24-05-2025
The battle to put a phone in every Indian's hand
The idea that you could walk into a neighborhood store, buy a phone, insert a SIM card and start calling family and friends within hours would have been the stuff of science fiction in pre-1990s India. Which is why the telecom sector is considered the poster child of the transformative powers of the reforms of 1991, which threw open a moribund government monopoly to the private sector.
But a phone in every Indian's hand isn't a story of a smooth and steady transition. It is a tale of bitter business rivalries, some wise and some inept government handling, fierce maneuverings in courts, and a whole host of characters who played significant parts in the decades-long drama. It is also a story of the rise and fall of many entrepreneurs who cut their teeth in this most demanding of industries, culminating in a rank outsider, Sunil Mittal, emerging as the champion of champions. Above all, it's a tale which wasn't fully captured in any book so far.
Former journalist and author Deepali Gupta steps in to fill that breach with her new book, Telecom Wars, and does so with skill and substance. Sensibly, her book follows a straightforward chronological order, which allows even those who were eyewitnesses to the revolution to catch up on minor but critical elements. Take the incident where Analjit Singh of Max Telecom went for a meeting at the Department of Telecommunications (DoT) in 1993 to demonstrate his company's newly launched pager service. A chance remark by an official there convinced him that the future of communications lay in mobile telephony rather than in pagers. Singh would go on to be one of the big financial winners with the sale of his telecom business to Vodafone.
Another opportunistic winner was Warburg Pincus, which bought into Bharti Airtel against the advice of its consultants. Its $30 million cheque in 1999, which allowed Mittal to go on a shopping spree on his way to becoming an all-India service provider, would grow to over $300 million by 2001. The private equity firm eventually encashed its 19% stake for $1.8 billion in 2004. No story on Airtel is complete without mention of its first jingle composed by the music maestro A.R. Rahman. Gupta says the signature tune became so popular that it 'could even be heard in the reverse gear alert of the small family car Maruti 800."
Anecdotes aside, the book also provides detailed accounts of the battles within the battle, including the crucial choice of technology standards between rivals, Code-division Multiple Access (CDMA) and Global System for Mobile Communication (GSM), or the scramble between equipment vendors like Lucent, Motorola, Ericsson, Siemens and Nokia for a slice of what would grow to be the world's second largest telecom market.
In addition there are the backstories of some of the more mysterious characters in the decades-long drama; men like the tea-trader Mahendra Nahata whose company Himachal Futuristic would twice play a huge role in the evolving sector. The first came with his eye-popping ₹85,000 crore bid for the first set of telecom licenses in 1995 which had Parliament in a tizzy, leading to angry exchanges between the colorful telecom minister, Sukh Ram, who would eventually be arrested and jailed, and opposition members like Pramod Mahajan from the Bharatiya Janata Party and Nilotpal Basu from the left. Nahata, would surface again in 2010 when his company, Infotel Broadband Services, became the only one to win broadband spectrum in all 22 zones in India in the auction, only for the company to be immediately bought by Reliance Industries.
Gupta is in her element while detailing such oddities including that curious hybrid entity, incredibly named Batata, a three way partnership between Birla, Tata and AT&T. The marriage of two of India's largest conglomerates with the world leader in telecom services turned out to be an ill-fated one.
The flurry of action through the first two decades when multiple companies from India and abroad lay claim to a piece of the turf, gave way by 2016 to a battle between a powerful new entrant and a dozen incumbents. Jio's epic launch started a devastating race to the bottom. Only three of those who started, finished: Kumar Birla's Idea Cellular, Vodafone and Bharti Airtel.
Much of Gupta's material is sourced from media reports over the years including many which she filed. By piecing together these reports, editorials and columns, along with analysts notes and conversations into a single cohesive story, she's able to present an engaging and insightful book.
By no means is this a comprehensive account of the events surrounding the privatization of the sector, though. That would need an entire case study. To the author's credit she has avoided making it one, refusing to editorialise or offer her own interpretation or even hold out lessons for others.
The book is at its weakest in its conclusion, which reads more like a news report on the current situation. Perhaps publishing deadlines didn't allow for a more elaborate chapter than the short three-page apology to the present at the end.
Sundeep Khanna is a business columnist and author of business books.
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