India needs to rebuild its telecom narrative

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Rohit Bansal and Manoj Kumar | 06 Feb, 2012
Telecom sits on the top of the incredible India story. But the mess, evident in the award of second generation (2G) licences, shows how at least six principal characters worked overtime to deface it. To borrow from the cricketing cliche, and but for the Supreme Court (SC), this team of public functionaries snatched defeat from the jaws of global telecom sweepstakes.

They are guilty of blinding by the glint of nickels and a varying spectrum of complicity. The team includes:

- A. Raja, the former communications minister enjoined with public responsibility to allot the spectrum without making it a conduit for his party and person.

- The Department of Telecom (DoT), which isn't supposed to be a backroom den for crony capitalism, but reduced itself to dhobi marking a rapacious minister's decisions.

- The Telecom Regulatory Authority of India (TRAI) which has made amnesia a habit, forgetting that it has the mandate to confront the DoT and behave less and less like an organ of the executive.

- The Prime Minister's Office and the finance ministry who had a Kiplingesque duty to keep their head when all about them are losing theirs.

- The raft of applicants, licensees, traders (those who replaced the original licensees), lawyers, and lenders.

- One could include here another actor, the Competition Commission of India, which in its wisdom neither intervened nor was asked to.

It is sad therefore that these honourable men and institutions had to be castigated like children by the apex court, the reluctant mahout of our story. It is sadder still that there seemed no alternative to all the 122 licences being cancelled, leaving open the primary question of mixing the wheat with the chaff, and consequent injustice to those who invested their money (and their bankers!) into India.

Let us also not forget the sad fate of consumers who subscribed to these new licensees in the hope of better service and lower rates and are now being seduced by irritating advertisements from incumbent players promising portability, the dubious nirvana.

This avoidable situation has led to predictable split. The cheer leaders for good governance are rejoicing, as they should. But more nuanced commentaries are right in pointing to the publicity nightmare that confronts India regarding predictability of our investment environment. Can the Indian sovereign be trusted?

The "mahout" has done his bit, which is to put a stop to a patent wrong-doing and then leaving it to the sectoral sherpa to draw a fresh auction within four months. This is a laudable deadline. The world will expect India to clean up years of mess within that timeframe.

The telecom regulator is already busy dropping hints it will need more time. Surely, it needs to build things from scratch. This includes rebuilding its own organization! But rather than whine, the regulator must see this as a god-sent opportunity to redeem itself.

This comment points them to draw inspiration from an unlikely candidate, the Federal Bureau of Investigation (FBI), and its chief rebuilder Robert Mueller. He had taken over as then president George W. Bush's man for FBI just seven days before Sept 11, 2001. On 9/11, his agency found itself staring at perhaps the biggest conceivable systemic failure in US history.

But Mueller re-built, indeed redefined his agency, brick by brick. He redefined the FBI from a guns (remember J. Edgar Hoover!) to geeks organization, where the enemy could be in a Somalia or Tora Bora. One of us sat over several hours in Mueller's Harvard class, and the celebrated business case that has documented the rebuilding of FBI. Surely, the TRAI, the DoT, the finance ministry and the PMO don't face a bigger disaster than FBI and the Americans did.

India Inc., including the financial institutions and our legal eagles, has an equal responsibility in co-creating a public consultation on the telecom charter. Rather than sit on the sidelines and then lobby for their interests, all the blind men open the third eye within. The world expects no less. At stake is whether India can rebuild its telecom narrative.

Moot points include:

- For the telecom companies in question, is a mere Rs.5-crore fine sufficient, instead of blacklisting or barring them from participating in new auction?

- How fast can India tell the world what it did to officials who are guilty, including those who are hiding behind the cover of not having been consulted?

- How can we demonstrate respect for guarantees of the constitution in general and the principles of natural justice and promissory estoppel in particular?

In the face of a clear impropriety of a few, should they be let off so lightly and other bona fide stakeholders allowed to suffer?

(The commentators are associates with a leading legal and business advisory. They can be reached at rohitbansal@post.harvard.edu and manoj.kumar@hammurabisolomon.com)