Chapter 3: By 1994, JRD Tata had passed on. Ratan Tata struggled to manage the veterans who would not let go of their fiefdoms. And had ideas on who would succeed them. Tata was just branding. Tata Sons really had no control because they only had minority shares in these companies. Sometimes in single digits.
When new businesses like Tata Cellular were being conceived off, who would fund these. Tata Sons had no liquidity. Dividends were a trickle. The only cash flow they had was from operations of TCS and TCS was a division. The income was taxable. Further TCS needed to invest money and bankers wanted Tata Sons to pledge whatever little shares they had to be able to raise money. It was hard to divert that money into new businesses like Cellular.
Besides a new genre of wheelor dealer businessmen had appeared. Ones who used every trick to get ahead. Wine, Women, Wealth. IAS dowry rates were at all time high. Canteens in places like IIT Delhi were buzzing with the mega sums seniors were raking in. Toppers from IIT Delhi or Banaras or Roorkee were no longer interested in going abroad or getting into business. This is the period when the Stephens and Allahabad University gang suddenly had new competition. It started in 1985 in IIT Kanpur and by 1995 every IITian other than IIT Bombay was lusting for the civil services – a license to mint.
And then in 1994 the unthinkable happened. Metro cellular license awardees did not include Tata, Birla or Dalmia. Or any industrialists of repute. They were all unknowns.
It was an aberration Tatas thought the courts would fix. But soon realised the courts themselves had now been fixed. Tata lost. He was out of the mobile race. But worse Tata Lucent wasn’t getting any equipment orders either. They were left selling PBX systems to Taj hotels.
Sometime between 1994 and 1996, Ratan Tata turned to the dark side. By 2005 the shift to the dark side was complete. On one side, the Tatas looked for world leaders to partner. On the market side they looked for wheeler dealers to deliver licenses, bank loans, govt equity infusions, subsidies etc. If there was money to be made – Tatas would be there.
But back to Vodafone. Sterling Cellular led by Ramraj as the professional face and unknown shareholders was galloping ahead with Motorola as the equipment vendor.
Problem is Motorola had never really build a high traffic GSM network. GSM was Europe – only they knew how to build one.
Primetel, the Indian r&d company had never designed anything before. Even though the Internet had just arrived and was helping.
On 31.8.1995, Sterling Cellular went live with a 3:1 concatenation ratio in the circuit switching hierarchy. 31318 was the code for launch. It was also the last digits of the first SIM card. And that phone was with me and still is.
The network started operations.
The network collapsed.
The design was wrong.
The equipment was wrong.
The layout was wrong.
Oh my god !!! There was complete panic.