After telco license cancellations: Who's doing what with whom

The fallout of the Supreme Court's decision to scrap 122 2G licenses issued in 2008 is gradually becoming obvious.

FP Staff February 22, 2012 14:45:48 IST
After telco license cancellations: Who's doing what with whom

The fallout of the Supreme Court's decision to scrap 122 2G licenses issued in 2008 is gradually becoming obvious.

In recent weeks, several companies have been giving their reactions to what has happened. At a recent Nasscom conference, Kumar Mangalam Birla, chairman of the Aditya Birla Group expressed 'surprise' at the cancellation of Idea's licenses, which were applied for in 2006. In fact, he later called it a 'rude shock', adding that the company was consulting legal experts on its next course of action.

After telco license cancellations Whos doing what with whom

Reuters

Now, it seems to have made up its mind. It has become the first company to seek a review of the Supreme Court decision, arguing that its license applications had been filed in 2006. Just because the licenses were issued in 2008, they should not be bunched up with other 2G licenses issued that year. On Wednesday, Idea also sought clarification from the Supreme Court with regards to the order.

Not everybody is in fighting mood though. STel, a joint venture between Bahrain Telecom and the Siva Group, is almost ready to shut shop in the six areas it operates in India, Mint reports. Bahrain telecom, or Batelco, had announced the sale of its entire 43 percent stake in its Indian joint venture earlier this month. Faced with a bleak future, Stel has also started advising its customers to switch to other networks.

Employee numbers have also dropped to 100 from 500 earlier. However, a final decision will be taken only after the Telecom Regulatory Authority of India announces new bidding guidelines, the newspaper report said.

Norwegian telecom company Telenor, which had a tie-up with real estate player Unitech, has also ended its relationship with the Indian company and is scouting for a new partner.

It might even float its own company and bid for the new 2G licenses, reports the Indian Express.

Meanwhile, estranged partner Uninor is aggressively going ahead and trying to court customers with cheap call rates, judging from recent television ads.

Sistema Shyam, which owns telecom brand MTS, has also increased advertising spend by 15 percent after the SC judgement, reports the Economic Times. Its plans start from Rs 17 a day to Rs 147 a month and offers free calls and messages to other MTS customers, the report adds.

However, Etisalsat DB, a joint venture between UAE's Etisalat and DB Realty has gone the way of Uninor-Telenor. Etisalat has written off $820 million after the licenses were cancelled and will, in all probability, not renew its operations in India.

Still, a sense of deep uncertainty pervades the industry. Many of the SC-verdict affected companies have urged Trai not to allow incumbents like Airtel and Vodafone to bid in the new telecom license auctions. Clearly, the sector is at a tipping point.

Pretty soon, attention will be back on the telecom regulator to see what it decides.

Updated Date:

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