Go, but don't go: Trai asks STel, Etisalat to restart ops

Should telecom companies asked to wind up their businesses be forced to restart then in the name of consumer interest?

The Telecom Regulatory Authority of India (TRAI) has directed S-Tel and Etisalat DB to resume their mobile services in full within three days in order to ensure continuity of service to telecom subscribers, even as their telecom licences are set to get quashed on 2 June as per a Supreme Court directive.

[caption id=“attachment_273612” align=“alignleft” width=“380” caption=“The two companies had shut services after the Supreme Court cancelled all 122 licences issued by A Raja in January 2008. Reuters”]  [/caption]

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The two companies had shut services after the Supreme Court cancelled all 122 licences issued by A Raja in January 2008.

According to the telecom regulator, the licences have not actually been cancelled by the government, which is the actual licensor, but the Supreme Court. Hence, they cannot terminate their services as long as their licences are still operational, said Trai. The regulator further said a company can surrender its licence by giving notice of at least 60 calendar days in advance and, in that case, it shall also notify its customers about withdrawal of service by sending a 30-day calendar notice to all of them. As per the intimation sent to DoT by both companies, the 60-day period of S Tel and Etisalat ends in the second and third week of May, respectively.

But Trai’s directive to continue operations comes at a time when these telcos have already wound up operations, laid off staff and asked their subscribers to port to other networks. Barring Uninor and Sistema Shyam, most of the other new players are in the process of closing shop.

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Abu Dhabi-based Etisalat had shut down its India operations effective 31 March. The company too had told its over 1.6 million customers to shift to other telecom operators through mobile number portability (MNP). It had operations in 15 circles. But even though Etisalat has almost liquidated its Indian operations, the claims by creditors and allegations by Etisalat’s Indian partners have grown louder. The Bombay High Court has instructed the creditors to come forward with their claims and has served them with a deadline of 16 April, reported CNBC-TV18. It has also instructed Etisalat to not give out any payments until there are further instructions from the Bombay High Court.

Loop Telecom recently announced it was downing shutters. Mumbai circle will, however, be the exception since it is governed by a different licence. The move will impact only 6,100 customers, which is less than 0.01 percent of the number of mobile phone users in India. Loop Telecom has about 150 employees and they have also been told to look for alternatives now that the company has to comply with the SC judgement. The company has also asked the government for a refund of about Rs 3,300 crore as well as unspecified damages.

STel , which had acquired licences to operate in six circles - Orissa, Bihar, Himachal Pradesh, northeast, Assam and Jammu & Kashmir - and has 3.4 million customers, has shut down its networks in all the circles. The firm, a joint venture between Batelco and Sky City Foundation, owned by former Aircel promoter and serial entrepreneur C Sivasankaran, has said it is in the process of a final settlement with associated firms.