Devas rightly threatens to sue the Government

The communications and multimedia media company Devas which entered into a deal for 70 Mhz's of the S-band spectrum has now again threatened that it will take strong, including legal action to protect its deal with ISRO. On a day when Mr. Prime Minister ManMohan Singh has already admitted to making several mistakes in governing this country including giving into its coalition ally's just so the Government can stay in power and then has been severely thrashed both by the BJP's Nitin Gadkari and the Left's Prakash Karrat for a whole range of things, this comes as yet another hard hard blow to which this Government is all hands down and chin up. It would have been K.O if elections were just around the corner but fortunately for UPA, there's time. What is interesting in this one is that Ramachandran Viswanathan the CEO of Devas had about a few weeks ago in an interview with Timesnow's editor in chief Arnab Goswami had said that since they (Devas) had not received any communication from the Government about the termination of the deal, as far as Devas is concerned, the deal was on but when Arnab had asked him about going to court over the deal, he had skipped the question. This time however, the CEO of Devas has taken kiddy gloves of and issued this aggressive threat. What one feels naturally is that this Government is in a bunker one way or another with the ISRO S-band deal just as it is with its 2G deal. The incredible thing really is that because the deal has already been signed and there is no prima facie evidence of any wrong doing on the part of Devas at least, (not yet anyway) they do have a contract which is legally binding and if the Government now chooses to cancel the deal, Devas has every right to take the Government to court over it.



In such a scenario, the Government loses even more face than what it has already lost. People will then probably sympathize with Devas (I already do) and feel that these guys are the latest in a long list of people who suffer because of the absolute incompetence and/or corruption prevalent in our system. Think about it, here are a bunch of people who have put a project together, made the investments in infrastructure (Rs 1000 crore may be a little less for this particular resource but still the sum is not paltry by any standards) and human capital and now if the deal is scraped then they (Devas) will go under, there's absolutely no doubt about it. The other point is that in the case of 2G where many companies wanted access to the spectrum on offer and therefore by the simple logic of demand and supply, the spectrum to be sold had a value many times over of what it was sold for. This revenue could only have been made by auctioning the spectrum. In the case of the S-band spectrum however there weren't any takers for the S-band spectrum in 2005 - remember that this was at least half a decade before the launch of the Indian Satellite in space. So, while the decision of the Government and ISRO/ANTRIX to sell off the S-band spectrum in such haste and so early may be perplexing and doesn't seem right, Devas at least can not be blamed for anything here other than being smart. The other question of course is that how did ISRO arrive at the figure of 1000 crore Rs? As I said earlier, its not peanuts and may have looked trim and proper in 2005 but in hindsight in 2011, the figure seems, well... a bit low. A look at all the commercial applications of the S-band spectrum and the size of the market for those applications should definitely reveal that it's not too low.

Coming back to Devas, we need to remember that early movers and pioneers in any business have an advantage over those who come in late and quite rightly so! Take the example of dealings at a personal level one which is miniscule in comparison with all these big budget dealings:

Can you accuse a person of shady and unfair doings if he invested say Rs 3 crores in the property markets in developing new parts like Vashi, Mira Road, Noida etc of cities like Mumbai and Delhi 12-14 years ago and now sold these assets for many times the price he paid for them? I am guessing you can not, since it is quite fair and some of you yourself might have done it. Another example is of the early birds who invested in the shares of companies like Reliance, Google, Microsoft, Facebook, Satyam, Wipro etc when these companies had newly started out and not become the big names that they have become today, the people who invested in such companies early all made a killing and they deserved it. There is no possible argument against this, early movers in any niche or market always benefit and so they must. If now, the Government denies Devas its fair rights to use the S-band commercially and we through any sort of mongering, support it then according to me, we're still a very very immature people. 

The good news though is that Devas it seems understands all of this and has decided to fight the injustice the government now wants to do with it, I for one hope Devas wins this one. The only face saver for all involved that I see is that the Government cum ISRO/ANTRIX gang ask for a higher price revised as per fresh considerations and that Devas would graciously accept it. This can be the only happy ending to this whole S-band spectrum affair.