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.
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