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100 Million Telephones
Monday, April 1, 2002
When everyone in India was celebrating birth of Mahatma Gandhi on October 2, 1997, Professor Ashok Jhunjhunwala of IIT Madras was stunned to read in the newspapers that the spectrum (1880-1900 MHz band) granted for his wireless project was no longer available, since it belonged exclusively to the military.

For Jhunjhunwala and his two IIT Madras colleagues in the Telecommunications and Computer Networking (TeNeT) group, this meant that all the money and time invested in the project was lost forever.

“More than the money, we were concerned about the time,” says Jhunjhunwala. “We had to get back to the drawing board and start from scratch. It would take at least another two years of effort to come out with a cost-effective wireless solution for this country,” he says.

Jhunjhunwala and his colleagues had a tough time convincing key decision-makers to give them the frequency clearance, even though defense authorities were more than eager to do their bit for an indigenously developed wireless system. The professor’s team went through many such hardships before the project made headway.

Early Days
Shortly after he began teaching at IIT Madras in 1981, Ashok Jhunjhunwala goaded some of his colleagues to start looking at the wireless industry. “Most of us were very theoretical people. We had not built anything, developed anything,” says the professor.

Luckily for him, Chennai-based WS Industries recognized the talent of the IIT team and helped them build multiplexers, which they were importing at the time. “With the large army of students, [and] some project staff, [we] started dabbling things,” says Jhunjhunwala.
He realized soon that most of the imported technology was of limited value in India because it was not affordable for most people.

Telenomics
Ask him what his project is all about or how his team is trying to transform the telecom business in this country, he will quickly open his laptop to display a convincing PowerPoint presentation. As he explains his project amid a torrent of figures, his eyes light up.

“A telephone [service] operator today spends around Rs 30,000 per line to provide telecom services to a subscriber,” he says, adding, “Taking into account finance charges on the investment, 15 percent, depreciation, 10 percent, and operation and maintenance cost, 10 percent, an operator needs at least 35 percent of the initial investment as yearly revenue just to break even. Add to this the license fees and taxes, and the revenue per subscriber needs to be at least Rs.1,000 per month. Now, what percentage of Indian households can afford to pay this much? Barely 1 to 3 percent. How does one then dream of 200 million connections?”

“If you bring down the investment needed for a phone line to Rs 10,000,” hopes Jhunjhunwala, “affordability of telephones could immediately go up to 30 percent of our population.”

corDECT
Cost reduction is not easy in telecom. To reduce cost by a factor of three would mean coming up with a path-breaking technology suitable for India. The TeNet Group seriously took up the development of a Wireless in Local Loop (WiLL) system, wherein instead of the last mile copper wire, radio waves link exchanges with homes. corDECT WiLL as it is known, allows simultaneous use of telephone and Internet connections.

Every house will have a subscriber wall set that transmits both the voice and data signals to an access center, which is located within a 10-kilometer radius (can be extended up to an additional 15 kilometers). Here the voice calls get routed to the telephone network and the Internet traffic is transmitted to the Internet backbone. This keeps data traffic from clogging the overly taxed and inconsistent Indian telephone network.

At present, corDECT technology can provide Internet connectivity at speeds of 35-70 kbps (kilobytes per second). Work is under way to ramp up this wireless system to 384 kbps.

“We’ve not yet reached the figure of Rs 10,000 per phone line. But we’ve brought down costs currently to Rs 18,000 per line,” Jhunjhunwala says.

Connectivity Inc.
Building corDECT technology was not the end game for Jhunjhunwala. The TeNet Group has incubated a few companies - Midas Communication Technologies, Banyan Networks, n-Logue Communications. corDECT is central to these companies’ business models. They are managed and run by Jhunjhunwala’s former students and entrepreneurs who have been inspired by his infectious optimism.

Big telecom operators are reluctant to invest in rural India, since they see no large business opportunity. But another Jhunjhunwala inspired company n-Logue Communications is going against that preconception.

The firm has fashioned a franchise-based business model that puts the farmer-entrepreneur in the driver’s seat. n-Logue offers low-priced “kiosk packages” consisting of a corDECT wall set, a computer, printer, telephone and backup battery. The kiosks essentially function as combination rural Internet cafes and pay-phone booths. A local service provider (LSP) works in tandem with n-Logue and controls individual kiosk operators within a region.

n-Logue is presently moving from its successful pilot phase to commercial ramp-up. It is currently signing up two to three new franchisee per month. P. G. Ponnapa, CEO of n-Logue predicts that most LSPs will find 500 to 700 subscribers within a 25-kilometer radius, making the investment worthwhile.

It is another company — Midas — that provides corDECT WiLL technology to large manufacturers. It has licensed the technology to five companies for commercial production — HFCL, Shyam Telecom, Crompton Greeves, ECIL and ITI Bangalore. Midas has deployed corDECT WiLL technology in parts of Rajasthan, Maharashtra, Andhra Pradesh, Madhya Pradesh and Tamil Nadu as well as 11 other countries across the world. The company is implementing projects to the tune of 60,000 lines in Madagascar, Fiji, Kenya and Brazil.

Ashok Jhunjhunwala constantly dreams about his “100 million” telephones. Could he be another Sam Pitroda? The professor’s dream of all Indian villages being networked with the corDECT technology is moving toward reality. “If we can't change it then who else will?” he says.
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