Tales from Panchatantra: AGR

Nobody now remembers how the great shutdown of Champakvana began. All they know is the animals couldn’t reach out to others. And, the centre couldn’t hold. Things fell apart.

But that’s getting ahead of the story. Like the King said to Alice, let’s begin at the beginning and go on till we come to an end: then stop

For years, the animals of the great forest of Champakvana used their pigeon friends to communicate among themselves. Of course, they were slow and tended to get involved in love stories of human species (especially, Salman Khan). But they were reliable and didn’t charge a lot. In any case, all pigeons were owned by the Commonwealth of Champakvana (CoC) who didn’t want to make profits out of this. Sometime in 1880s, Champakvana got a new service called the telephone which allowed the animals to speak to other animals afar. For the next 100 years the telephone became reasonably popular in Champakvana and things went swimmingly. Pigeons were still helping Salman Khan occasionally though. By early 1990s, the demand for telecom services was becoming significant and the Commonwealth of Champakvana decided they can’t alone meet the needs of fellow animals.

And, that’s how we reached 1994. This was the year when the Champakvana Telecom Policy was unveiled by the Dept of Telecom (DoT). Now entrepreneurial animals could set up telecom companies who could serve the forest animals. The CoC issued telecom licenses and charged a fixed fee every year from the entrepreneurs. The fee was in the form of grass which was the primary form of currency in Champakvana (as decided during the Bretton Woods Conference long back).  Sometime in late 90s, the fixed telecom grass fee became a burden. The telecom players defaulted and CoC came up with an ingenious idea. The players could now pay fees as a percentage of their revenues and they called this the Adjusted Grass Revenues (AGR) based mechanism. The AGR was defined loosely as the grass revenues made by the telco adjusted for certain deductions. The license fee and spectrum usage fees were set at around 11-13 % of AGR. The animals (a monkey, a camel and a few assorted wild asses) signed on this agreement without nailing down the definition of adjusted grass revenues with DoT.

This was a fatal error in hindsight.

Soon, the DoT (egged by CoC) defined the Adjusted Grass Revenues as all revenues from both telecom and non telecom services. This didn’t surprise the old tortoise who had seen many CoCs come and go for over two centuries. Nobody held a candle to the greed and arbitrariness of a CoC. The telco animals came together in group and called themselves Champakvana Operations Association of Interests (COAI). In 2005, they challenged the CoC’s definition of AGR at an appellate tribunal set up in the forest called TDSAT. They wanted AGR to only include revenues from telecom services and TDSAT agreed with them in their ruling in 2007.

In 2010-11, the maha scam of all time was unravelled by the Counter & Accumulator of Grass (CAG) in the issuance of telcom license process by the CoC then. 1.76 Lac Crores of grass was apparently the loss because of corrupt decisions of the CoC which didn’t auction licenses at market rates and, instead, gave it away somewhat arbitrarily for kickbacks. This was called the 2 Grass scam (or 2G scam). All hell broke loose. The CoC was rattled and they decided to not do anything that might even remotely smack of arbitrariness in this sector from here on. The loss of this CoC in the next jungle elections was almost written by this time. Anyway, to appear anti-crony capitalists, the DoT moved the MahaSarpanch (the highest court of the jungle) asking for the AGR definition to include all revenues. The Mahasarpanch decided to set aside TDSAT order and asked every telecom player to individually approach TDSAT for challenging any demand from DoT which would then go to merit of each case specifically and decide. All telecom players decided to go to TDSAT. By 2015, TDSAT decided in favour of telecom players by defining AGR as all revenues except that made from non telecom sources. DoT again went to MahaSarpanch against this order of TDSAT.

After the maha 2G scam of 2011, all spectrum was compulsorily auctioned by CoC at very high base prices. The telecom players went for these bids aggressively and took large loans to buy the spectrum. This was because Champakvana was a huge forest with lots of animals who still needed phone services. Banks took huge risks giving large loans to these players in the hope they will be repaid when the business takes off. In the meantime, a new player called Oji-Oji-Oji had emerged in this sector in 2015 which was funded by Mastodon, the largest entrepreneur of Champakvana. Through various sharp pricing tactics and fortuitous policy breaks (the mastodon was probably born under some really lucky alignment of stars), Oji-Oji-Oji rewrote the rules of the game in the market by giving away its services for almost throwaway prices. Caught in a pincer move between huge loans and loss in market share because of Oji-Oji-Oji, most telecom players went bankrupt and exited the market. From about 12 players in 2009, Champakvana was left with just 3 telecom players in 2019. Banks had to write down huge loans they gave this sector and lived to tell their tale of suffering.

In Oct 2019, the MahaSarpanch set aside the 2015 TDSAT order and upheld the DoT and CoC view of AGR as all revenues (both telecom and non telecom). It directed the 2 players and Oji-Oji-Oji to pay up AGR dues with penalty and interest immediately. No one could figure out how this judgment came about. It was a bolt from the blue. Oji-Oji-Oji had come in only in 2015 so it hardly had anything to pay. The two old players – monkey and camel – were to now pay 36,000 Crs and 53,000 Crs of grass. The camel was already slow and tired and this was the last straw (literally). It went down. Champakvana was left with only 2 telecom players who now started increasing their prices. After a while the monkey decided it had enough of the monkey business and exited the sector. Telecom was now a monopoly in Champakvana and nobody could do anything about it.

One morning all the animals protested and brought the jungle to a stop to bring down telecom prices and the monopoly control. It didn’t matter. The monopoly shut down the network to teach the animals a lesson. Nobody could use the phone anymore.

And, the great shutdown started.

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