Switched Off

Busting the myth of normalcy, the union government has banned prepaid cellular service in J&K in a move that shakes four million users, seven telecom companies and hundreds of jobs – a Rs 1300 crore industry. A Team KASHMIR LIFE report.

In 2003 when the civilian government fought a pitched battle with the security establishment over the introduction of mobile telephony in J&K, the television screens were almost on fire relaying pictures of long queues waiting to get registered. Security forces had the apprehensions that the facility will be used by the fugitives, already ahead of them in communications.

Post introduction, interestingly, the first offence was committed by the security forces when a DIG officer of the BSF intelligence used his cell phone to hurl threats to a reporter. The officer was unhappy over the way an incident related to BSF was reported. The then IGP Kashmir K Rajendra Kumar said it was a case of criminal intimidation but no FIR was registered. The officer was, however, shifted.

In subsequent years, as the cell phone started acquiring a vertical growth trajectory, the security establishment used every occasion to blunt its influence. For the initial three years the pre-paid could not take off. Then lifetime validity SIMs were banned. At the peak of 2008 agitation the SMS was banned and after the fires were doused it was only the intervention of the apex court that helped. In recent past, service providers snapped services to tens of thousands of mobiles for want of fresh customer point verification(CPV).

Within a few weeks after the Home Minister P Chidamabaram hinted at “temporarily banning” the pre-paid service, the decision was served barely a day after the Prime Minister said the good old days of Kashmir are back. The few line order is a huge decision. It does not involve only the Rs. 2500 crores investment that six cellular operators have made in last few years or the Rs. 1200 crores yearly turnover with thousands of workforce likely to get affected at the peak of recession. At stake is the trust deficit involving almost half of J&K population and the credibility of the claims that Kashmir is finally back on tracks.

Kashmir’s encounter with cell phone has been a phenomenal story. In September 2004 when BSNL’s monopoly ended with the entry of Bharti Airtel, there were 113416 post paid users in 14 months. Though the BSNL owned the backbone and was the sole player, it did prevent the abrupt growth of the sector (using point of inter-connectivity) but it could not do it for long. The entry of Dishnet Wireless (Aircel) made the competition much fierce and by December 2007 BSNL was No 2, controlling only 43.32 percent market.

Now when the ban is going to close more than eighty percent of the over 52 lakh cell users, the situation is totally different. By the end of September, there were 4849133 mobile users being serviced by seven operators as Idea Cellular, the seventh, had just made its entry in Jammu. Right now, Bharti Airtel is holding 39.24 percent of the market, followed by 23.81 percent by Dishnet Wireless, 18.31 percent by state owned BSNL as Reliance had 6.36 percent, Vodafone 3.58 percent and TATA Indicom 1.97 percent. For the first time has Kashmir actually witnessed the vibrancy of India’s corporate.

The talkative Kashmir has helped the operators in minting money. For a long time J&K was topping the average revenue per unit (ARPU) in India’s periphery. It started with phenomenal Rs. 896 in October-December 2004 and it is still is hovering around Rs. 250 to Rs. 350. The monthly growth rate remained impressive throughout.

The earnings continue to be a fortune. In 2004-05, the two operators (BSNL & Airtel) pocketed Rs. 103 crores that jumped to Rs. 276.28 crores in 2005-06, Rs. 493.35 crores in 2006-07 and Rs. 800.31crores in 2007-08. In the last financial year, it created a record as the operators raised Rs. 917 crores. By the end of June, the operators had already earned Rs. 274.98 crores!!!!

But that is only one side of the story. Cellular operators require massive investments to earn big bucks. The users equally need good one-time investment like getting a handset to subsequently remain hooked to the line and pay. Right now, in Kashmir alone, there are 382 businessmen who are totally into selling mobile handsets with a monthly business of more than Rs. 21 crores. Jammu has Rs 10 crores monthly turnover.

It started with phenomenal Rs. 896 in October-December 2004 and it is still is hovering around Rs. 250 to Rs. 350. The monthly growth rate remained impressive throughout.

Right now, says Shabir Ahmad Gojwari, the regional distributor of Samsung, Kashmir requires a staggering 60,000 mobile handsets every-month and so far it was growing steadily. The market leader Nokia has as many as 17 distributors in Kashmir controlling around 55 percent of the market share and Samsung is playing the second fiddle with around 13 percent. Rest is shared by LG, Spice and other brands but interestingly the Chinese makes hold 20 percent of the market share.

“There are 25000 outlets selling recharge across J&K who make a good earning,” says Shabir. “Almost sixty percent of them are in Kashmir alone.” For servicing such a huge number of users, there are thousands of people involved in the servicing of sets in organized and cottage sector. “It has emerged as a sector that earns for itself and others,” he insisted.

The impact, Shabir says, could be crippling. “I believe it is the pre-paid load that makes this sector and if it is banned it will hit hard everywhere.” He also runs the Vodafone in Kashmir and has 17 employees, mostly involved in selling re-charge to around 400 retailers. “If pre-paid is banned, they may not be required as there is nothing to do,” Shabir said.

Operators are shocked. “The impact will be massive,” admitted a senior BSNL executive. Though it claims it has the largest number of post-paid users, the officer said the most of the private sector players will be hit because they solely rely on pre-paid customer. “For the few days the existing recharges will power the sets, the real impact will be known after a fortnight,” he said.

The shock is much visible in the private sector. “Really”, responded the Reliance India Mobile executive. “Please wait, let me check, I will come back to you,” he said from Chandigarh. He was not accessible till late in the night. Bharti Airtel, the market leader is yet to understand the nuances of the order. “It is too early to comment. We are actually waiting for the copy of the order and after going through that we will be able to comment,” one of its senior executives said. The officer did not offer any idea of the direct and indirect employment they generate, an issue every corporate loves to reveal in J&K.

After the home minister P Chidambaram’s remarks about possible banning of prepaid this month, industry insider say nobody was prepared for the “shock”. “Companies were actually gearing for a renewed CPV exercise. Nobody expected the ban,” said Shabir.

The decision did not spare the condemnation from the political class. PDP that stakes the credit for managing the prized entry into the state was totally angry. Terming the decision unfortunate, oppressive and ill advised, its president Ms Mehbooba Mufti said there was no reason to ban pre-paid mobile service in J&K especially at that time when situation has been changed. But she made a larger point: “On the one hand Government has been claiming that situation has improved in the State while on the other hand residents of this state have been denied of facilities like mobile services in the name of security threats.”

The trade is unhappy. Kashmir Chamber of Commerce and Industry president Nazir Ahmad Dar said: “You have the same formalities for post paid and pre paid connections. Then why this discrimination.” Calling the government stance ‘dichotomous’ Dar said, “When it comes to income tax regulations they implement normal rules, but for such things they cite security concerns. It is unfair”

The coalition government has not taken it easily either. A senior executive of the government told Kashmir Life that it is monitoring the impact of the central government ban on the genuine users. “We feel it is not a positive development. The genuine user is suffering because of the telecom companies not doing the job properly in verifying the antecedents of people while issuing SIM cards,” he said. “We will take up the matter with home ministry to work out an arrangement wherein the genuine user does not suffer as also the security is not compromised.”

The officer asks – why the users will be put to crippling inconvenience for the faults of operators? The operators are making money, rather a lot of money, and contribute nothing to the public kitty. They are running a dispute with the state government over levying the service charge and have managed evading all the taxes on one or the other count so far. Even their claims of providing jobs to state residents is being disputed given the fact that only a few of locals are on their payrolls. It is not an uncommon knowledge that they make most of the earnings in Kashmir but ensure they operate the networks from Jammu.

But the larger issue is why a service that has started changing the socio-economic profile of a society ravaged by turmoil is being withdrawn? The pretext is that cell phones help militants in carrying out subversive activities. Though mobile operations since it began in 2003 have come to aid the security agencies in a big way. The fact has often been admitted by officials.

Security agencies have killed and nabbed hundreds of militants, including top commanders by tracking their mobiles. In some cases easy access to mobiles was even facilitated by intelligence agencies to monitor their activities.  A common perception among Kashmir watchers is that mobile phones have in fact given security agencies a new weapon to fight militants. “It is easier to track a militant or a group of them if they use mobile phones,” a police officer wishing anonymity said.

The officer said that mobile phones have in fact played a “big role in breaking the backbone of militancy” in J&K.  Obviously there are a number of examples to support the point.

Early this year police arrested a Lashkar-e-Toiba militant Kamran. The arrested militant was having contacts of two LeT commanders Ashraf and Mudassar. Security agencies traced location of these two and found them in a populated area in Bhaderwah town. Police then made Kamran to call them and change their hide out. As soon as the duo reached near Dak Bungalow, they were killed in an ambush.

In May 2006 a senior member of a militant outfit called a newspaper office from his mobile phone a few minutes after a bomb blast. Within hours the troopers came knocking at his door and he was arrested. This was one of the first high profile militant being arrested on mobile tracking.

The success has been repeated again and again. This year alone in May and June, the security agencies have killed more than a dozen top commanders of Lashkar-e-Toiba, Hizbul Mujahidin and Jaish-e-Mohammad, purely with help of mobile phones. Almost every militant killed nowadays has some connection with mobile phone communication.

Apart from that mobiles have also been helpful in solving crime or related cases speedily. The murder cases of Maisuma youth Asrar Dar was solved with the help of a cellphone. Asrar’s murder stirred large protests in the Valley as the murder was initially blamed on security agencies.

Later, police, on the basis of mobile phone records, were able to nab the murders who happened to be his friends.  In 2006 tracking the mobile phone of a missing labourer Abdul Rahman Padroo made investigators stumble into the infamous fake encounter scandal wherein a group a police and CRPF and Army officials ran a nexus of staged encounters.

A superintendent of police and a deputy superintendent were later arrested among other people for the staged encounter of at least five civilians.

In January 2006, again on the basis of mobile phone records police claimed to have busted a network of militants that had infiltrated into the PDP ranks and planned to eliminate its top brass. According to police the sleeper cell had made certain attempts but had failed. Some of them had become quite reliable workers in the party when police broke the news of ‘embedded militants’.

In April 2006, recovery of a mobile phone from a militant almost exposed the entire network of the Hizb ul Mujahideen in Pir Panchal belt that connects Poonch with Shopian.

Once security agencies get hold of a mobile phone which has been in use of a militant they get access to entire gigabytes of conversations retrospectively.

In May 2006 a senior member of a militant outfit called a newspaper office from his mobile phone a few minutes after a bomb blast. Within hours the troopers came knocking at his door and he was arrested. This was one of the first high profile militant being arrested on mobile tracking.

On the other hand, for militants using mobile communication has proved very costly most of the times, but that has not deterred them from using it to their advantage, at times.

In a few cases, they have used the devices to detonate huge explosives. Use of mobile in detonation allows them more flexibility than a simple remote device, as in the case of a mobile they can choose the distance themselves without any technical restrictions. All they have to do is to dial the number of the phone planted along with the explosives.

In 2006 troopers had unearthed two IED using mobile phone as triggers, which lead to a blanket freezing of signals on August 15. The improvised explosive device (IED) blast aimed at an army convoy passing through Baramulla on December 27, 2006 had left three civilians injured. The explosion was done using mobile phone.

Home ministry has been crying hoarse over the massive use of Chinese manufactured mobile sets across India. It sees the cheap sets lacking the mandatory identity (IMEI) numbers as a major security threat. There have been four deadlines so far but it could not afford to stop services to the Chinese sets. But that is a different story.

Chaidambaram said in Srinagar the ban would be temporary. This essentially will force users to opt for post-paid. Everybody knows that post paid is expensive. The operators who have invested heavily in creating the infrastructure are not going to leave it and flee. “The companies will devise innovative packages to encourage the subscribers for becoming post paid users,” admitted one insider of a major operator. This, so many think, would actually help companies to earn more. So if J&K is spending Rs. 1200 crores a year now, it will jump up again, after a break!!!!


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