Winners And Losers

The Internet policy has the potential of a smash hit in the coming years. And, finally, his efforts to corporatise DoT are bearing fruit with all but one unions giving their assent. The three members of the Telecom Regulatory Authority of India (TRAI) chairperson S S Sodhi, his deputy B K Zutshi and secretary N Ramachandran are a close second to Gokak. The three made it clear the whole of this year that they meant business: starting from the order striking down DoTs fixed-to-mobile tariffs to formulating tariffs for Internet service providers.

The telecom business had precious few winners among operators in 1997. Basic telecom operators signed the licence and interconnect agreements, but are already developing cold feet over cash flows of their projects. Cellular operators are crying themselves hoarse demanding an extension of the licence period from 10 to 15 years, a two-year deferment of licence fee payments and a hike in rental tariffs. Sector experts predict a massive shake-out in 1998.

Among investors, American International Group (AIG) was easily the most active. It continued stricking some surprisingly cheap deals in 1997. AIGs list of Indian telecom stakes is impressive: Tata Teleservices, Tata Communications, Modicom Networks and BPL Mobile. Peregrine-led Asian Infrastructure Fund has also been active with stakes in JT Mobiles and Usha Martin Telekom. British Telecom and the London-based Hindujas are among the list of active strategic investors.

But given the poor performance and long gestation of the telecom business, are they winners or losers? Time will tell.