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Can the global mobile telecom industry help lift the world out of recession? At the recent G20 Summit in London, the world GSM association claimed that telecom could change the fortune of the world and pull it out of recession. In order to convince G20 leaders to take them seriously, the GSMA also gave them a letter signed by CEOs of the world's top 25 mobile companies including AT&T, Bharti, Deutsche Telekom, MTN, Orascom, Telefonica, Telecom Italia and Vodafone, and vendors such as Nokia and Ericsson. And further stated that they would be able to pump another $550 bn in network roll-outs. What they wanted in return was a lighter regulatory regime including allocation of radio spectrum needed over time to build these new networks.

Unfortunately, there has not been any significant response to this offer so far, despite the fact that communications has done and has the potential to do amazing things with economies and its people.

What the G20 leaders seem to be missing out is that while so many other industries are shouting for rescue, the mobile industry is still very strong financially and not asking for a bailout. On the contrary, they want to invest a huge amount of money in mobile broadband networks which could quickly result in tangible benefits such as supporting and feeding the periphery industries from tower construction to content and VAS players. The net result is likely to be the creation of 25 mn new jobs. What better things can one ask for during such tough times?

While political leaders and governments across the world have blamed corporate greed for the current state of affairs, the fact is that the government has also been equally greedy. The experience of 3G licensing and its negative impact on telecom is a great case study. If governments repeat that mistake, it is going to a sure recipe for more disaster.

However, at a time when near total freedom to the corporate world is being cited as the reason for the collapse of various industry sectors, reducing regulations for telecom will invite a lot of opposition. Telecom might have escaped the current economic downturn and might be critical, but the fact is that this is one sector which has perhaps also seen lots of controversies related to regulatory matters and business practice. Operators as well as equipment vendors will have to really convince government heads to get them more business freedom.

Critics believe that this offer from the big 25 could actually be aimed at strengthening and consolidating their positions in their respective countries and geographies. In the process the smaller and regional players could get further marginalized. On the other hand, the current economic crisis and the offer from the industry provides an excellent opportunity to many governments to really work out a national road map to make life easy for operators and vendors, whether big or small. Both sides will have to strike a right balance of deliverables if this offer has to materialize.

Ibrahim Ahamad
ibrahima@cybermedia.co.in