  “The business of the journalist is to destroy the truth; to lie outright; to pervert; to vilify; to fawn at the feet of mammon, and to sell the country for his daily bread. We are the tools and vassals of the rich men behind the scenes. We are the jumping jacks, they pull the strings and we dance.” – John Swinton (former Editor-in-chief, New York Times)
How true, even more, today, though said some 60 years ago! Lately, a dangerous trend has been emerging in the Indian press wherein self-styled “independent analysts” have been misleading the public, policy makers, regulators and the government with respect to developments in competitive sectors such as telecom. Some pink papers have released a slew of so-called reports that unfairly criticize moves to infuse money into the exchequer and obfuscate major internal discrepancies committed by leading players. Clearly the concession-hungry telecom sector has enough appetite left to gobble up more scarce natural resources of the country at throw away prices and still show losses in their account books. No matter what the names under the headline are, these voices are not voices of independent analysts, these are the voices of the Telecomm industry, especially those of Tata Tele, Aircel and Reliance Comm, screaming, “Yeh dil maange more.”
The primary constructor, on which the authors of these articles have based their arguments against the Merger and Acquisition (M&A) guidelines issued by the Department of Telecom (DoT), is that target companies are heavily debt-ridden and therefore unattractive to acquirers. It seems that the superficiality of reporting on other beats such as fashion, entertainment and sports has now begun to invade the business space as well. All an author needs to do is be presumptuous, show readers only the tips of some massive icebergs of mismanagement, and create a buzz against regulatory interventions. In the aforementioned articles, therefore, the authors mention the outstanding debt on Tata Teleservices, Reliance, Airtel, Vodafone and Aircel, without once mentioning the reasons for this debt or so much as putting this situation in historical context, despite getting all the attention and dispensations by all governments at all times.
Tata Teleservices, Reliance and Aircel are companies, amongst others those have earlier vociferously protested against independent audits by the Comptroller and Auditor General (CAG). This raises serious questions about not only the purpose of raising these debts but also the utilization of the proceeds of this debt. Although the pink papers choose to ignore these issues, perhaps expecting their readers to simply imagine answers sympathetic to the cause of these debt-ridden companies, this author is inclined to think that a proper CAG audit will expose money squandering and investments in extraneous assets and non-core businesses by the leadership of these companies as well as not paying Government dues appropriately.
The articles criticizing the M&A guidelines, have taken particular offense with the clause that mandates acquirers to pay market linked prices for spectrum in possession of the acquired company to the government. Here the reporters conveniently black out M&A possibilities of one kind to champion the cause of M&A of another kind, by contrast. While the articles quote experts who say companies with administered spectrum are attractive targets for acquirers because of their network infrastructure and customer assets, they stay mum on the possibility of a company with substantial administered spectrum becoming an acquirer itself and acquiring a company which has paid market-linked prices for spectrum. The acquirer in such a case would continue to enjoy benefits of administered prices, in sheer spite of the Supreme Court judgment quashing such licenses because of an erroneous and willful mis-interpretation by the licensor. In the event that the acquirer happens to hold spectrum with market linked prices, according to the extant guidelines, he/she will end up paying the market linked price of the acquired company’s spectrum should they be holding airwaves through administered allocation. The DoT has therefore judiciously tackled this anomaly and leveled the playing field. But of course, the reporters have shaded this aspect of the regulation in dark grey with the finesse of commercial artists.
Finally, reporters are strangely silent on how Tata Teleservices, Reliance, Airtel, Vodafone and Aircel managed to build, respectively, INR 28,000 crore, INR 35,000 crore and INR 14,000 crore in debt despite having enormous equity infusion by the likes of, respectively, NTT DoCoMo of Japan, ECB by Reliance and Maxis of Malaysia. Sadly, what these articles have missed, knowingly or unknowingly, is that this is clearly a case of gross internal mismanagement. Consolidation is admittedly the need of the hour in the telecom industry, but as much as ‘policy paralysis’ is a popular catchphrase; it is clearly not the primary obstacle to consolidation. There are deep-rooted problems within companies that need to be solved in order to facilitate consolidation.
Therefore, it is time for the public and the government to wake up to the limitations of business journalism today. We need to realize that there is either more to this trend than meets the eye or there is a bunch of scribes out there who should move out of business reporting. The problem with these reports is that they are confidently authored by people who know neither the history of the telecom sector, nor the geography, or the lay of the land in terms of telecom infrastructure. More importantly, fingers need to be pointed at the consultants of The Big Four, who blindly join hands with these morally corrupt companies in their attempts to swing public opinion in their favor. This big four or five act differently in different spaces, in India they understand the gullibility of the political and bureaucratic class, who at one negative press get cold feet, whereas the same guys preach different order back home in their own turfs where the astute regulators, policy makers would take them to task for misdemeanors.
As far as our administration is concerned, we await the days when reports about flight of foreign capital will not cause officials to start shaking like leaves and bow down in front of these inefficient giants. The fault lines are in those who are managing the sector with power “to destroy the truth; by using the tools and vassals behind the scenes”, resulting in the battle cry to ask for more, lest we are dead. The truth is “Government you are not the cause of demise of these companies, but they themselves have committed hara-kiri by sheer mismanagement”. You have bestowed enough of largesse on them, they deserve no more. Let them behave like grownups and not stand at traffic lights to ask for more. Let them not behave like trade unions to ask for bit by bit a la Salami Policy by scare mongering.
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