Will You Allow ME to be A BIG Telecom?

Vasu Reddy from Chicago
vasureddy@aol.com

In India things are not the same anymore. Everything in India seems to be big these days. Indian is synonymous with enormous pride and growth. Every industry segment in India is zooming in growth and valuations. So, if the Indian market allows me, I will be a big telecom.

Here is what will allow me to be a BIG Telecom:

We have the second largest telecommunications subscriber base in the world. We have enormous opportunities in mobile, land line, rural and other forms of communications services. We may be the most attractive investment destination in the world for telecommunications markets. We have been slowly erasing the sins of over taxing and removing the taxation barriers for the operators for faster growth with investment and attractive pricing. We have the ability to allow more competition and become a natural capital market where both users of the services and providers of services can get the best of each other. We can continue to grow both subscribers and services at the same rate until we can’t invent any new services to help people communicate with each other and also satisfy the fads of communications.

The rule makers should have been just TRAI and DOT. For some reason the already big telecom communications companies in India seem to also have become rule makers, especially when it comes to arguing against any new competition in the mobile operations. Just in the last decade these folks were start-ups with capital from many a foreign companies and they used every resource they could to start their own businesses. They certainly lobbied hard for concessions and spectrum. They did work hard to go start-up to mega company status in no time, and all their success which is well deserved is based on their ability to manage their businesses well and attract subscribers with affordable and value based offerings.

While the DOT and TRAI don’t seem to see eye to eye with each other on the allocation of spectrum and pricing the spectrum, the already established players arguing for no new competition is a farce. Indian market should never allow such highhandedness especially by companies that became big in less then a decade of operations.

One of the biggest arguments with 3 G licensing through open auctions and open bidding for anyone with ability to bid and comply with law is that they will have less advantage over the incumbents in investments. That is the biggest nonsense if there was an argument. Once again the incumbents must be reminded that they were new ten years ago, and the success of the Indian Mobile market show that there is no need for any sympathy to new players. There is plenty of venture and private capital available along with vendor and other company financing to fund what it takes to build networks at the same speed as the incumbents. Why would any competitor cry about another’s returns and where does any rules making body have experience in money and investment management?

Allow me to participate in the growth of India. Don’t let me be stifled by the so called invested parties as their market valuations reflect their worth, and don’t just allow them to continue to become so big that they can dictate terms to users and the rule makers. Let rule makers make the rules and not worry about the ability of new companies to build networks as quickly as the already working ones. They probably will build faster and have better services then the incumbents, and perhaps force incumbents into better coverage and services, along with better pricing.

Let the government of India benefit from open auctions. If allowed through transparent and fair bidding or e-auctions there will be a huge value on the spectrum, and will benefit the government. The new players will be better prepared and better planned to handle their rollout as prescribed by the rules of the license.

If the DOT, TRAI and incumbents allow me to participate there is no reason for me to fail in the telecommunications growth in India. They just must allow me and it is very likely along with me there will be several new giant telecommunications companies that will be created along with already existing ones. Let us have rule makers make rules and not start worrying about ROI. Let us grow while allowing everyone to take their own risks and benefits, and not stifle competition. Me here is the entire world who already have no piece of the action in Indian Telecom, and if India allows me I will also take the risks and become a BIG TELECOM.


May 5th 2008
Vasu Reddy