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Maran’s sudden, forced exit leaves telecom reforms hanging

Maran’s sudden, forced exit leaves telecom reforms hanging
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First Published: Tue, May 15 2007. 12 08 AM IST
Updated: Tue, May 15 2007. 12 08 AM IST
Chennai: With the exit of Dayanidhi Maran, minister of communications and information technology and one of the most high-profile members of the Union cabinet, a question mark hangs in front of a lot of reforms in the telecommunications sector, including the introduction of zero-cost roaming.
Besides planning to abolish roaming charges over the next three months, Maran’s team was slated to come out with proposals to introduce next-generation mobile services, more accessible broadband, subsidized wireless broadband in rural areas and incubation labs for developing telecom technology at the country’s premier academic institutions.
“He is leaving a lot of reforms in the middle,” said Alok Shende, head of the technology practice at consultant Frost & Sullivan. “It will be a challenge to keep the momentum up for the successor.”
Maran, who took charge of the ministry in May 2004, oversaw firms expand the base of mobile subscribers in the country from 54 million to 166 million in three years. His tenure, which also saw entry barriers such as licence fees, including those for overseas firms, come down significantly, also witnessed a steep fall in the domestic long-distance call rates from around Rs4.80 per minute to Re1 and falling.
During his tenure, India also attracted modern, wireless manufacturing operations. “I have been able to attract real and committed investments of $64.7 billion in the last 26 months of my tenure,” Maran said in a press conference held to announce the somewhat forced end of his tenure.
Many of those investments also found their way to Tamil Nadu, Maran’s home state, where he is a wealthy entrepreneur and his family has interests in newspapers, television and other booming sectors, such as aviation.
Maran stepped down as his party, the Dravida Munnettra Kazhagam (DMK), yanked its support for him and demanded he quit, part of the fallout of an ongoing political feud between Maran and his brother Kalanidhi Maran on one side and TN chief minister M. Karunanidhi on the other. The CM is also Maran’s grand uncle.
Some industry veterans say India’s current status as the fastest-growing telecom market, which adds six to seven million new cellphone subscribers a month, is to some degree a credit to the policies under Maran. “Two years ago, Maran foresaw, even before those in the industry, the possibility of the recent record growth in the subscribers, and laid in place the building blocks that made that growth possible,” said Asim Ghosh, managing director of India’s fourth-largest cellphone operator Hutchison Essar Ltd.
“To a large extent, he was lucky in being able to ride the wave of changing technology,” said Mahesh Uppal, a Delhi-based consultant to regulatory bodies, “but he did play a supporting role in bringing about the changes, especially by lowering entry barriers and promoting competition.”
While names like those of environment and forest minister T.R. Baalu and Karunanidhi’s daughter and Tamil writer Kanimozhi are doing the rounds as the possible replacement for Maran, none of whom have any particular expertise in technology, observers note that the existence of an autonomous regulator, the Telecom Regulatory Authority of India (Trai), could provide for somecontinuity.
“Kanimozhi is a not entirely unfamiliar to the world of politics and has been playing a part in the DMK politics,” said Chennai-based political analyst Krishna Ananth. “As for understanding the subtleties of technology, with institutions like the Trai, I don’t think that is going to be a big impediment to a newcomer,” he said.
Maran’s removal comes in the backdrop of violence in Madurai that led to the death of three employees of Dinakaran, a Tamil language daily run by Kalanidhi Maran. The violence was in response to a survey published in the paper that asked DMK cadres who would succeed Karunanidhi.
The survey, conducted along with ACNielsen, said more than 70% felt M.K. Stalin, Karunanidhi’s younger son would succeed, and only 2% felt the other sibling M.K. Azhagiri, would succeed his father. On Monday, Maran said he has nothing to do with Sun TV—which has a network of 20 channels with market leadership in TN—and Dinakaran. Shares of Sun TV Network lost 4.31%, or Rs69.15, to end at Rs1,534.50 on Monday.
Maran ruled out leaving DMK and said on his replacement in the telecom ministry: “I also hope my successor will implement the abolition of roaming charges on June 3 as we had planned.”
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First Published: Tue, May 15 2007. 12 08 AM IST