As a series of exposes, both recently as well as over the last couple of years show, former telecom minister Pramod Mahajan played a major role in allowing Reliance Infocomm a backdoor entry into the fast-growing mobile telecom market by permitting them to use a particular technology (Mobile Switching Centres or MSC) which allowed them to convert what was essentially a fixed-line licence into a full-blown mobile one with national roaming.
That this was illegal is obvious from the fact that, in January 2001 itself (26 months before Reliance launched its operations) M S Verma’s Telecom Regulatory Authority of India (Trai) made it clear that if fixed-line firms wanted to offer mobile services, these had to be only over a “limited” distance from the fixed line (like a longer-distance cordless phone), and the only way to ensure this was to use a technology called V5.2.
This was reiterated through a Telecom Tariff Order in May 2001, but when TRAI wrote to the then telecom secretary Shyamal Ghosh in September 2001 (a little while after Mahajan became telecom minister) saying the government needed to specifically forbid use of MSCs in the licence, Trai was told to go take a walk—under the Trai Act this is illegal (Rational Expectations, Feb 21, 2003).
And now, stories abound about how people known to him were allotted Infocomm shares at one rupee.
But exposing Mahajan is a bit like shooting at clay pigeons, it’s so easy since he was so open about what he was doing—how many individuals do you know who will cut short a meeting (in January 2003) of CEOs who’re explaining how Reliance’s operations are illegal by saying words to the effect “I know they’re doing this ... why don’t you also go and do what they’re doing if that’s profitable?”
What’s not being talked of is that others played an equally large role in helping Reliance get its backdoor entry, and these included names like current Trai chief Pradip Baijal, Mahajan’s successor Arun Shourie, and their decision was ratified by luminaries such as Jaswant Singh, George Fernandes, and Yashwant Sinha.
Indeed, the then Prime Minister Atal Bihari Vajpayee received the first phone call to inaugurate Reliance’s services on the late Dhirubhai’s birth anniversary.
But why even blame only the NDA, how many Congressmen or Leftists protested over what was happening? The only Congressman who raised his voice was Priya Ranjan Das Munshi and he too was told to shut up—I presume that’s what happened, or why else would he keep quiet after saying it was a Rs 13,000 crore scam? That was several years ago.
Even today, the fact that only a Sanjay Nirupam is willing to take up the issue of Reliance giving shares dirt-cheap to people known to Mahajan speaks volumes for how our politicians are covering up the Reliance episode—after all, given the intense rivalry between the BJP and the Congress, one would think the Congress wouldn’t miss up on such a juicy opportunity—but it has.
In early 2003, when Mahajan had finished playing nudge-and-wink with Reliance, and Shourie took over, the telecom tribunal, the TDSAT, was hearing the case against fixed-line telcos being allowed to provide “limited” mobility, and though Mahajan had inaugurated Reliance’s service, the formal launch was still months away.
Shourie heard out the cellular firms petitioning against Reliance’s licence violations and then his hand-picked regulator Pradip Baijal floated a consultation paper on merging/unifying both mobile and fixed-line services, thereby obviating the need for Reliance to limit the mobility.
In August 2003, the TDSAT came out with its judgement. While the head of the TDSAT, Justice Wadhwa, said the Reliance service was illegal and should be stopped, the two other TDSAT members ruled that while mobility was permissible, it had to be “limited”.
In other words, the government simply had to stop Reliance from offering full-blown roaming—exactly as other fixed-line players like the Tatas were doing. What did Shourie do? He simply didn’t implement the order.
Instead, in October, Baijal gave his recommendation on a unified licence, and the government accepted this after setting up a Group of Ministers (the GoM was headed by Jaswant Singh and with members like Shourie, Jaitley, Fernandes, and Sinha).
Reliance’s illegal service was legalised and it was asked to pay what the last cellular operator had paid. But how do you legalise Reliance having provided full-blown mobility right from the beginning? Simple, you effectively back-date Reliance’s unified licence to July 2001, pretend it forgot to pay the money then, and so charge it a penal interest for the period! It’s interesting but Baijal’s defence for his actions was words to the effect “Reliance was providing mobile services on a fixed-line licence anyway, at least I got them to pay Rs 1,400 crore—has Reliance ever been penalised to this extent?”
How do you blame Mahajan for this? Shourie’s supporters argue Mahajan had created an embarrassing situation for the party, and if he had cancelled the licence, Reliance would have gone into litigation, so Shourie (like Lord Shiva) took all the criticism upon himself but resolved things.
This is hogwash. Reliance would have gone to the Supreme Court, right? Well, the same Court had earlier ruled (in December 2002) Reliance’s licence would be subject to the TDSAT’s ruling—indeed, even Solicitor General Harish Salve had undertaken, in January 2001 itself, that this would be done.
So where’s the possibility of the Court entertaining Reliance’s petition? So all Shourie had to do was to implement the TDSAT order. All the GoM had to do was to insist Shourie implement the order.
Yet, barring the odd exception like Arun Jaitley, the GoM, and later the entire Cabinet, went along with this. Sure, unlike Mahajan, no one else has been caught with his hands hovering near the till, but behaving as though this was only his game is intellectually dishonest.