Andimuthu Raja | The king of networking4 min read . Updated: 11 May 2009, 09:00 PM IST
Andimuthu Raja | The king of networking
Andimuthu Raja | The king of networking
New Delhi: Andimuthu Raja was a low-profile minister of environment in the United Progressive Alliance (UPA) government at the Centre when a bitter family feud catapulted him to the powerful telecommunications portfolio two years ago.
In the months to come, Raja, known as a hands-on minister with good networking abilities, took decisions that caught the attention of top global telecom executives, eyeing a share of the world’s fastest growing mobile-phone market. The policies also set off a storm of controversy.
“I have done everything as per law and as per the recommendations of Trai (Telecom Regulatory Authority of India)," Raja said in a phone interview on Monday, two days before his constituency, Nilgiris in Tamil Nadu, goes to the polls in the last phase of the general election.
“I am also a lawyer and the processes followed are as per law," he said.
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In his campaign, Raja is trumpeting his record as the telecom minister, taking credit for reducing call rates to as low as 50 paise, the rapid growth of India’s mobile-phone market and state-run Bharat Sanchar Nigam Ltd’s roll-out of so-called third-generation, or 3G, services.
Also as telecom minister, without changing any rules, Raja granted phone service licences to five new operators including Datacom Solutions Pvt. Ltd, Swan Telecom Pvt. Ltd and Unitech Wireless Ltd, that had no background in telecom. Existing operators such as Idea Cellular Ltd, Aircel Ltd, Spice Communications Ltd and Vodafone Essar Ltd, a unit of Vodafone Group Plc, were given licences to operate in new telecom areas.
The licences, which came with spectrum rights, were handed out on a first-come-first-served basis early in 2008, conforming to existing rules.
What rankled industry insiders was that around the same time the government decided to auction spectrum for so-called third generation, or 3G, phone services. The value of spectrum to the new phone firms was much more than the Rs1,651 crore that a licence cost, they said. It didn’t help Raja’s case that minister of state for communications Jyotiraditya Scindia made public that the government expected to raise as much as Rs40,000 crore from the 3G bidding. That Unitech and Swan managed to sell a 60% and 45% stake, respectively, raising a combined $2 billion (Rs9,840 crore) proved the point, critics said.
Since neither company had a network, subscribers or knowledge of the telecom business, it was inferred the price paid was for the spectrum.
“Mr Raja has been most impervious to criticism that his approach to spectrum allocation was not only irrational but unfair. It hurt and disappointed many of the serious players," said Mahesh Uppal, a director at Com First (India) Pvt. Ltd, a consultancy that focuses on policy and regulation.
AIADMK leader V. Maitreyan said by allocating spectrum on a first-come-first-served basis rather than through a global auction, the country had suffered a loss of nearly Rs1 trillion. The Bharatiya Janata Party and the Left also protested.
Raja also allowed Reliance Communications Ltd and Tata Teleservices Ltd to offer so-called dual technology phone services. This meant they could launch services using GSM (global system for mobile communications) networks in addition to their existing CDMA (code division multiple access) services. GSM services are more popular in India and count three among four of the country’s phone customers. The decision led to a spate of protests ending before a telecom disputes panel.
Perhaps his training as a lawyer helped Raja cover his flanks. He pointed to precedents set by the National Democratic Alliance (NDA)’s Arun Shourie besides his immediate predecessor Maran. The first-come-first-served licence rule, he said, had been referred by Maran to Trai, which endorsed the decision. He noted that Shourie and Maran, too, had not taken the auction route. Karunanidhi also came to his rescue, saying Raja was being targeted because he was a Dalit.
Raja is running for a fourth term to the Lok Sabha. He shifted to the reserved Nilgiris constituency in Tamil Nadu after Perambalur got dereserved following the delimitation exercise that redrew the boundaries of constituencies across India.
The DMK politician, who lists reading and writing poetry in Tamil among his hobbies in his profile posted on the Lok Sabha website, is the eighth and youngest among four sons and four daughters. He studied law in his hometown Perambalur, became a DMK activist, and went on to become a member of Parliament from the same constituency in 1996. He lost in 1998 in the anti-DMK wave and got elected in 1999 to become a minister of state in the NDA government led by Atal Bihari Vajpayee. In 2004, he got re-elected to become a cabinet minister in the UPA regime. What about his chances of winning this time? “I have very bright prospects," says Raja.
Shauvik Ghosh and Santosh K. Joy contributed to this story.
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