In an industry where policy changes—many inexplicable—have come about as a result of lobbying, the lobby itself is in danger of breaking up. On Monday, the Tata group’s Tata Teleservices exited the Cellular Operators Association of India, or COAI, a body that represents and lobbies on behalf of telcos providing mobile telephony services on the GSM technology platform which is dominant in India.
Analysts are of the opinion that one possible fallout could be the creation of an alternative lobbying body—one that represents the interests of companies such as Tata Teleservices, or even others who are part of COAI, but have reason to feel that the body doesn’t always speak for them.
This is because there are at least three interest groups in COAI (this newspaper says at least because it isn’t sure that more do not exist). And each of the three corresponds to a policy regime of a certain vintage. The oldest and strongest group is that of telcos which started life as GSM players and have, over time and with a judicious focus on M&As, grown into national players. The policy regime that corresponds to them dates back to the late 1990s (which is also the last time they got the government to effect a favourable change in this regime). Bharti Airtel and Vodafone Essar belong to this group. The second group is that of telcos which started life offering services on the CDMA telecom platform, but later got the government to let them operate on the GSM platform as well. Both their entry into the wireless space (in the early 2000s), and their move to GSM (in the mid-2000s) was strongly opposed by the first group. Reliance Communications and Tata Teleservices belong to this group.
Illustration: Jayachandran / Mint
The third group is that of the telcos allowed to enter the mobile telephony space (on the GSM platform) in early 2008. These are new telcos and they have their own issues—with the policy regime as well as the older telcos. Telcos such as Uninor and MTS belong to this group.
This falling out, which has only begun, is only to be expected. It is an adventitious offshoot of India’s frequent changes in direction in telecom policy—changes that have benefited the customer, yet, if some quarters are to be believed, short-changed the exchequer.
Still, this newspaper can’t help but wonder: If one lobby with multiple interest groups could effect as many changes in India’s telecom policy as it has done, what will multiple lobbies do?
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