GSM License et. al..

The hottest business deal in the KSA over the last month or so, has been the bid for the 2nd GSM license in the country. All this while, the Saudi Telecom Company (STC) has enjoyed a monopoly over cellular services. In fact, for a long time, STC and its various subsidiaries had held a monopoly over all types of voice and data traffic. Quite like BSNL/VSNL in India. I think STC still holds a monopoly on data, but the Saudi Govt., a few months ago, awarded licenses to 4 VSAT operators. Small fry yet, but they are gradually trying to establish a presence as a data carrier for home users and probably small businesses, and in the not so distant future, POS terminals I guess.

The 2nd GSM license is a big deal. Yesterday, the govt. announced the highest commercial bid. The UAE based Etisalat bid 12 billion Riyals. That’s a little over $3.5 billion. Sounds like way too much to me. But I guess that’s the way it’s been all over the world. I don’t remember what Reliance, Bharti etc paid in India, but AFAIK, that was some astronomical amount too.

Over here, the real surprise though, has been the disqualification of Vodafone. There were 7 eligible bidders for the technical and commercial evaluation. Of these, Vodafone, and another company that’s owned by the Lebanese Prime Minister, were booted out during the technical evaluation phase. The Lebanese, it is more or less certain, were shown the door for political reasons. But Vodafone? Now that was a major surprise. I was told that Vodafone spent close to $11 million on the bid, going to great lengths to put up one heck of a show. One apocryphal tale has it that they had booked 6 seats (Executive Class), and the lucky passengers ? – 6 boxes of documents, and assorted supporting submissions. IAC, despite that, and other such extravagant indulguncies, the Brits were disqualified. My client is part of one of the consortiums still in the race, though it looks increasingly unlikely that they will win. He is one heck of a smart guy, dynamic and incredibly competitive. I haven’t seen him laugh much, but his joy was almost childlike as he recounted the Vodafone story.

I suppose, that by now, a few heads must have rolled in Vodafone. Being in business in no joke I tell you. But strange business, this thing about license fees. Personally, I think astronomical license fees are a lousy idea. We had this subject called Government, Society and Business (GSB) in the ISB. Prof. Shiv Kumar, the guy who took the course, was brilliant. GSB was one of the few subjects in which I managed an A. I always manage an A in the most useless subjects. Global Gyaan, that’s my area of expertise. I have this theory that all quizzers/lapsed quizzers are brilliant or are potentially brilliant at global gyaan. Actually, I have hazaar theories about quizzers. But I digress.

What I was going to say, was this – One of the topics we discussed in GSB was this idea of a “global public good”. Basically, any good or service that is non-exclusive and non-rival (Water would be one), and I will let you resort to google to figure out what that means exactly. Anyway, I would like to think of communication as a global public good. I think it’s not a very bright idea to make too much money out of communication. I still think rates are too high in India. Even 1 Rupee per minute I believe is a tad too much. I think Reliance’s price point was fine. 40p per minute. Don’t think it should be more than that. In fact, I think it shouldn’t ever be more than 25p per minute.

On a related note, I haven’t missed my mobile one bit. That’s not really surprising – I had never been too fond of them in the first place. Peer pressure, the fact that calling from a landline to a mobile was turning out to be rather expensive, and that the 2100 was too cute to resist, made me get one. I have been without one for a month and half now, and I think it’s just great. I am beginning to wonder if I need a mobile in India now. I love surprising cousins, and friends from my years at Hyd (seems like a millenium ago), with a call, but mostly it’s just a continous stream of messaging and local calls that I use it for. I think I can do without that, without affecting my relationships in any way. My current thinking is that I will keep it, but switch it on only in the evenings. Or maybe I will switch it off in the evenings. Something like that. Shall experiment a bit with that when I am back at Bangalore.

When, Come soon.


Posted on July 15, 2004, in Uncategorized. Bookmark the permalink. Leave a comment.

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