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Pradip Baijal: The storm raiser

Sunil Jain in New Delhi | July 26, 2003

TRAI chairman Pradip BaijalThe major difference between the time he held sway as the all-powerful divestment secretary and now as the country's telecom regulator, Pradip Baijal readily admits, is that his decisions are today subject to a completely different level of scrutiny "by lawyers and top-notch consultants."

"In divestment, the scrutiny was not so high." For instance, when the cellular industry felt that Baijal's predecessor, M S Verma, was giving them the short end of the stick, they held a press conference, where their lawyers briefed the media citing clauses in different acts or licences.

And now, ever since Baijal has put out a consultation paper proposing a unified licence for basic and cellular services, the cellular industry has been sending him a letter every day, explaining why the proposal is bad in law.

The cellular industry's belief, and they're not mincing words, is that the proposal is just a backdoor way of legitimising WLL mobile services of Reliance Infocomm and Tata Teleservices in case Telecom Disputes Settlement Appellate Tribunal chief D P Wadhwa rules that the services are illegal.

Baijal, however, maintains that the timing of his consultation paper and Wadhwa's impending judgement is purely coincidental.

"There has been lots of confusion and litigation on limited mobility. The TDSAT case is about whether WLL limited mobility is legal. We thought it was best to look at the licence format itself," he says, brushing aside allegations of trying to browbeat industry into accepting his point of view.

So far, however, Baijal appears to be coming off badly in comparison with the suave cellular operators, unlike in his previous stint where almost all opposition (often from kurta-clad politicos) was summarily dismissed with well-articulated reasoning and citing of international precedents.

Soon after Baijal took over as chief of the Telecom Regulatory Authority of India, he decided to keep in abeyance a proposal on the interconnect charges for a month, ostensibly to fix anomalies in the policy.

Fifteen days after the interconnect regime was implemented, with no major change made in the interim period, Baijal had to order a review.

Part of the review pertains to what is called the access deficit charge that is to be paid by users of various telecom services to state-owned Bharat Sanchar Nigam Ltd for providing below-cost phones to rural areas.

While Trai put the access deficit charge at Rs 13,000 crore (Rs 130 billion), various telecom players argued the calculation was faulty -- it took into account only BSNL's costs of providing phones but did not even look at the revenue earned from these phones.

The access deficit charge was actually zero, they said. Last month, Baijal admitted in an open house that the access deficit charge was significantly lower than Rs 13,000 crore. A final interconnect order is expected soon.

It will, of course, be naive to write off Baijal based on his initial stumbling. Though a newcomer to the field, he's already engaging outside consultants, often from abroad, to get insights into global best practices -- this is something none of his predecessors did.

Baijal's ability to abandon untenable positions, like his stand on the size of the access deficit charge, is another huge strength.

When negotiating with Suzuki, the government's stance was that global precedents should be used to fix the control premium for Maruti.

When Suzuki's lawyers said no control premium was paid in global auto deals, Baijal quickly dropped this line and instead threatened to reopen Suzuki's earlier deal with the Narasimha Rao government in which it got Maruti shares for a song.

After getting Rs 1,000 crore (Rs 10 billion) as control premium, he lobbied to get an excise duty cut on cars and the Securities and Exchange Board of India to change certain rules, all of which ensured Maruti's public issue was a runaway success.

Will he repeat his magic in telecom? Watch this space.

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