat rates for local calls
• NY Times report on ATT going for flat rates
• Technological
• Technology now permits revenue optimization
  through flat rate tariffs

12
The Flat Rate Experiment

• BSNL and RTF to jointly implement the flat rate
  experiment
• Start with a baseline survey of all relevant
  parameters covering Parvathagiri Exchange
• ? Incoming and outgoing traffic ? STD/PCO bills
• ? STD Traffic (0 dialing) ? Fault rate
• ? Individual bills ? Traffic pattern
• ? Non-STD long distance traffic (95 dialing)

13
The Flat Rate Experiment (contd.)

• Components and Responsibilities
• Financial BSNL
• Materials Suggested by RTF/ Procured by
  BSNL
• Publicity Content by RTF/ Broadcast by BSNL
• Marketing RTF
• Installation BSNL
• Monitoring BSNL
• Sharing of info RTF/ BSNL

14
The Flat Rate Experiment (contd.)

• Expected Outcomes
• Demonstrate increase in per line revenue
• Demonstrate increase in total revenue
• Increase in customer satisfaction
• Preparation of GramPhone Manual

15
Perils of Remaining Passive

• BSNL presently gives 75 free calls per line in
  rural areas
• Party line users presently share these free calls
  among themselves
• BSNL will have to comply with a party line users
  demand for 75 free calls each
• because ..

16
Party Line User Rights

• Party lines are envisaged in Indian Telegraph
  Rules 1951, 2 ff.
• India is a signatory to the Annexure on
  Telecommunications under GATT Section 7
  (Uruguay Round)
• International Telecom Union recommends the use of
  party lines
• Party lines have been implemented by DOT earlier

17
Party Line User Rights Contd ..

• India is a signatory to UN Millennium Development
  Goals
• Target 18 - In co-operation with the private
  sector, make available the benefits of new
  technologies, especially information and
  communications
• BSNL is a PSU, bound by the preamble of the
  constitution and fundamental rights, in
  particular Article 39 (b)
• Article 39 (b)The State shall direct its policy
  towards securing that
• the ownership and control of material resources
  of the community are so distributed as best to
  subserve the common good

18
Further Advantages to BSNL

• Helps fulfill USO
• Rent is divisible by number of people sharing the
  last mile Subsidy not divisible as its based
  on individuals
• More consumers served by same staff will reverse
  the trend of declining Operating Ratio

19
Summary

• Flat rates and party lines pave the way for
  extensive rural coverage
• Will transform the loss-making nature of rural
  telecom business
• Fits in with current international best practices
• Required by constitutional and international
  obligations
• Nationwide implementation in one year