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Do we want to be cyber coolies or cyber masters?

By Colonel Dr Anil A Athale (retd)
February 14, 2005 14:27 IST
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Here is an instance of the short-term policy destroying the long-term future of the country. Despite many efforts at quiet lobbying the ghost of 74 per cent foreign direct investment in the strategic telecom sector has reappeared.

This is one instance where the Left is right in its opposition. No major country in the world -- China, France or the United States -- permits more than 49 per cent foreign stake in telecom.

While getting foreign capital that is attracted by lure of profits is fine, there is also the issue of control. Would the supporters of foreign control in the telecom sector explain why countries like France or China do not permit it?

The telecom sector is not merely cellphones. Today it embraces the entire spectrum of communication technologies from broadband, wireless communication and control, global positioning systems and soon enough control of financial sectors, power sectors and dissemination information through DTH or direct-to-home television and at some future date even interactive television.

The importance of the telecom sector in surveillance and targetting was brought home when an unmanned American aircraft accurately targetted a terrorist travelling in remote deserts of Yemen!

Have we forgotten what the foreign oil companies did to us in 1965? When at a time of war they starved us of oil supply! Who is going to be held responsible if the telecom infrastructure is used by our adversary in times of crisis (or even peace time) to target our vital installations?

It is not just a matter of phone tapping but goes much deeper into the control/denial of electronic spectrum to would-be adversaries. To want to hand over the control over such potent instrument to foreign capital is sheer madness.

The very fact that the government has put in place restrictions like an Indian CEO et al shows that even the supporters of this move do accept that there are indeed security issues involved. Unfortunately their method to tackle it shows naiveté of a high order bordering on moronic.

The recent case where an Indian telecom company allegedly showed international calls as domestic calls shows what is possible. In this case the company could be hauled up since it is Indian, but what if it was a foreign-controlled one like Union Carbide?

The alternative

The basic argument to invite dominant stakes in telecom centres around the need to invest close to $20 billion in the sector, money that the Indian companies claim not to have. The second argument is that once the foreign stakes control the telecom, latest technology would be brought to the country.

India and China combined are today the biggest users of cyberspace in terms of number of computers and cellphones, etc. While India has an edge in software China is ahead in software. If the two countries combined their strengths and created their own software/hardware, they can reverse Bill Gates.

As the biggest market, it is India and China that should be dictating the terms and not the West. But once India mortgages its telecom to private companies there is no future for this initiative. With enough money we are today in a position to outright buy technologies needed, and it is available from variety of sources: France, Germany, Finland, the United Kingdom or the United States.

Once purchased, India would be free to improve and innovate on it and create our own unique operating systems, protocols and even hardware.

The immediate need to increase teledensity and usher in broadband revolution is unquestionable. Spread of broadband is especially necessary if we are to upgrade the educational system in far-flung areas and bridge the digital and knowledge divide in the society.

This is an infrastructure area and Dr Montek Singh Ahluwalia's suggestion that we use our huge forex reserves for infrastructure development should be equally applicable to the telecom sector.

This is one sector where the foreign investors are rushing in because of its profitability and quick returns (unlike say road or ports projects) and thus the government investment can be recovered reasonably quickly.

But the biggest argument against the foreign takeover of the telecom sector is long-term national interest. We have seen many talented Indians developing useful technologies like the Professor Jhunjhunwala group at IIT Madras or IIT Bombay.

There are many small companies in Pune who are working on soft silicon and imbedded software/processors. Once we hand over control of the telecom sector to foreign interests, they would dictate the choice of hardware and software.

Thus we perpetuate dependence on the West for the future. Indian technologies then languish and ultimately die. The question is: Do we want to remain cyber coolies or want to aspire to be cyber masters?

Today India is one of the biggest telecom markets. We can well dictate terms in matters of technological choices and take control of our destiny. Must Indians (like entrepreneur and venture capitalist Kanwal Rekhi) continue to design chips for Intel? Why can't we have an Indian Kanwal Rekhi?

All this needs to be pondered over before we take the plunge to barter away our future security and prosperity for transient gains like the Nawabs of Bengal who for the sake of revenue got in the East India Company. Telecom is a strategic sector that has repercussions on information, economics, intelligence and military operations.

Majority stake in this sector to foreign nationals compromises national security. It is interesting that just at the time when China is buying up American companies (and also Indian ones through their Singapore proxies), we in India want to handover our advantage in IT sector to outsiders.

In the long-term, leveraging our advantage in IT we can actually dominate the world cyber space. Instead of this if we hand over the IT sector to foreign capital, in the future they will dictate the hardware, operating systems and protocols, thus thwarting Indian development in this field and denying us the major source of earning due to our knowledge advantage.

History will not forget or forgive if we persist in this folly.

Colonel Anil A Athale (retd) is Coordinator Inpad (Pune-based Initiative for Peace, disarmament and security).
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Colonel Dr Anil A Athale (retd)

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