Cell Phone Nation: How Mobile Phones Have Revolutionized Business, Politics and Ordinary Life in India (10 page)

As well as basic landline telephones, the new policy listed six services that private companies had in theory been allowed to provide since 1992. The last of these—it sits in the policy document almost as an afterthought—proved to be the addictive one: ‘cellular mobile telephone’ service. To provide such a service, government had to allot scarce Radio Frequency spectrum to private companies, and this was to be done ‘through a system of tendering’.
⁸²

US governments had faced a similar problem: how, and to whom, was this invisible, immensely valuable and seemingly magical commodity, Radio Frequency spectrum, to be allotted? In the US the Federal Communications Commission (FCC) auctioned the right to radio frequency in hundreds of small geographical parcels in the 1980s. The result at one point was 92,000 bids for 180 geographical areas. The FCC threw up its hands and awarded rights by lottery: lucky winners, often small-time players, sold their rights at a profit to bigger organisations.
⁸³
Indian governments in 1994 similarly proposed to call for bids, and a great corporate game began, punctuated by intense bureaucratic politics and allegations of corruption. Senior bureaucrats, crafty politicians and capitalists large and small wrestled to control this invisible asset.

The Mughal emperor kept
tabs on his subjects through a system of employees and reporting. Every town in seventeenth-century India had a
kotwal
, a variation of a magistrate or police chief. The
kotwal
employed the town’s scavengers who cleaned household latrines. These people, wrote the Italian traveller Niccolao Manucci, ‘go twice a day to clean out every house, and they tell the
kotwal
all that goes on. On his part, the
kotwal
must render an account to the king of what he has heard has happened, whether it be by night or by day’.
⁸⁴
Information was gathered piece by piece—‘sweeper’s wisdom’, a modern magazine editor called it.
⁸⁵
Each scavenger knew the comings and goings for the houses that he or she covered; but only the
kotwal
sat at the centre of the town’s web of information. And the emperor’s officials sat at the centre of the imperial web stretching from today’s Afghanistan to Bangladesh in the east and as far south as the River Kaveri.

What would have happened if every scavenger had been able to communicate with every other scavenger? The capacity of ‘lower orders’ to know about the doings of their superiors would have been greatly enhanced. Freer movement of people and information contributes to egalitarian ideas and practices. All-weather roads did this in Europe and elsewhere from the eighteenth century. The cheap mobile phone, capable of being owned by hundreds of millions of individuals, was an even greater disrupter than the King’s all-weather highway.

No tool is neutral. Its purpose and politics come from the people who use it. All-weather roads could be used to help young Scots go to London and seek their fortunes, as Samuel Johnson said. But all-weather roads could also bring taxation, conscription and the armies of ‘Butcher’ Cumberland to peasants’ doors.
⁸⁶
Similarly, the benefits of mobile telephony vary with wealth and power. The processes that the NTP-94 set in train launched India’s greatest capitalists and most powerful politicians and civil servants into competition to control Radio Frequency spectrum for the immense wealth it could bring.

2

CELLING INDIA

Make a phone call cheaper than a postcard and you will usher in a revolutionary transformation in the lives of millions of Indians.

Dhirubhai Ambani, in Keskar, ‘Reliance Infocomm’

A huge Indian flag flutters
over the memorial where Rajiv Gandhi was murdered by a suicide bomber. The village of Sriperumbudur is about 30 kilometres west of Chennai, and Rajiv Gandhi’s electioneering cavalcade reached the place about nine o’clock on the evening of 21 May 1991. He had been riding in his white Ambassador car—a symbol of out-dated self-sufficiency in postindependence India—with Barbara Crossette, the correspondent of the
New York Times
. Moments after he left the car there was ‘a large boom’ and he was blown to pieces. Crossette was hustled away in the same car, back towards Chennai. ‘All along the route it was clear that no one had heard of the assassination. It took the news agencies nearly an hour to begin telling the people of India that Gandhi was dead’.
¹
In New Delhi another reporter was celebrating a birthday with other journalists when a message came about 11pm that the former Prime Minister had been assassinated. ‘I went upstairs’, he wrote, ‘and took one look at the Press Trust of India and United News of India teleprinters and they
were carrying one-sentence flashes … All India Radio didn’t carry the story, I don’t think, until midnight’.
²

In 2010, the largest cell-phone factory
in India and one of the largest in the world stood two kilometres from the Rajiv Gandhi memorial. The Nokia factory at Sriperumbudur was located in an 85-hectare Special Economic Zone, where 12,000 workers produced thousands of phones a day. The Ambassador cars, teleprinters and peaceful obliviousness that Crossette saw in the countryside around Sriperumbudur in 1991 had been replaced by a Hyundai car factory, Korean restaurants, pervasive mobile phones and steady streams of buses ferrying workers back and forth to the Special Economic Zone where various industries, as well as Nokia and Hyundai, had been set up.

When Rajiv Gandhi died, there were six phones in India for every 1,000 people, and Crossette had to wait till she got to a hotel phone in Chennai to tell her newspaper what had happened. Late at night on the road from Sriperumbudur in 1991, it made no sense to look for a working phone. A car-based mobile phone had been introduced in New Delhi in 1986, but by June 1988, ‘the number of subscribers working in Delhi are 76 and there [was] a waiting of 252’.
³

If the coming of the mobile phone to India were told as a fairy tale, it would begin with a description of a Wicked Witch holding her subjects in bondage by preventing them from talking to each other. Indeed, such a picture is not too different from the one Ashok Desai presents in his path-breaking book
India’s Telecommunications Industry
. When Rajiv Gandhi died and India’s economic reforms began in earnest, the telecommunications industry was ‘a placid backwater’ where ‘the service was poor’ and a telephone connection had as one of its chief virtues a ‘black-market value’. A phone was a luxury that very few people had, and, if they did, a phone’s use for actually making calls was limited and uncertain.
⁴
In the years that followed, the Wicked Witch, in the guise of the telecom bureaucracy of the Government of India, used all her wiles to retain control of the invisible charm called Radio Frequency spectrum, which was acquiring great value. In the end, the Witch had to surrender some of her powers and the people of India found themselves able to communicate as never before.

This caricature captures aspects of the struggles over the use and allocation of Radio Frequency after 1991. That drama had four acts. It began in 1991 with attempts to deregulate the Indian economy and allow private industry to provide telecommunications alongside the government provider. This episode culminated in the tortured labour and birth of the Telecom Regulatory Authority of India (TRAI) (intended to be the referee for the new competitive telecom industry) in 1997. The second period could be called ‘The Travails of TRAI’ as the new-born regulator struggled haplessly with the telecommunications bureaucracy of the Government of India. The bureaucracy—multi-layered and maddeningly patient—acted with remarkable coherence to hobble the regulator. This standoff led the Prime Minister, Atal Bihari Vajpayee, to take the telecommunications portfolio into his own office in 1999 and abandon many of the failed rules and policies of the previous five years. A New Telecom Policy was announced in 1999 and over the next two years most controls on private companies providing telecom services were removed.

Until 2002, expansion of the
telephone network across the country had been modest. There were only 45 million phone connections for 1,000 million people. By 2012 telephone connections reached 900 million.
⁵
The robber barony and institutional skulduggery that went with this expansion form the third part of the story. Act IV, in which ministers were jailed and the courts abrogated agreements that had attracted huge investments, played out well into the twenty-first century.

Act I: ‘… Within a fortnight …’

The above assurance—‘within a fortnight’—given to would-be telephone subscribers in the early 1990s carried a melancholy promise of long waits and musty files. The same document spelled out how such marvels would occur:

applications for new connections received along with necessary deposits will be registered in the office and entered in a register on the very date of receipt and entries attested by the officer authorised for the purpose.

… A serial number will be allotted against each application. Serial numbers in the Waiting List should be given in the order of the date of payment. … The registration number shall be intimated to the applicant within a fortnight in the pro forma attached to the application form.
⁶

Even the promise that applications would be registered ‘on the very date of receipt’ was little comfort when the waiting list ran to 2.5 million.
Swamy’s Treatise on Telephone Rules
, the 850-page guide to the procedural mysteries of the government telephone monopoly, was a profitable publishing venture as late as 1993 (See
Illus. 4
).

Why had the telephone spread
so little in the forty years after independence? There were physical reasons. The country was vast and rural. To connect 600,000 villages by copper-wire phone lines would have been a huge and expensive task. Copper was valuable. A meter of cable contained more than three kilograms of copper, and copper in the 1970s was worth about US $4.00 (Rs 30) a kilogram. A metre of copper phone cable in those days could add up to more than Rs 100: a week’s wages for a school teacher or lower-ranking government servant.
⁷
Not surprisingly, rural phone wires sometimes disappeared.

In 1990–1, the First Gulf War’s jolt to the economy increased oil prices which drained foreign exchange and cut off remittances from workers in the countries of West Asia. The war threw tens of thousands of Indians out of work in the Gulf, many returned to India, and the foreign exchange they had been sending home dried up. India was running out of dollars to pay its energy bills.

Telecommunications in India, and particularly telephones, were ripe for change. The exasperation of a growing middle class coincided with global economic and administrative pressures to reduce government controls on the economy. Such pressures, combined with the opportunities offered by new technologies, put telecommunications near the top of the reform list of the Congress-led government that came to power in June 1991. The Public Call Offices had allowed large numbers of Indians to experience the convenience of a functioning telephone for the first time. Such experience increased the frustration at the difficulty in obtaining a household or office phone and at the unreliability of a phone once it was installed.
⁸

A strike by government telecom employees in December 1990 emphasised the need for change, even to sceptics. The corporatised government entity that provided telephone services to New Delhi and Mumbai (Mahanagar Telecom Nigam Ltd or MTNL) proposed to pay its 70,000 employees a bonus for good performance. MTNL had been hived off from the Department of Communications in 1986 as one of Rajiv Gandhi’s attempts to develop more efficient telecom services. The proposed bonus was intended to reward workers in the new entity for steady work in meeting targets. But the 370,000 employees of the
other
government telecom agencies went on strike for a similar payment, though no one except they themselves was suggesting they had worked notably hard or well in the previous twelve months. In the end, no one got a bonus, but the caretaker government, which ran the country prior to the 1991 elections, set up a Telecom Restructuring Committee under M. B. Athreya, a Harvard-trained management specialist.
⁹
Thus when the new government under P. V. Narasimha Rao and with Manmohan Singh as Finance Minister came to power in June 1991, it had the report of a review committee waiting for it. The Athreya Report floated easily on the tide carrying the government towards economic deregulation.

The recommendations of the
Athreya Committee were never going to be popular with telecom bureaucrats or 400,000 government employees of the monopoly telecom services. It recommended the creation of a new entity to provide services, in the way that MTNL was already doing for the metropolises of Delhi and Mumbai. Such a new corporation would be government-owned but independent of the Ministry of Communications.
¹⁰
It recommended allowing private enterprise to provide a limited range of telecom services, including what was then thought to be a luxurious frippery for India, mobile phones. To oversee these changes and act as a referee, the committee called for the establishment of an independent Telecom Regulatory Authority.
¹¹
All three recommendations were eventually implemented; but it took ten years and a tortured series of contests in which a government department—the Ministry of Communications—often appeared to be resisting the policies of the government it was supposed to serve.