The Telegraph
Since 1st March, 1999
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- India may end up with a duopoly in telecommunications

It gives me a frisson whenever I see a book of mine for the first time. I open the packet, and there is a book ' with my name! The experience is fresh each time because the last time was so long ago. It was all the more exciting this time because the cover was mine. The publisher, Sage, made up some cover designs that were too literal ' tangled telephone wires and so on. So I thought I would take a shot at it. I went out with my Canon Powershot one winter morning, and shot every subject I could find related to the theme. I took pictures of telephone booths. One especially, which had boards all around with names of cell phone operators, shot across a bicycle saddle, looked great. But it too was too literal. Then there were festoons advertising lifetime connections for Rs 999. But the photos were insipid 'not enough contrast.

The morning foray was fruitful, but I was not satisfied. I went out again. Then I was caught. An MTNL transmission tower ' base station in telecom lingo ' had caught my fancy; but I felt I had to get a more graphic picture.

So I kept going and taking its pictures. One day, a telephone worker came out. He said that I had been seen photographing the tower again and again. It was government property, and if I was seen again, he would have me put behind bars. I asked him who had told him. He produced a midget standing behind him, and introduced him as a prominent local businessman. I started telling him about the book; but then I thought that if I told him what I had written about the government telecom operator ' about how its indispensable 315,000 employees made it allergic to competition from slimmer, quicker private operators ' he would shoot me. So I beat a retreat.

Finally, three pictures stood out. One was a blue-grey MTNL telephone box set in foliage, with a banner ' 'Stick no bills'. It was a nice photo, but rather subdued. Another was a leafless tree which had just started budding after the cold winter, and beyond it, the transmission tower. It was a lovely photo with strong lines ' a dark branch rising diagonally against a blue-and-silver early morning sky and cutting across the transmission tower beyond, framed by bunches of buds. The third was the same tower seen across a metal grille, competing with three of the grille's bars to race to the sky. The red-and-white tower stood out in this picture because the light was from the side. The tower was not more than a hundred feet away; but the angle created the illusion that it was miles away. My favourite was the second, but my Business World colleagues were not sure. I pinned up all the photos and took a poll; the last won by a narrow margin, and made the cover.

After The Price of Onions (Penguin), I had decided not to write any more books. But in 2003 I was struck by a financial thunderbolt. To restore my finances I signed a contract to write a book on telecommunications. I had not given it much thought. Bad books are easy to write; and for a prolific writer like me, pages are not difficult to fill. Problems arise when a bad conscience steps in. It is disastrous if, after one has written 100 pages, one begins to wonder whether what one has written is right, or good enough, or worth writing about. It happened when I wrote The Price of Onions. After I wrote 130 pages, a virus wiped out the entire manuscript. I was devastated. The very thought of the book depressed me; the thought of rewriting it made me suicidal. Then one day I thought, let me just write down what I remember. Actually, I remembered little. But since it was familiar ground, once I started writing, the fingers just flew; in three months I had finished the book.

This time I could not afford to give free rein to my conscience, for National Council of Applied Economic Research had given me two assistants; keeping them busy created so much work for me. I asked one, Archana Jaba, to construct a history of all business houses, their telephone companies and their foreign partners that ever figured on the Indian telecommunications scene, expecting that she would not come back for a year. She came back in three months; by then she had such a vast volume of information, and was so lost in the jungle, that it took more effort for me to sort things out than if I had given her a more reasonable assignment. I understand, though, that the experience was a turning point in her life. She went and joined Shubhashis Gangopadhyay, threw away her glasses, had a hairdo and fell in love (not with Shubhashis, compelling as the inference may be). Her career accelerated so much that I can no longer keep up with her. The other one, Ramneet, was more reasonable; she just went and married a colleague. And I am a more relaxed man now.

The masses of data Ramneet and Archana produced told a story: that 17 business houses were awarded 49 licences between 1994 and 1999. But they had bid up licence fees very high in the auctions. Since the department of telecommunications had most of the telephone subscribers, the private operators needed to interconnect with DoT's network. But DoT made interconnection so expensive that they all went bankrupt.

They went to TRAI, the newly created regulator. It saved them for a while, but DoT took TRAI to court and emasculated it. The businessmen who owned the private operators appealed to the politicians in power ' some say they bribed them ' and got a new regime which strengthened the regulator and replaced licence fees with revenue share. That made the private operators solvent again.

Then there was a tremendous consolidation drive; 7 promoters sold off 17 licences, two forfeited five licences for not paying dues, and 40 new licences were given. Five big private players emerged ' Bharti, Hutchison, Reliance, Escorts and Idea. In 1996 they had 18 of 42 cellular licences; in 2002 they had 45 of 55.

Then came the wonder team of Arun Shourie as minister and Pradip Baijal as TRAI chairman. They would have sorted out the system. But the NDA fell. Under the UPA, DoT has again emasculated the regulator, who is no longer regulating interconnection to ensure operators do not discriminate in favour of calls within their network and against calls from or to other operators. So the system is disintegrating into isolated islands. Obstacles to interconnection work in favour of big operators, and hence create a tendency towards monopoly. If DoT is not restrained, we will eventually be left with a duopoly. One operator will be BSNL. It can never fail, since it will always be bailed out by the government. The other one is anybody's guess.

So what can be done about it' Unfortunately, I have overrun my word limit; so the answer will have to continue to be confined to my book (India's Telecommunications Industry: History, Analysis, Diagnosis).

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