Telecom Industry
Where is the need for Airtel to do the MTN deal?
Where is the need for Airtel to do the MTN deal? Where is the need to become global? The objective of any company is to make money for its shareholders and not become global or big. Big does not necessarily mean better or more profitable as most people tend to think.
Nobody listens to TRAI
Telecom regulator TRAI has AGAIN directed the telcos to take explicit consent from customers before billing them with value-added services. This directive is the result of increased consumer complaints because telcos keep billing its subscribers for services not requested by them and also without their consent.
Why is DoT restricting competition?
Yesterday’s Economic Times reported that Department of Telecom (DoT) has decided not to grant anymore new telecom licenses against the 343 pending applications that it has received. Reason given is absolutely unreasonable and bordering on stupidity. DoT has stated that they want to prevent unhealthy competition in an already crowded market. Lets look at whats wrong with this thinking.
No more jackpots for telecom players
A number of people including I were outraged when telecom players like Unitech were given spectrum for peanuts which they sold to make billions. All of us wanted that the profits made by Unitech belonged to us, the public and that the money should be returned to the government. The other demand we had that was that the telecom minister Mr. Raja should have resigned and that the matter should be investigated to find out how Mr. Raja ended up doing such a stupid thing.
Call drops are not acceptable
In my book titled Customer Icebergs, I have discussed the subject of call drops and have stated that mobile companies actually benefit with call drops which is what Hindustan Times reported today. Mobile companies have no incentive to reduce call drops because of the following reasons:
The telecom scam solution
I am happy to see that a lot of people are raising their voice against the telecom scam. BJP has demanded a CBI inquiry. A PIL has also been filed by Arvind Gupta in the Delhi High Court which has asked the government to respond to the PIL in three weeks. AITUC general secretary has written to Prime Minister Manmohan Singh for the removal of the telecom misnister Raja, DoT secretary and TRAI chairman. According to him, the licences should be cancelled as they have been issued on trial basis (I was not aware of this) and reauction the 2G spectrum. He further adds that the government can change the policy under special circumstances (corrupt practices) and even the courts have ruled positively in this respect. In the case of Unitech, the government can also reject the proposed sale because of security reasons.
Telecom scandal-Why are the industry associations keeping quite?
I have been surprised to note that till now none of the industry associations like FICCI, CII, ASSOCHAM and others have not commented on the telecom scandal. Even COAI, the telecom industry association has kept quite.
Real estate biggies and telecom scandal
It has been bothering me for quite a while that quite a few recipients of the telecom licences are real estate walas. I am not sure how many but at least the two who have sold the stakes in their telecom companies are real estate companies – Swan and Unitech. If anyone knows how many licences are real estate companies, kindly let me know. Oncce we have the numbers, then the scam will become more clear.
Unitech-Pray tell us what value you have created
Unitech has finally broken its silence and has stated the following on its jackpot win:
Do politicians think that we are all fools? I think so.
Yesterday, I read in the papers that all the M’s, That is, the PM, FM and TM put their minds together to resolve the loss of Rs. 40-50,000 crores loss to the exchequer and came up with another idea to hoodwink the public. They are proposing to have a 3 year lock-in period for the sale of a promoter’s stake. Will this help or resolve any problem. The answer is NO. The reason is simple. The value of Unitech will remain whatever it is whether the funds are brought in as equity or as stake sale. The fact remains that Unitech with an investment of Rs. 1632 crores will become owner of company worth Rs. 11,000 crores in 10 months for the spectrum it holds which was sold to it by the government for peanuts. Some may argue that at least the promoters so not make any immediate cash gain. This is not true. Promoters can always raise the money against their stake in the company to use in the telecom venture or any other venture.
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