 "<b>Newsmakers of the year</B>: Mukesh Ambani & Sunil Mittal")
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Mukesh Ambani
Chairman & Managing Director, Reliance Industries
Free rider
In the family settlement of 2005, Mukesh Ambani handedover the telecom business to his younger brother, Anil, yet the sector’s allure continued to captivate him. Eleven years later, he started his second innings in telecom with the launch of Reliance Jio.
If his first foray was guided by his father Dhirubhai’s advice that the service will succeed only if the cost of making a call is less than a postcard, this time Mukesh Ambani took the game a notch higher with free voice calls, dirt-cheap data tariff and no billing for six months.
His rivals, however, were much stronger than they were 15 years ago, and Ambani needed a radical data plan to disrupt the market.
Ambani, who has in the past made clear his preference for working in regulated sectors, waded into a spat even before his service could be launched. When Reliance Jio was in beta mode, he alleged that the incumbent networks were not providing him adequate inter-connectivity, which had resulted in large-scale call drops.
The incumbents hit back to say that Reliance Jio had already given more than a million connections, even though it was just testing its network. Let it launch and then ask for the required inter-connectivity, they said.
And, when Reliance Jio extended its free offer by three months to March 31, albeit under a new name (Happy New Year Offer), Bharti Airtel, the largest telecom service provider in the country, urged the Telecom Disputes and Settlement
Appellate Tribunal to enforce the Trai rule that no promotion can run beyond 90 days.
In less than four months, Ambani's strategy has netted over 50 million subscribers — nobody in the world has done it faster. But, the real test will begin once the free offer ends — the incumbents, including Bharti Airtel, Vodafone and Idea Cellular, have all dropped tariffs to take on Reliance Jio.
Sunil Mittal
Founder & Chairman of Bharti Enterprises
Call to arms
Sunil Mittal is the undisputed leader in the telecom market. Over the past 20 years, he has proven that he is always on top of the situation, whether it is policy management, financial structuring or marketing. He is pugnacious and loves a good fight — and it is easy to predict that he will give Mukesh Ambani's Reliance Jio a run for its money.
Since telecom is a regulated sector, much of their battles were fought in New Delhi’s corridors of power. Allegations of policy manipulation began to fly thick and fast. Thus, when call drops became a national issue in 2015, some of the incumbent networks claimed it was a controversy triggered to discredit them. What is certain is that the matter riled the Telecom Regulatory Authority of India enough to impose a penalty on the networks: one rupee for every dropped call, subject to a maximum of Rs 3.
The incumbents appealed against the order in the Supreme Court on the ground that though the licence conditions allowed up to 2% call drops, Trai’s penalty was on all call drops — a violation of the licence conditions. The Supreme Court struck down the Trai order.
Rumour mills began to work overtime again when Trai decided to allow differential data tariffs so long as the service was offered in a “closed electronics communications network”. This was like a “walled garden”, a service exclusively for the subscriber of a network. It was more like an intranet, and not the internet, and hence did not violate the principle of net neutrality.
The incumbents, smarting under the ban on their zero rating plans, which offered discriminatory pricing of data, were quick to cry foul. Privately, they alleged this policy flip-flop was being done to benefit the newcomer, Reliance Jio.
And when the Department of Telecommunications priced the 700 MHz band exorbitantly, the incumbents saw in it a plan to clip their wings. The band, which was to be auctioned for the first time this year, is highly effective for 4G services. The high price, the incumbents said, was a ploy to deprive them of this spectrum, especially since Reliance Jio owned spectrum in the 800 MHz band. Bharti Airtel was the first to say that it won’t bid for spectrum in the 700 MHz band.
Mittal, who was, early in life, denied a Maruti Suzuki dealership, could be the strongest rival Ambani has ever collided with.