Bad luck & trouble for India Inc

The year went from bad to worse for corporates as the govt not only dragged its feet on policy matters, but also raked up 'settled' issues. The telecom sector is an example

India Inc could be forgiven for wishing that the year 2012 never happened. Policy hurdles, delayed clearances to projects and costly funds were the hallmarks of a year that came to symbolise the term 'policy paralysis'. The vocal and the visible among India Inc complained aloud, shot off letters and initiated signature campaigns. But just as one crisis seemed to have subsided, another sprang, and from the most unlikely of quarters.

One could understand delays in clearing new projects or slowdown in taking new policy initiatives, but when settled issues were re-opened with fresh interpretations, the blame squarely lay with the government as it seemed that there was no coherence in its thoughts and actions.

The story of this confusion on the government's part which damaged the industry could be best seen through the prism of the 3G intra-circle roaming saga, which, in general, involved the whole of the telecom industry, but, in particular, the country's top three mobile operators Bharti Airtel, Vodafone and Idea Cellular. Their plight and the way the government (read the department of telecommunications) went after them on the issue best describes why the industry could have done without the year 2012.

The telecom industry paid around R67,000 crore in 2010 when they participated in the auctions for 3G spectrum. It was easily the most successful auctions the government had carried out. Considering that it took place around the time the 2G spectrum scam of 2007-08 was unfolding, only showed that the industry still had hopes in a successful sector and was willing to take risks.

Since the bids were aggressive and going high, none of the operators could bag 3G spectrum for all the 22 circles. This meant that they needed to share spectrum with others in circles where they did not have it, so that the limit in terms of presence in circles did not reflect in terms of subscriber base. A concept of intra-circle roaming emerged. Operators entered into pacts with one another to provide 3G services to their subscribers in circles where they did not have 3G spectrum. This was known as intra-circle roaming, which is distinct from inter-circle roaming; the latter basically ensures that subscribers continue to get services as they move outside their home circles.

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