mobile edge computing will transform the telecom industry
This is a time when, as the authorities deal with a lockdown, there needs to be an equal emphasis on providing for large numbers of people without the money for food and necessities, while the rest of us wait it out. Hard as it is, an MIT scholar writes that after the Spanish flu in 1918, cities that restricted public gatherings sooner and longer had fewer fatalities, and emerged with stronger economic growth.1 It is likely that costs and benefits vary with economic and social capacity, and we may have a harder time with it here. Going forward, government action to help provide relief, rehabilitate people and deal with loss needs to be well planned, including targeting aid to the urban and displaced poor.
As important now as to ensure the lockdown continues is to plan on how to revive productive activity and the economy, and restore public confidence. A systematic approach will likely yield better results.
A major element of the recovery plan is steps such as liberal credit and amortisation terms, perhaps much more than the three-month extension the Reserve Bank of India (RBI) has announced. A primary purpose is the re-initiation of large-scale activities such as construction, of which there are reportedly about 200,000 large projects around the country. These have to be nursed back to being going concerns. The RBI may need to consider doing more, including lowering rates.
An ominous development that has grown as the economy slowed is financial stress that could swell non-performing assets (NPAs). At the half-year ending September 2019, about half of non-financial large corporations in India, excluding telecom, showed financial stress
These include some of India’s largest companies, producing power, steel, and chemicals. The 201 companies have total debt of nearly Rs 15 trillion, more than half of all borrowings. There is also the debt overhang of the National Highways Authority of India, and of the telecom companies. Ironically, the telecom companies are our lifeline now, despite having nearly collapsed under debt because of ill-advised policies in the past, which have still not changed. Perhaps our obvious dependence telecom services now will spark well conceived, convergent policies for this sector, so that we can function effectively.
A start with immediate changes in administrative rules for 60GHz, 70-80GHz, and 500-700MHz wireless use, modelled on the US FCC regulations as was done for the 5GHz Wi-Fi in October 2018, could change the game. It will provide the opportunity in India for the innovation of devices, their production, and use, possibly unleashing this sector. This can help offset our reliance on imported technology and equipment. However, such changes in policies and purchasing support have eluded us thus far. Now, the only way our high-technology manufacturers can thrive is to succeed internationally, in order to be able to sell to the domestic market. Imagine how hard that might be, and you begin to get an inkling of why we have few domestic product champions, struggling against odds in areas such as optical switches, networking equipment, and wireless devices. For order-of-magnitude change, however, structural changes need to be worked out in consultation with operators in the organisation of services through shared infrastructure.
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