Last month, IT and communications minister Dayanidhi Maran resigned from his position following differences over succession issues with his political mentor, Tamil Nadu chief minister M. Karunanidhi.The acceptance of his resignation, despite a high-profile and successful tenure, highlighted the dilemma of coalition governments.

A. Raja, then minister for environment and forests, was brought in to replace Maran to steer the high growth in the IT and telecom industry.

Maran’s unexpected resignation came as a jolt to the telecom industry. The 41year-old dynamic minister had brought in many positive changes in the sector and was well liked by the industry. “His role in the telecom sector has been of great significance to the IT software and services industry. It has also resulted in India becoming the fastest growing mobile telephony market in the world,” observes IT industry body Nasscom.

Adds T.V. Ramachandran, director general of the Cellular Operators Association of India (COAI): “The results are for all to see. The last three years have been a dream run for the Indian telecom sector with strong growth, affordable tariffs and huge consumer benefits.

In the 26 months that he held office, Maran continued the momentum of reforms, which consequently saw the subscriber base rise from less than 50 million to 167 million subscribers as of April 2007.During his office, India joined the 100 million mobile club along with four other countries and surpassed China in monthly mobile subscriber additions notching up over 6 million every month.

A catalyst in driving down telecom costs for users, his biggest achievement remains the “OneIndia” concept, introduced in January 2006. Under this, BSNL and MTNL launched schemes reducing local and STD call charges to Re 1 a minute, forcing private telecom companies to follow suit. He then targeted domestic and international bandwidth prices, triggering a fall of nearly 70 per cent. He was also instrumental in bringing down roaming and long distance tariffs for the end-user.

While Maran’s broader ambition was to give a fillip to broadband services and rural telephony, in a more micro sense, he remained focused on intensifying competition across segments in order to ensure better quality of service and lower tariffs.He was, for instance, instrumental in easing entry barriers in the internet and long distance telephony sectors. The last few months also saw a new era of bandwidth resellers, introducing second-tier competition in the long distance business.

Of course, there were several downsides to his regime as well. And detractors too. His disagreements with the Tatas were public knowledge as was his strained relationship with former TRAI chairman Pradip Baijal, which was abundantly evident over the access deficit charge issue.

While GSM operators in general were in favour of Maran, some CDMA operators felt short-changed by him. They believed Maran’s policy often failed to deliver  was tilted towards GSM operators. Also, Maran was known to have kept the pressure off the state-owned telecom companies, BSNL and MTNL, in order to protect them from private operators.

A challenging task

With Dayanidhi Maran having set a brisk pace for the telecom sector, expectations of the new IT and communications minister, Andimuthu Raja, are high. The industry is eagerly and closely watching his moves and, inevitably, comparing him with his more vocal predecessor.

Raja’s first initiative indicates that he is keen to continue the line of reforms put in motion by Maran. Moving a step closer to a zero roaming tariff regime, Raja urged the two telecom PSUs, BSNL and MTNL, to reduce roaming charges substantially. In fact, the new plan offers 300 minutes of free incoming calls per month while roaming.

Raja has not wasted much time after assuming office in expressing his disapproval of the bid prices of BSNL’s 45.5 million line GSM tender. He has very vocally criticised the bids of Ericsson and Nokia, at $107 and $177 per line respectively, as too high. He has advised BSNL to renegotiate the prices, targeting $100 per line or below.

An advocate by training, Raja has so far steered clear of controversy by not publicly addressing any of the key concerns facing the industry. For instance, on being questioned about the prickly issue of 3G spectrum allocation, he responded with a terse one-liner: “I am working on a comprehensive 3G policy.” This is despite the fact that DoT has reportedly finalised a draft 3G policy.

Nevertheless, given his substantial political experience, it is hoped that Raja will give a fresh impetus to the sector. Elected to the Lok Sabha for the first time in 1996, Raja has held several top positions in the union government, including as minister of state for rural development and minister of state for health and family welfare. Prior to his current position, he was union minister for environment and forests.

Raja is an avid reader. He has also written An Autobiography of Democracy and Oru Suyasarithai, a collection of Tamil poems. How the poet-politician fares in the telecom sector is what industry watchers are now looking out for.

Telecom analysts further note that instead of taking any crucial decisions, Maran mostly leveraged on the decisions of his predecessors. Spectrum allocation is a glaring example. A difficult issue, it is yet to be resolved.

On the 3G policy, Maran’s interest in allowing foreign players to participate has backfired with both GSM and CDMA operators finding no justification in bringing in more players, especially in light of scarce spectrum.

Still, the praise outweighs the criticism. Analysts feel that Maran’s business background gave him an edge in shaping the sector as a corporate entity ?? benefiting end-users while looking to increase profitability at the same time. His sales pitch to companies abroad helped clinch some big-ticket investments from companies like IBM, Dell and Flextronics. He was also keen to promote India as a manufacturing destination by getting global telecom companies like Nokia, Motorola and Ericsson to invest in setting up manufacturing hubs. He also supported Vodafone’s acquisition of Hutch.

Industry stakeholders are now concerned that his exit will upset the telecom applecart and affect continuity. But analysts say this is unlikely. An industry that is already on a steep growth trajectory can certainly survive changes at the helm. As Sunil Bharti Mittal, CMD of the Bharti Group puts it, “The growth is not dependent solely on an individual. It is a collective thing. We are hopeful that things will be good in the future.” Ramachandran agrees: “The industry is unlikely to lose its growth momentum due to the change in leadership.

Raja seems to be headed in that direction. While he is still learning the ropes of the industry, he has indicated that he will be completing his predecessor’s unfinished agenda, which includes the much-awaited 3G spectrum policy; rationalising duties and levies; and introducing free broadband services and free roaming from June 2007.The industry is watching eagerly.