Telcos want interference on their lines to be fixed

The post of minister for communications and IT is highly prized among India's politicians: it has enormous scope for filling party coffers and personal bank accounts with giant kickbacks.

Indeed, the last minister, the DMK's A Raja, took this to such an extreme that Indian prime minister Manmohan Singh last week refused to reappoint him, and the DMK party threatened to leave the ruling coalition in retaliation.

The $11.1 billion (£7 billion) Vodafone spent buying a 67% stake in Vodafone Essar in 2007 is certainly providing the growth it promised: in the first three months of this year, India provided 6.3 million of Vodafone's seven million new customers worldwide.  

When you talk to the Vodafone executives working on the ground, though, you quickly realise that it hasn't been at all easy. And Raja was one of the main reasons why.

In India, mobile phone operators are supposed to be awarded extra radio spectrum as the number of customers they have in different areas passes certain landmarks. That's only if there's spare spectrum to give them, though. Under Raja, there hasn't been.

Established operators such as Vodafone and Bharti Airtel have been struggling to keep calls at an acceptable quality in cities like Mumbai, Delhi and Bangalore, while Raja has doled out the spectrum they so desperately need to new entrants.  

He bent the rules to give Reliance Communications a pan-India GSM licence, and then gave licences to eight new entrants, who each paid just £200 million for their spectrum. When two of them did deals that valued those same airwaves at more than £1 billion, there was outrage but Raja stayed on.

So one of the boons from India's unexpectedly strong new government may be an easier ride for Vodafone. But yesterday, Pieters had a nasty surprise. Congress and DMK have fudged a deal and Raja is back. Talk about brinkmanhsip!

*This is the week that Tata Motors' $3 billion bridging loan for its Jaguar Land Rover acquisition is due, and $1.1 billion of it has still to be refinanced. It's almost certain that the banks will roll the loan over, but that's only because India's government stepped in and got the State Bank of India to guarantee last week's $885 million bond issue. For a company renowned in India for prudence, Tata has been driving rather close to the edge.