Serendipity and the new age entrepreneurs
Normally, monsoon time means rains and fog, but it seems like this season it is smoke and mirrors.
Here is Rajeev Chandrashekar’s latest article titled “Connection Errors“. He really takes DoT and TRAI to town while also saying the new age licensees simply found themselves in an “interesting situation”.
The protagonists in this tragicomedy — DoT and TRAI — have by now developed a perfect track record of ‘doublespeak’. Phrases like consumer benefit, common man and competition when emanating from them take on an ominous hue. It’s not the first time that the TRAI and DoT (seemingly acting in concert — when the opposite should be true) have used the common man and his benefit to roll out scams.
Source : HT
Tragicomedy ? Hardly a term that fits here. He says, “TRAI and DOT used the common man and his benefit to roll out scams”. So, we are to believe that the TRAI and DOT rolled out the scam and not the Congress led UPA government.
Essentially this whole thing boils down to the death of nuance in Indian public life. In report after report, the main talking points are along the lines of “but there was no note from TRAI asking us not to do that”. “The FM and PM did not raise any objection”, “There was no XYZ note asking the government not to do ABC, so we did ABC”. Is it fair to say that in the Congress led UPA government, the absence of a note devoid of any nuance will immediately lead to a massive compromise of a national asset. Its like a 10 year old claiming there was no label on the cookie jar with his name on it telling him not to enjoy its contents.
TRAI and DOT as institutions cannot be expected to issue a consultation paper for every possible avenue of corruption. Look, if the government wants to undersell – it will. If the government had the goodwill to extract fair price for the airwaves, which do not discriminate between Hindu, Muslim, OBC, Dalit, it would not require the DOT and the TRAI acting as schoolteachers exhorting it not to cheat.
What really takes the cake is his recap of the events leading up to the great black swan event in Indian history:
A set of companies gets spectrum and telecom licences at Rs 1,600 crore apiece. The market value for this spectrum is much more — Rs 4,000-9,000 crore — depending on the market transactions of Unitech, Swan, and Datacom and the reserve price for 3G licences).
The DoT requires a lock-in period before the licences can be sold and holds these companies to their network rollout obligations. But the TRAI has come out with a consultation paper to do away with the restriction on sale of licences to allow ‘consolidation and M&As’.
That leaves all the new licensees in an interesting situation — they have licences worth far more than what they paid for and there’s no need to roll out or invest further. They can sell their licences to make a lot of money for doing nothing. Where does that leave the government and people for whom these new licences represented affordability and competition? Basically nowhere. The government loses money from spectrum and the people see the market going back to the same structure as before.
Source : HT
This is a very ambitious maneuver even for an Indian capitalist. He wants to you believe that the new age licensees (most of whom did not even have a website) just happened to be “left in a interesting situation“. Well, how many believe that !! Did these new age licensees know before hand that they would be left in the aforementioned “interesting situation” ? If not, they would have to be crazies to pony up 1900 Cr with no telecom experience and a strict policy lock in period of 3 years.
Any idea of a windfall tax is silly because we are talking about a finite natural resource here. It is highly disappointing that Mr Rajeev Chandrashekar chose to attribute the minus to DOT and TRAI and the huge plus to pure serendipity.
On a related note : The CEO of Telenor was on TV a few days back. He was refreshingly candid. He acknowledged the whole allocation process was a bit strange, but he had worked with such countries (markets) before and was extending full co-operation to the CBI authorities investigating the case. (Sorry no URL, I saw the show)