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Licence To Controversy

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The 2G licences controversy is becoming more heated by the day. At the time of writing this letter, the Parliament has been paralysed for 20 days. Former telecom minister A. Raja's residence and those of many telecom officials have been raided by the CBI. The new telecom minister, Kapil Sibal, has announced a probe into all telecom policies and licences since 2001. Prominent journalists and editors have warred in public.

Telecom pioneer and MP Rajeev Chandrasekhar has written an open letter to Ratan Tata saying Tata companies benefited from the 2G policies of Raja, and Tata in turn has come out with a strong rebuttal pointing out the policy flip flops during the BJP government and Chandrasekhar's own lobbying as COAI chief.

I have always held that the telecom sector represents both the best as well as the worst of India. There has been no telecom minister in the past decade who has not courted controversy because of changes in policy he initiated.

However, despite all the policy flip flops and controversies, mobile telephony has flourished. Charges in India are among the cheapest in the world, and even fairly low-income people sport cellphones. Telephone coverage, including in the most remote villages, has shot up as has the  subscriber base. And the sector has given rise to at least one home-grown giant — Bharti Enterprises — which is now expanding globally.

What we have achieved in telecom in no way condones the policy problems and the controversies. But it shows that despite the crony capitalism and the problems inherent in our government, we as a nation are powering ahead. That is something that one should not lose sight of. Meanwhile, our cover story this week focuses on what could be the template for a future revolution in the retail industry. Walmart India is focusing on building a supply chain management system that radically redefines the business. So far, our home-grown retail majors have largely focused on getting the front end right. It is time for them to take cues from Walmart and work on the back end as well. At the moment, Walmart is no threat to the big guns of the Indian retail industry. But if the sector opens up, their processes and systems could give them an edge unless their rivals start moving now.

(This story was published in Businessworld Issue Dated 20-12-2010)


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