Radia Tapes – Ratan Tata

(Source : http://www.outlookindia.com)

Jun 11, 2009 15:57:59

Venkat: hello

Niira Radia: Venkat Hi.

Venkat: Hi

Can you talk?

Venkat: Yeah, yeah, tell me

Niira Radia: I just wanted to check. I just got a call from … R.S. Thakur to go to TACO [Tata AutoComp]. I believe Mr Tata has given some
clearances… on is it some of the JV thing is disbanded, right?

Venkat: Yes, that’s right.

Niira Radia: I just wanted to get some heads up from you because earlier we were briefed by Taco on it and I just wanted to get a heads up from you in terms of what was the final approval that’s being given so that beforeI meet him on Monday, I know what’s the plan for media that one needs to adopt

Venkat: I don’t know the details. Either Mr [unclear] or Mr Gopal can fill in

Niira Radia: OK, I will talk to them

Venkat: But thing is Mr Tata’s no longer the chairman of Taco

Niira Radia: I know that, yeah

Venkat: Yeah

Niira Radia: OK, ok, are you gonna be in office later?

Venkat: Yes, I am there in office. I might be back a little late but otherwise..

Niira Radia: You are with Mr Tata, right? I need to brief him on telecom, haan, just let him know

Venkat: Yeah, just one second

Niira Radia: Yeah, ok
——————————————————————————–
Ratan Tata: Hi.

Niira Radia: Hi, how are you?

Ratan Tata: Fine, thanks.

Niira Radia: I haven’t troubled you last few days, I said let me call you once. I was hoping to come to Bombay but then I know you are not going to go away next week, you aren’t there next week

Ratan Tata: I am going away day after tomorrow

Niira Radia: I was going to come on Sunday but then I remembered you aren’t there next week so I thought let me try to shift my travel to come week after, when you are there. Is that going to be okay?

Ratan Tata: Yes, that’s fine

Niira Radia: Yeah? Would I get a chance to meet you

Ratan Tata: Yes, of course

Niira Radia: See I just need to brief you on Telecom. But maybe… shall I speak to you when you are at home in the evening, would that be better?

Ratan Tata: No, I am in the car… up to you…

Niira Radia: Ok. I just…just… Ravi and I had… I mean Anil and I had gone to meet up with minister.

Ratan Tata: Yeah

Niira Radia: And I have been meeting him separately on…. The sense I am getting… and that’s the sense I have been getting is that whilst he is moving ahead
as far as 3G is concerned…

Ratan Tata: Yeah

Niira Radia: …the sense I am getting is that he seems to be pretty hellbent on this 6.25 MHtz to go to Anil Ambani.

Ratan Tata: Uh, huh

Niira Radia: And I have told him that we will oppose it vehemently … it will not… unless we get all our spectrum.. so we have moved 2-3 processes… one is that we want harmonisation of spectrum to start…with harmonisation taking place, a lot of the Spectrum will get clear in some of the areas.

Ratan Tata: Uh, huh

Niira Radia: The second thing I have said to him is that there is about 5 MHtz that is coming in from Defence on 2G

Ratan Tata: Yeah

Niira Radia: What I am proposing to him is that you first give us our 4.4 in Delhi…on that…

Ratan Tata: Yeah

Niira Radia: …because that holds us up…. We’ve moved 3-4 processes separately with the department … I have met Dr Sarma also. But the sense I am getting is that Dr Sarma will not say no to his own judgment. He’s been given the… the minister’s gonna involve him in the consultation process

Ratan Tata: Yeah

Niira Radia: On this whole 6.25 issue…

Ratan Tata: Yeah

Niira Radia: I have …Given that it was Dr Sarma’s own judgment in TDSAT that they are reling on, he is obviously not going to obviously contradict his own judgment. So I told you…

Ratan Tata: And his judgment is 6.25?

Niira Radia: Correct…yeah…

Ratan Tata: I see

Niira Radia: It’s 6.25… meaning that… DoC’s recent committee has given a report, which was set up during a time when the election process was on, which said that we should limit it to 4.4 as being the licence condition and then thereafer we should just move to proceeding towards either a fee-determined model which is what you had earlier you had proposed in the 3G segment but in the 2G also they are saying let’s agree on a fee, and what is the basis we agree on that fee, let’s work out whether it is … over a period of time or whether it is…

Ratan Tata: But …Would Sarma subscribe to a view that 6.25 would only give it to one person?

Niira Radia: No, what Dr Sarma has done is… it is a very clever judgment, Ratan. The judgement says your licence condition earlier used to be limited to 4.4 and then you were entitled to another 1.8 which took you up to 6.2. Between the 4.4 and the 1.8 additional was the root of subscriber base…

Ratan Tata: Yeah

Niira Radia: So you got 4.4 as your entitlement when you became a licence holder…

Ratan Tata: Yeah

Niira Radia: …and thereafter you had to have X amount of subscribers to qualify for additional 1.8

Ratan Tata: Yeah

Niira Radia: What has happened here is that Dr Sarma’s view is, in the judgement, that all subscribers…uh, that all licence holders should be entitled to
6.25 in any case so that they can plan their network.

Ratan Tata: Yeah

Niira Radia: And thereafter there should be an agreed fee-determination that should take place. And what is that fee can be determined either be through an auction route or it can be through a model of what has been an cap-ex and op-ex [?] spend that you’ve had to incur if you were taking spectrum up. And all work out… Basically, he’s given two to three different formulas that one could apply which would in effect all end up taking your EGRs [?] up to 9 to 12 %

Ratan Tata: Yeah

Niira Radia: The challenge is that whilst he’s given a very innocent, uh, judgement, the other side has upped the subscriber-base by having false subscribers. For example, today, in Jammu they have been deactivated by 36,000 of connections because they were supplying them to militants [?]. And they were doing all sorts of wrong stuff. I know, we know that their subscriber-base is fudged almost to 50% By giving false subscriber-base — where Dr Sarna is silent in his judgement on that — they will be able to secure 6.25 in all circles and they’d almost end up jumping the queue again So I told Raja that your 6.25 can only happen to one party if Anil Ambani … if first Tata Tele Services …as from my point of view is the second licence.. if you’ve given Anil Ambani …already 4.4, we are entitled to Spectrum after that immediately. But, actually, my first complaint is that, no, we were entitled as #1…
Ratan Tata: Yeah

Niira Radia: …but you have now made a fait accompli and given them 4.4, oky? So okay, before you give Unitech, before you give Swan, before you give anybody else, we should be the first in queue because as far as we are concerned, dual technology was an existing licence for all and in your criteria, when you made submission to court, you said ‘existing licence holders’ first. So We automatically get entitled to that and then after that whether Sunil Mittal gets 1 MHz in Delhi or whatever, then the new licences operate… He… there is an interpretation issue on that and they are playing very cleverly on it again… My worry is that after they give 6.25 to Anil Ambani…

Ratan Tata: Um, hmmm

Niira Radia: …including in Delhi, because he has just gone in and given an application for Delhi and key metros, and we will be struggling because there is only 5 MHz being released by Defence for Delhi and we will be again struggling…

Ratan Tata: Yeah

Niira Radia: …Because we would not have built up our subscriber base any case– between 4.4 and 6.25… because we are just launching now.

Ratan Tata: Yeah

Niira Radia: And we are not fudging like they have done.
Ratan Tata: Yeah

Niira Radia: So they will now make us wait another one and a half to two years for getting Spectrum. So I am saying to Raja that the moment you shift from this … because there is an interpretation … and I have said this to Dr Sarma also, I said Dr Sarma, don’t take this report because you will have no credibility because you have already given a judgement and you can’t be doing this report because you are in conflict technically speaking because y’know you are looking at your judgement again this time as TRAI…So there is a grey area there

Ratan Tata: You need to find a way that he doesn’t oppose this judgment and you still gives you what you believe is right

Niira Radia: Which is why I told him I told him that if you say you give me 6.25… er, that you are going to give the other side 6.25 first, please first assure me that there is 4.4 available for us everywhere else… everywhere that we are entitled to get When we do our sums on the Spectrum spread that is available…we get stuck in Delhi and some key areas

Ratan Tata: Yeah because if he wants a way to oppose his judgment and clarifies that in the fairness of things, everyone should get the base of 4.4

Niira Radia: 4.4… yeah, that’s what I am telling him Ratan and that’s what he is not in agreement with
Ratan Tata: Why?

Niira Radia: Neither Raja nor him…are in agreement.. because his basic premise is that I think the operators must have 6.25 because that is what his judgment says they should have 6.25 even if that’s on …subscriber base…

Ratan Tata: That’s fine but there’s no sense in this if Spectrum is not available…

Niira Radia: hmmm

Ratan Tata: … that you stick by that so that only one subscriber gets it

Niira Radia: No, he is giving us another carrot and that is if you go to TDSAT now you will get helped and you come to me somehow and I will say that you were second in the queue and that operators like Swan and Telenor who should not have got spectrum…or Unitech… who should not have got Spectrum because it was not rolled down, their spectrum should be taken away and given to us. I said no body is gonna allow that to happen because they will get a stay

Ratan Tata: Yeah

Niira Radia: They’ll go to Supreme Court and they will buy their way through a stay and we’ll never get it … so don’t show us something which you and I know is not going to happen. So when I went to Anil Sardana on Monday and took him to meet the minister on Tuesday, I told him that, I said don’t accept this because this is just.. they’re just showing you a route which is going to be unacceptable… let’s look at what’s available on the ground… the moment we allow 6.25, we are stuck. So this is…So I just wanted to tell you this.. I am seeing him again. Raja’s promised me that he’s not going to do anything in a hurry, which I think he will not. I made Kani speak to him as well. He’s not going to do anything in a hurry at all, he’s promised that. So we’ve got some time and we’re.. I am gonna to meet Dr Sarma again on Monday. I will try not to come to Bombay and finish this in the course of next week. I just wanted to tell you that this is actually what’s actually going on on the ground… I wanna go with this thing that 4.4 is the entitlement and everyone must get that before we even start talking on 6.25

Ratan Tata: Yeah, but if he can word it… so that he agrees to 6.25 but he just makes this a precondition…

Niira Radia: Yeah…

Ratan Tata: …or clarifies that it would be fair that this be so otherwise it would be a monopoly…

Niira Radia: Hmmm

Ratan Tata: ….or not a monopoly…but a… a .. disparity…

Niira Radia: Disparity, yeah. It’s a grave disparity… it’s craziness and I mean… y’know, they are getting [unclear?]…. in various cricles to agree to their figures which are fudged … and there’s no way… there has to be a mechanism of actually verifying subscribers… of all operators.. I mean, they are saying, fine, y’know, we are comfortable if you verify our subscribers as well…We have no problems with that as long as … we can launch a service and you don’t put us at a disadvantage … we need our basic 4.4 to even launch

Ratan Tata: Yeah

Niira Radia: So, yeah, that’s the sort of thought process… Just want to tell you that Round II of the telecom battle starts. I don’t know how many more battles there will be.

Ratan Tata: I’m surprised that Raja after all that you supposedly did for him is playing this game.

Niira Radia: I met…I explained to Kani. I met her yesterday on the way home last evening. I told her, Kani, look, this is what is happening. You need to have to have a word with him. And so…She said, give me a note and I’m gonna just call him up and tell him that he has to behave. He (Raja) very clearly told me, ‘Tell me, Niira, how can I go against what the court has said?” So I said, ‘Hello, Mr Raja, you can go against the court. You don’t have to accept what the court has said because 4.4 (megahertz) is what the licence entitlement is and it’s for you to interpret.’ So there is this little game going on.

Ratan Tata: But now with the new attorney-general or whatever he is…

Niira Radia: No, Ratan, that’s a good thing. I’ll tell you why—because he can only handle constitutional matters. The solicitor-general is the gentleman—I told you about the swimming pool thing—Gopal Subramaniam. He’s the guy who has to do the interpretation.

Ratan Tata: I see.

Niira Radia: I’m going to see him. I sent him a message and he said he will call back at around 5.30-6 when he gets free and he reaches home. So I will be briefing him…. Actually, he hates them (the Anil Ambani group). I’m not sure he’ll agree to what they say.
Ratan Tata: Yeah

Niira Radia: He’s a very upright person….

Ratan Tata: Yeah

Niira Radia: I think Raja will be trying to get in the Attorney General. He briefed Prime Minister yesterday about 3G saying he wants to put up a 3G cabinet note and doesn’t want to go to the GoM. I think that’s a bit of a hogwash.

Ratan Tata: Uh huh

Niira Radia: I think They’ll do all this drama but I don’t think there’ll be 3G auctioning before March next year.

Ratan Tata: Uh huh

Niira Radia: I don’t think… they’re not gonna do it in a hurry.

Ratan Tata: Uh huh

Niira Radia: And the only reason they want to do 6.25 (MHZ) for Anil is so that he can get AT&T to buy into his company. AT&T is talking to him right now, Ratan.

Ratan Tata: I see…

Niira Radia: Yeah, coz he needs an equity partner otherwise he can’t survive with the debt he’s got. His avenues have closed on raising more money unless he
fudges some other things and raises money.

Ratan Tata: Why isn’t all of this getting exposed?

Niira Radia: Ratan, they’re buying up the media. They’re using their buying power with the media. For every ad they place…I can’t explain to you the discussions I have had with the media, in particular the Times Group and Dainik Bhaskar—the Aggarwal guys who came and met you….

Ratan Tata: Yeah…

Niira Radia: They say, Niira, every time we do a negative story on them, they withdraw advertising. So, I said, fine, others can also withdraw advertising…. So just because we are upright about how we do things and we don’t leverage … They leverage every dollar of their media-spend to ensure they don’t get any negative publicity I am sitting on, you know, the sort of stuff, you know, that I’ve got is unbelievable and the same thing… I’ve made even Mukesh’s people talk to them but then ultimately it’s come down to the… media-spend.
We need leverage with the media. The media has become very, very greedy….
It will eventually come out. When the first time happens… when the barriers get broken, then it’s a different thing altogether … then everybody starts saying, oh we are the men with integrity… we are this thing… but they are as bad as … [hell? ’em?]
I have already, y’know, very quietly, through journalists who are straightforward… I have done a lot of stories already … All on his debt I have done lots of stories already all on his debts… I have had most of the analysts community writing reports on it which is circulating … I have done all that … through analysts… like UBS has done a report, Kotak has done a report, Mcquiry [check?] has done a report… on both the power sector as well as telecom in which… in that he’s got huge problems … that his [?] are not correct, his revenue figures seem to be a little problematic and that he would find it difficult to raise any further funds. So all that is already there…but what happens: the media doesn’t carry that, or when they carry, so that they don’t get… they dilute it because he’s there sitting on their heads… he’s got two people just monitoring [?]…play in the media… So I am saying to Anil… I told Anil Sardana also the same thing… I said… we have have to advertise because these are our brands… and we do what we have to do… but we gonna have to also start… we have to leverage… some part of it … you know we have to tighten this thing… We can’t work in isolation.. Working in isolation is causing this challenge.. I told Raja very clearly that you are going to have negative press because.. anything above.. because you give this guy 6.25… [unclear] Because Sunil Mittal is not going to sit quiet. And he’s told me that he’s not going to sit quiet.
[silence]

Ratan Tata: Hmm

Niira Radia: So there’s.. a … so I will talk to Anil again…Anil… he and I were supposed to touch base today…

Ratan Tata: Yeah

Niira Radia: … But I am meeting, Ratan, everyone I am required to meet… I don’t think the report will happen in a hurry so we will go through a consultation process

Ratan Tata: OK

Niira Radia: So let’s see what we can … best do. We’ll be aggressive about our approach.

Ratan Tata: OK

Niira Radia: Yeah? I will see you then when you are back

Ratan Tata: Yeah

Niira Radia: OK then, bye

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