By Vipin Agnihotri
In my opinion, the pursuit of power has irresistible appeal in the Indian telecom sector. For example, everyone is aware of how Kumaramangalam Birla and Ratan Tata made a mess of their ‘idea’ of partnership. Another stalemate is in the making between Ruias (holding 33 per cent in Hutchinson Essar) and Vodafone (with 52 per cent stake).
It is worth mentioning in this regard that the ostensible bone of contention in this case is BPL Mobile, in which the Ruias have a 9 per cent stake. If experts are to be believed, BPL has applied through its subsidiary Shipping Stop Dot Com, for a telecom license in 21 circles.
According to sources, this is a clear sign that the Vodafone-Essar relationship is on the rocks. Point to be noted here is that this rush for circles started when Telecom Regulatory Authority of India (TRAI), in its statement dated September 11, said that there will be no limit to the number of operators and it would enable more new players in even existing circles.
In my opinion, TRAI’s directive would increase competition and benefit customers. Plenty of new operators have applied for fresh licenses including real estate major Parsvanath Group. Every Tom, Dick and Harry is interested in entering the telecom operator business and TRAI’s directive makes it simpler.
Till now, Bharti Airtel is the only pan-Indian operator with a network of 23 circles, followed by BSNL in 20 and Vodafone Essar in 16. The bigger issue, though, is the relationship between Ruias and Vodafone. At the time of partnership, Shashi Ruia, Vice Chairman, Essar said, “It’s terrific that we are joining with the world’s leading international mobile company.”
But at this moment of time, it seems that the Ruias may just be looking for the right opportunity for an exit. Industry sources feel that the Ruias move to apply for licenses through BPL Mobile is disappointing. While Essar occupies less than 10 percent stakes in BPL Mobile, there is no doubt that Vodafone may see this as a clear clash of interests.
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