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June 9, 1997


New DoT setup may have second power centre

The Telecom Commission appears reconciled to letting a second power centre emerge in any future setup of the Department of Telecommunications but says it must retain its supremacy over policy planning.

Creation of a second entity entails transferring the Commission's member in charge of services to head a proposed corporate body to manage operations and development functions of DoT, a move being seen as an attempt to assuage feelings of technocrats in the department.

A status report on the seven-year-old issue of restructuring of DoT, however, strongly favours an interim reorganisation, preparatory to eventual corporatisation of the superstructure.

The proposed second force, named India Telecom, is the brainchild of D K Gupta who had himself served on the commission as its member, services, before being approached in 1995 to suggest a new structure for DoT in succession to one recommended by Dr Atreya, a management expert, in 1991.

The member, services, ranks second only to the DoT secretary who functions as an ex-officio chairman of Telecom Commission, set up in 1989 on the lines of the atomic energy and space commissions.

Within limits of budgetary provisions approved by Parliament, the Commission currently enjoys extensive executive and financial powers of the government of India to carry out the responsibilities and functions of DoT.

The report is non-committal on the timing of the interim setup, saying segregation of operations from policy functions comes as a 'logical step' following operationalisation of a regulatory regime in March.

It says such arrangement at this juncture would eliminate the need for largescale dislocations, save huge cost involved in the process of corporatisation and "should generally be acceptable to telecom employees as an interim step to prepare the ground for corporatisation at a later stage".

The Atreya Committee report had, in 1991, recommended splitting of DoT into six corporations, including a holding company, but a commission session two years later voted in favour of four zonal corporations to become effective from April 1995.

Action on the decision was abandoned following reservations expressed by a majority of telecom staff. Financial implications were another damper. The concept also clashed with the National Telecom Policy which provides for duopoly in basic telephone services, DoT being the sole competitor of a private licencee in each of the 21 telecom circles.

Discussions on the Gupta Committee report threw up two strands of views, first favouring conversion of the Telecom Commission itself into an operating arm with the government taking over its policy making and other functions not falling within the purview of the regulatory regime.

It was also felt that after two to three years of experience the commission could be converted into a corporation.

The other view which emerged was for taking a straight step towards a corporation which would provide more flexibility and powers to make the commission a stronger player for the competitive environment, providing also a solution to the problems of duality pertaining to the Mahanagar Telephone Nigam Limited.

Both these views were, however, disfavoured because of the difficulty in completely divesting the telecom commission of its policy functions and the ministry's inability to cope with the task of taking over the commission's role.

Additionally, this arrangement would have to require adequate autonomy for telecom commission to decide all matters having a bearing on operations without going to the ministry.

This meant the separation of the commission from the ministry which would then be playing the role of a licenser, policy maker, frequency manager and coordinator for interdepartmental and international organisations besides supervising the commission's functions.

The report says that after considering these drawbacks, the commission came to the conclusion that policy making functions should remain with it and the proposed India Telecom should function as an operating, development and maintenance body with a full-time chief executive.

This would help make this organisation dynamic, synergistic and responsive, both at the headquarters and in the field, the report said.

The headquarters of India Telecom, the report suggested, should become a compact nucleus with a number of posts restricted to a bare minimum through redeployment of requisite technical and financial manpower.

The task of managing DoT's 40 field units could be transferred to the headquarters of India Telecom which in turn would delegate adequate financial and administrative autonomy to the field units.

The commission suggested the posts of advisors in DoT could be transferred to become board of India Telecom which could have its own legal cell.

The report said there would be no change in the present status of public-sector undertakings, including MTNL, and the commission would continue to have its jurisdiction over them.

It favoured carving out of a telecom standards centre out of the present technical engineering centre to be attached with the commission with the original body assisting India Telecom.

The commission emphasised the role of training centres for upgrading skills of employees in the competitive environment and felt that the existing training centres at national and regional levels could be placed under India Telecom. The advanced level telecom training centre could be entrusted with providing technical guidance to all training centres.

The commission was of the view that these measures would strengthen the operating arm without carrying some of the liabilities associated with a corporate structure. Any need to create new posts for India Telecom could largely be dealt with through internal adjustment.

'However, one drawback of the proposal is that the problem of duality of DoT versus MTNL would not be resolved and raising of resources, through disinvestment, would not be feasible (without) incorporation of India Telecom at a later stage,' the commission added.


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