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When India decided to open up the telecom sector to private players back in the early 1990s, there were not too many takers. In 1992, Hong Kong-based Hutchison Whampoa, along with the Max Group, was among the first to get a cellular licence, and around the same time the Birlas also acquired their first permit.
Over the next two decades, the two operators charted their own destiny along with the fast changing landscape of India’s telecommunication.
While Hutchison exited India in 2007, the joint venture between the Birla Group, AT&T and Tata Group (then widely known as ‘Batata’, the name changed to Idea Cellular in 2002) ended in 2006 when the Birlas acquired the Tata stake in the company for ₹4,406 crore. AT&T had already exited the company as part of its plan to move out of non-strategic countries.
The Birlas and Tatas had an uncomfortable partnership that ended in a dispute. At the centre of the dispute was the Tata Group’s decision to enter the telecom space on its own — a move that the Birlas feared could put Batata in jeopardy. The Tatas, on the other hand, wanted to stay invested in the venture with Birla even as it rolled out telecom services under the Tata Tele brand. Officials at Bombay House later admitted that for some time Idea Cellular was only a financial investment for the Tatas. Despite the dispute, the Tatas’ exit was smooth and clean.
Perhaps, the Tatas are ruing their decision now. Tata Teleservices lies in shambles with deep losses and heavy debt. On the other hand, Idea Cellular has now become part of a venture that will become the biggest operator in the country.
Sanjeev Aga, former CEO of Idea Cellular, who oversaw the transition from Batata to the new brand, said: “Back in the 1990s, when the individual companies which later formed Idea Cellular were taking their baby steps, to imagine that one day they would become part of a combination that would connect every third Indian, is numbing and humbling to the procession of team members in this long march.”
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