The Pitfalls Of Power Sharing

A panel led by the Telecom Secretary is working on a grand alliance between the different bodies of the Department of Telecommunications, according to Economic Times.

The panel will define the role of each telecom PSU member in the proposed alliance, iron out potential conflicts of interest, and formulate an asset-sharing and product-procurement model to optimize central sector resources, says the news report.

This is nothing new and has been an endeavor of DoT in the past as well. Last year, there was a proposal to bring out synergy between the two government-owned service providers, Bharat Sanchar Nigam Ltd. (BSNL) and Mahanagar Telephone Nigam Ltd. (MTNL). (See BSNL + MTNL: Could It Work? and India's Shotgun 'Wedding'.)

This alliance, however, seems to be a bigger initiative which involves other subsidiaries of DoT such as the Centre for Development of Telematics (C-DOT) and ITI Ltd., besides BSNL and MTNL.

All of DoT's subsidiaries have not been able to fight the competition from private players. C-DOT has been lagging behind other players. BSNL, MTNL and ITI have been recording losses for some time now. Though BSNL and MTNL were allotted 3G spectrum much before the private players, they were unable to leverage it to their advantage. These kind of initiatives will go a long way in helping the government bodies leverage their strengths and to take advantage of in-house competencies.

There are, however, many challenges for this kind of alliance. The prime one being the way the government machinery works in India. To begin with, coordination between different companies has been largely ineffective. It would be too much to expect as a happy marriage between different government bodies who might want to put their own interests on top priority.

Hence, in spite of best intentions, the government might find it difficult to implement such a proposal.

-Gagandeep Kaur, Editor, Light Reading India