On a ring and a prayer

Written by Anandita Singh Mankotia | Updated: Dec 31 2011, 06:38am hrs
When the politico-economic history of contemporary India is written, the year 2011 would probably be defined by the word telecom. It was this sector that acted as a pivot around which other major political, economic and even social events revolved. So, if the roots of the anti-corruption movement are to be traced, one would reach the 2G spectrum allocation scandal that exploded in November 2010, leading to changes in the ministerial berth which controls policy-making in this sector. If corporate corruption is to be studied, one has to go back to the 2G scam because never before in the history of modern India have so many corporates been accused in any scam nor any high-profile corporate executive sent to jail. Also, if political crises is to be documented, 2G turned out to be a fountainhead, sending several political leaders to jail. Even in normal political life, several other leaders had to face allegations of corruption. In short, the ghost of the 2G scam would continue to haunt the government for years.

Even in the new year, the 2G scandal will refuse to die. In fact, 2012 promises to bring more surprises and controversies if the short history of the 2G spectrum scam is anything to go by. In February, former telecom minister A Raja and his aides Siddhartha Behura and RK Chandolia will complete a year in jail. These three are alleged to have masterminded the scam. The remaining 11 charge-sheeted earlier in the year managed to get bail towards the end of 2010, after spending some six months in jail. Considering that the accused include some very senior corporate executives of prominent companies, the impact it created in the stock markets was huge. Towards the end of the year, five executives of yet another corporate house were charge-sheeted.

If the 2G scam and the ills it brought created paradigm shifts in the countrys politico-economic-social environment, the effects of which would continue to be felt in 2012, other developments were no less significant. Telecom, which is often seen as a shining success of the countrys liberalisation process, even though it has had its share of controversies, lost some sheen not entirely related to the scam but by the way the sector has evolved in this country.

The year saw the low-cost, high-volume model of the countrys telecom revolution creaking as teledensity crossed 70% in urban areas and 100% in metros like Delhi and Mumbai. Top mobile operators saw bottom lines under stress with top lines not growing as before. The much-awaited 3G services made a start, but are yet to excite companies in terms of revenues or consumers in terms of services. As a result, the continuing mantra for companies was cost-cutting and exploring fresh sources of revenue. Neither provided for much scope but the search on both fronts will continue in 2012.

Hopes were raised when the new telecom minister Kapil Sibal said in early 2011 that he would come out with a telecom policy. It was expected that the policy would address the multiple woes afflicting the sector, which is largely heterogenous. Promises are easy to make but difficult to stand by. By the end of the year, what came out was only a draft idea with few concrete proposals, and the new date was shifted to mid-2012. In that sense, the new year may hold some surprises!

Normally, prosperity gets people friends who desert them in times of adversity. The story of the telecom sector was a bit different. The adverse situation prompted leading CEOs and promoters of mobile firms to come together, meet decision-makers including the Prime Minister, and follow it up by drafting a joint letter pursuing their demands. The main demand: That 2G spectrum be given out through auctions in future. However, we are yet to see what finally happens with this demand.

The government turned out to be a party-pooper for mobile operators when it said late in the year that the 3G intra-circle roaming deals they had struck among themselves were illegal. However, some respite followed, when the Telecom Disputes Settlement and Appellate Tribunal deferred the implementation of the decision till next year.

How then should the telecom sector welcome the new year while bidding adieu to 2011 The story remains the same: Complex. 2011 was complex for the sector and 2012 is not going to be any different. What then should the government-industry bank on as far as this sector is concerned Hope: This is what made them swim against the tide somehow in 2011 and this is what they should expect in 2012 too.