Telcos navigate seas of inequity

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Telecom minister A Raja's alleged links with a PR firm recently led the Tata Group, one of the most respected business houses of the country, to clarify that their relationship with the firm was to seek a 'level playing field' in areas where vested interests have caused distortions or aberrations in policy.Though Tatas are present in sectors as diverse as salt and software, a look at the country's thriving telecom sector where the group is present clearly illustrates that the fight for a level playing field by different stakeholders at different times, is more than a decade old and is still on.Points out telecom analyst Mahesh Uppal: "Accusations of favouritism and nepotism have been there all along. In the last 10 years, wireless technology has been our biggest ally in growth and it comes with spectrum, a limited resource. And we have handled spectrum in an unorthodox and an arbitrary manner."Uppal is right, as was illustrated in October 2007 when Raja came out with the controversial dual technology policy, which allowed predominantly CDMA operators like Reliance Communications and Tata Teleservices (TTSL) to get GSM spectrum. Broadly, both stood to benefit from it, but the manner of implementation made Tatas cry foul. The policy was finalised on October 18, 2007, Reliance Communications made the payment on the basis of its application for GSM spectrum filed in February 2006 (when no such policy existed) on the morning of October 19 and informed the stock exchanges about it, while the government announcement on dual technology policy came only in the afternoon.October 19 being a Friday, TTSL could only file its application for GSM spectrum only on October 22. Thus, Reliance Communications was ahead in the queue and got spectrum for all the circles, whereas TTSL is still to get the same for four circles, one of them being lucrative Delhi . The bitterness was palpable when TTSL managing director Anil Sardana later remarked that the date for according priority should have been after the policy was announced and not before it and had that been the case, TTSL was the first applicant.Tatas may have lost that race due to the lack of a level playing field, but earlier, they too had gained from such lopsidedness. In 2002-04, Tatas — along with the then undivided Reliance — had benefitted when it entered the CDMA mobile business with a fixed CDMA licence. Later, the government legitimised it through the universal access service licence (UASL). At that time, GSM operators led by Bharti Airtel had cried foul, saying it was against the principles of equity and a level playing field. In fact, Rajya Sabha member Rajeev Chandrasekhar — who was at that time managing director of BPL Mobile — blames his exit from the telecom business to this blatant favouritism, which snuffed out his business prospects.Acknowledging the lack of a level playing field which has always dogged the sector, Romal Shetty, telecom analyst with KPMG said: "It has always been there and it works both ways. These problems have cropped up because we never had a long-term road map as to what we wanted".

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