Many people have probably heard that BJP leader Pramod Mahajan passed away yesterday after being shot by his brother in a family dispute. From the obituaries I’ve been reading and from the Wikipedia page, an image of Mahajan as a very complex and interesting figure emerges — an icon both for some positive shifts in the Indian political system as well as of some of the problems that have come with it. Rather than dwell on the negative, in this post I’m going to talk a little about Mahajan’s role as the architect in the deregulation of India’s mobile phone industry in the early 2000s. I view this as something positive Mahajan did that may actually have been against the law at the time he did it.
Mahajan’s political record is somewhat mixed. Widely acclaimed as a brilliant campaign organizer, Mahajan was credited with helping the BJP rise to power in 1998, and with the consolidation of its power in state elections in 2003. But Mahajan is also blamed for the BJP’s shocking electoral loss in 2004, and indeed, he publicly accepted the blame for making strategic mistakes in that campaign.
In December, the BBC suggested that he was one of a handful of people being considered to take over the reigns of the BJP party. But the same article describes him as part of a new breed of “technocrat leaders who lack a grassroots base,” suggesting that Mahajan perhaps wasn’t quite of the stature of people like Vajpayee or Advani.
At any rate, the technocrat angle plays heavily in Mahajan’s involvement with the deregulation of India’s mobile telecom industry. This process of deregulation occurred between 2001 and 2003, and led to India’s spectacular cell phone boom, which has been a major engine of economic growth and has also transformed Indian society in some interesting ways. (The ripple effects are still being felt, and I’d be curious to hear readers’ thoughts about the mobile telecom revolution.)
The best summaries of the deregulation process I’ve seen are at The Hindu’s Business Line and Frontline. As I understand it from these articles, in 2001 there was still a law on the books in India distinguishing between licenses for “full mobility” and licenses for limited range (or WLL) service. Only a handful of companies had the coveted full mobility licenses, and compatibility between the two wasn’t allowed even though the technology was available to allow phones to switch back and forth between different kinds of service. Some of this gets pretty technical:
Limited mobility or Wireless in Local Loop (WLL) refers to a mobile service that should work only in a defined area. This is in contrast to cellular mobility, which works all over the country. There was a long-standing policy that in the interest of revenue generation, the limited mobility and cellular mobility services should be kept separate and distinct. The Telecom Regulatory Authority of India (TRAI) had recommended the use of a V5.2 interface using Public Switched Telephone Network (PSTN) architecture for WLL services, and in a letter on September 28, 2001, urged the Department of Telecommunications (DoT) (under Mahajan’s Ministry) to ensure that this interface was not tampered with so that mobility was limited to the short-distance communication area in which the subscriber was registered. (link)
Reliance Infocomm (RIC) was a big winner in the subsequent deregulation of the system because it was able to roll out a service that worked with both systems (freely switching between the two) without having to get an expensive license for “full mobility.”
On February 26, 2002, RIC rolled out its WLL (mobile) network with full-fledged mobile switching centres, totally ignoring the V5.2 restrictions. This in effect enabled RIC to offer full cellular mobility through multiple registrations/roaming, and violated the licence agreement. RIC rolled out its service in full public gaze, with a mega advertising campaign. Mahajan inaugurated the scheme. (link)
In 2002, RIC offered a service that was cheaper than anything else available on the time, and that worked everywhere. Pretty soon the other companies had to cut their rates to match, and the cell phone boom was on. Millions of people for whom mobile phones (or in many cases, any phone at all) would have been an impossible luxury went out and got phones and cheap, pay-as-you-go subscriptions all over the country.
Mahajan was investigated for favoring Reliance through a quid pro quo arrangement. It was revealed that he did have some connections to individuals who made a lot of money on Reliance stock, but as far as I’ve been able to discover he didn’t receive any direct personal benefit. Corruption charges were filed with the Courts, but were never pursued aggressively by the opposition Congress party, and the scandal went away.
Read the Frontline article and see what you think. My own opinion is, allowing Reliance to go forward in 2002 (perhaps against the letter of the law) was a very smart decision that made a difference in the lives of many people all over India — not just the elites. And while I don’t agree with Mahajan’s approach to secularism (I’m a Congress-wallah) or what the BJP stands for in general, I think the Indian cell-phone boom might be a fitting way to remember Pramod Mahajan.
