The Supreme Court?s (SC) decision to cancel 122 telecom licences as part of the 2G spectrum probe has met with a mixed reaction from the telecom industry. While analysts feel that the verdict will help boost investors? lagging confidence in the space, Kapil Sibal, Minister of Communications and IT, wasted no time in emphasising that the government played a negligible role in the entire issue.
tele.net.in takes a look at the various points of view of the verdict presented by different factions of the industry?
Analyst speak
Close industry watchers remain divided in their opinion of this issue. While some feel that this move would add to the woes of the industry, others feel that the ongoing 2G spectrum issue is drawing to a close, which would bring about much needed respite for the industry.
Jaideep Ghosh, Executive Director, KPMG Advisory Services says, that the SC?s verdict will have a disruptive impact on the industry, as the money and resources the operators had spent on setting up their networks would be lost. ?The decision will also impact both direct and indirect employment generated by these businesses. There is already a lot of uncertainty in the market and this would further negatively impact the sector.?
On the other hand, another close industry watcher feels that the move will help the industry find its feet once again. This is because he feels that by the time the SC takes a final decision, only the most serious amongst the new players will remain standing.
?Etisalat may choose to exit the sector altogether, with its parent company not very satisfied with the Indian experience. Uninor on the other hand has been doing well and it is very difficult to predict what will be the strategy they are going to adopt. Further, the decision is likely to bring down the number of operators, which are already too many by global standards,?
According to several analysts, from the incumbent?s point of view, the SC decision brings challenges only for those whose licencees like Idea and TTSL, whose some licences have been cancelled. However, the SC decision is completely favourable to operators like Bharti airtel and Vodafone India.
Dr Mahesh Uppal, director, ComFirst agrees. He says that the verdict will help whittle down the overcrowded telecom market to the most serious. ?I expect that a few companies like Uninor will participate in the next round of spectrum auctions in the country, while others like Etisalat and Videocon may choose not to. These companies got the licences because they were up for grabs at a bargain rate, not because they were very interested in telecom.?
Government view
Shortly after the SC?s verdict, Kapil Sibal, Minister of Communications and IT, called a press conference to clear the government?s stand on the issue.
Keen to move ahead from the long-pending 2G spectrum case, Sibal emphasised that the Prime Minister of India, Dr Manmohan Singh and P. Chidambaram, former Minister of Finance played no role in the 2G spectrum issue. He held the NDA government?s First Come First Serve Policy accountable for the issue and said that any corporates impacted by the verdict (Telenor and Etisalat) could approach the court for issue resolution.
Meanwhile, industry associations, such as the Cellular Operators Association of India (COAI) also put forward their views. Rajan Mathews, director general, COAI, for example, said that the verdict will have little impact on the end consumer, owing to mobile number portability (MNP).
He said that the operators? licences will be cancelled only after four months, which would give subscribers ample time to switch their operator via MNP.
J.S. Sarma, chairman, the Telecom Regulatory Authority of India (TRAI), too, feels that MNP will help mitigate the impact on the end-customer.
