Regulator in the muddle

J.S. Sarma, the low profile 61-year-old Chairman of the Telecom Regulatory Authority of India (TRAI), was a much-talked about man last fortnight, thanks to the controversy surrounding the recommendations of TRAI on issues like 2G spectrum pricing with 3G bids, spectrum capping and M&A guidelines.

Sarma, of course, is no stranger to controversy. His appointment as TRAI Chairman in May 2009 had raised plenty of eyebrows given the clear conflict of interest—he is ruling on decisions which sometimes he took as Secretary, Department of Telecommunications, in 2005-06. But, for the media-shy Sarma, the intense scrutiny of his actions must be unsettling.

In fact, everytime he makes a pronouncement, he seems to drastically impact stock prices. Consider this: Early in October 2009, Sarma blurted out to a pink daily that he would look to officially mandate 'per-second' billing. Concerns on operator revenues drove prices of listed telcos down by a little under 10 per cent in a couple of trading sessions.

Sarma scrambled to partially deny the statement attributed to him but most telcos still adopted a 'per-second' plan for pre-paid users within weeks! Sarma, though, should know a thing or two about handling disagreements.

Before taking over as TRAI Chairman, he was a member of the Telecom Disputes Settlement Appellate Tribunal (TDSAT). An IAS officer of the 1971 batch, he'll need every bit of experience to sort out the current mess.