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Exploring new avenues in convergence

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CIOL Bureau
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NEW DELHI: Fanning the tide of convergence sweeping across the globe, the latest among

the utilities to join the convergence bandwagon is the power sector. Many power companies

in recent months have announced their intention to move into telecom. Power Grid, state

electricity boards, and the most conspicuous of all, BSES, are some prominent names to

have taken their initiatives into the telecom sector. However, the road to transition is

by no means smooth. To address issues related to it, a two-day seminar was organized by

Assocham and the Independent Power Producers Association of India (IPPAI) in association

with the Ministry of Power during 19-20 May.

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The technical sessions explored areas like the emerging business paradigm; last mile

connectivity in convergence; legal issues arising out of the convergence of power,

telecom, IT, cable and media as well as the regulatory aspects in these sectors. Some

prominent speakers on the panel included US Ambassador to India Richard Celeste, DoT

Secretary Shyamol Ghosh, BSES CMD RV Shahi, Enron South Asia CEO Sanjay Bhatnagar, UTV

Interactive CEO Biren Ghosh, Dr Allan Finder from Arthur Andersen and Addl. Secretary from

the Ministry of Telecom Dhanendra Kumar.

A very pertinent question raised during the discussion was whether the power companies

should themselves enter into the services segment or simply provide right of way or lease

the infrastructure. The participants were of the view that only very committed players who

had strong financial backing should opt for the services since telecom is a very

capital-intensive segment with delayed returns. The most viable business model was to

lease infrastructure or to provide right of way. In fact, there was some strong advice for

SEBs to adopt a wait and watch policy before finally taking the plunge into telecom.

A number of policy issues were also raised. These included the differential licence fee

structure adopted by local municipalities for laying cables, the NTP ’99 that does

not allow inter-circle connectivity, and the question of whether power companies should be

allowed to utilize their infrastructure for commercial reasons other than power

transmission.

Another interesting issue taken up by the forum was last mile connectivity. Although

fiber-optic is a robust solution, in this age of wireless it is only prudent to think

twice before making huge investments. Enron CEO Sanjay Bhatnagar cited a case in the US

where an operator was using laser technology to provide 2 Gbps connection in the last

mile, using spectrum, which is not regulated. With telecom technology evolving at such a

pace, decisions need to be taken at the speed of light, he said. However, the most

exciting development is that some operators in Europe and the US are toying with the idea

of providing data and voice through the same pipe that brings in power to homes. It is

possible to separate the signals travelling through the same pipe and such technology is,

in fact, in the testing stage. And when that happens, it can be said that convergence has

truly arrived at our homes!

This article originally appeared in CIOL dated 20/05/00

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