Twists And Turns, Wired And Wireless
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You're In The Queue
Those were the days when people waited years to get a telephone connection. About 670,000 citizens paid deposits ranging from Rs 1,000 to Rs8,000 for a connection for which they had to wait for over a decade. At any given time, about 15 per cent of the lines installed were dead...
The PCO revolution
Sam Pitroda changed life for millions of Indians. The long lines outside the PCO (public call office) booths were a clear indicator of the change. Indians across the country could talk to anyone even without having their own phone connection.
A Lot Of Tangles
The government at last opened the market for cellphones. When the Department of Telecom-munications (DoT) beefed up its selection process and awarded fresh licences to service providers for metros, the list looked very different.
Mahendra Nahata-led HFCL won nine circles for basic services for a licence fee of Rs 85,000 crore. Since HFCL could not pay up, the process for opening the fixed line business to private participation was delayed for years.
Most telecom companies said the new document was a signal to rev up their engines. But all said and done, there could still be a few barriers to the privatisation of basic services. And telecom union leaders warned that "more people would go to court" to ensure that services were not privatised.
|(Cover Design: Jyoti Thapa Mani)|
Analjit Singh sold 41 per cent in Max Touch to Hong Kong's Hutchison Whampoa for Rs 561 crore — the first big deal in telecom. It helped Singh cash out of the industry in six years.
Share And Grow
The government came out with the new telecom policy (NTP '99) that allowed telecom service providers to move to a revenue-share scheme from the earlier licence-fee scheme. It triggered the first wave of telecom M&As.
You talked, and he made the money. What made Sunil Mittal different from the rest was the pile of cash he sat on. He could rustle up $750 million (over Rs 3,000 crore) in quick time. His Bharti Televentures issued 16 per cent fresh capital to Telecom Italia for $60 million. Warburg Pincus picked up another 20 per cent for some $90 million.
BSNL Goes Corporate
It had been on the drawing board for some time. Bharat Sanchar Nigam was de-linked from DoT and made a separate corporate entity.
|(Cover Design: Satyajit Datta)|
Two camps began to emerge. The twin bodies of the Cellular Operators Association of India and the Association of Basic Telecom Operators scrapped in the battle of limited mobility.
A Narrow Spectrum
The spectrum shortage started early on. Calls got connected via a scarce resource — spectrum —allotted by the Wireless Planning Commission. People could not connect at times and data transfers were tedious.
Wiring Up And How!
Companies were rolling out optic fibre cable networks. The who's who of the sector got their hands dirty in the ditches. In 16 months, some 15,000 route kilometres of ducts had already been laid by private operators.
Making Of A King
The telecom king had begun to emerge. Mittal inked a $90-million (Rs 423-crore) deal in cash with Dilip Modi for a 100 per cent stake in the Spice Cell venture in Kolkata. Later, when the second-round bids opened for the fourth cellular licence, he bagged Mumbai and five other circles Rs 392.61 crore.
Cut A Lng Stry Shrt
SMS became the cash cow for telecom firms, from being a mere add-on service. So, with 4 million subscribers, about 2.5 million messages were being sent every month.
The Tata buy
In a big sale as part of the disinvestment drive of the NDA government, Tata Group company Panatone Finvest bought a controlling stake in Videsh Sanchar Nigam for Rs 1,439 crore.
|Mittal stayed on, Analjit Singh cashed out and Rajeev Chandrasekhar exited (BW Pic By Dinesh Krishnan, Dileep Prakash, Hemant Mishra)|
For everyone to get broadband connectivity, the last mile had to be unbundled. Then others could use the existing copper to offer telephony, Web, TV, films, etc. If BSNL and MTNL's wires were thrown open, it would have taken about Rs 9,000 crore to offer mass connectivity.
The Battle For IDEA
The battle between the Tatas and the Birlas (holding equal stakes) over Idea Cellular ownership took a strange twist. The Tatas said the Birlas breached shareholders' agreement by disclosing Idea's financial details on the Aditya Birla Nuvo website.
The world's largest mobile telecom company, the $54.8-billion Vodafone, entered India in style acquiring 67 per cent in Hutchi-son Essar, India's fourth-largest mobile operator, for Rs 49,860 crore. This set off a new phase for Vodafone and its embattled CEO Arun Sarin. The company closed 2005-06 with losses of £21.9 billion.
Time For Africa
Airtel bid for Kuwait-based Zain Telecom's African assets for $10.7 billion. Mittal needed Africa as Airtel's presence there could propel him to the top five global league with a foothold in over 20 countries. Africa is a growing market, unlike a fast saturating India.
Rs 1.76 Lakh Crore
The Comptroller and Auditor General of India said the allocation of 2G had resulted in a revenue loss of Rs 1.76 lakh crore as the then communications minister, A. Raja, had ignored the advice of the Prime Minister besides those of ministries of law and finance. The prominent accused in the 2G scam including Raja, telecom secretary Siddharth Behura were jailed.
(This story was published in Businessworld Issue Dated 12-12-2011)