Cautious after losing their telecom licences due to a Supreme Court judgment, telecom operators such as Uninor and Sistema Shyam Teleservices (SSTL) are not revealing their intentions ahead of the 2G auction which starts from November this year.
None of the players — SSTL, Uninor or Tata Teleservices — confirmed whether they would participate in the auction.
SSTL said in an earlier communication that the company had filed a curative petition before the Supreme Court, seeking re-examination of its verdict. "Since our immediate focus is on the curative petition, hence, it will be premature for us to say anything at this stage about our participation in the spectrum auction."
Videocon is the only player which has confirmed its participation in the auction.
"We see this extension (by Supreme Court) as an opportunity. We are to decide the circles we will focus on. We are comfortable at auction prices below Rs 25,000 crore," said Videocon Chairman and Managing Director Venugopal Dhoot.
Though operators have declined to comment, analysts say the players who lost their licences are likely to go for selective bidding, besides going slow on fresh investments until they have clarity on how aggressive the bids would be.
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“I don’t see how the new players would justify bidding across the country, considering the challenges they are facing now. More, it is a financial decision and will be dependent on how much each operator is willing to spend,” said telecom analyst Mahesh Uppal.
He said in the next few months the primary focus of all the operators would be on the auction. Since they would require finances, investments in operations and staff resources might take a back seat.
Uninor, though, said it would continue to make fresh investments. “We will continue to invest in the nine circles where we are operating. We are not cutting on investments, rather we are making fresh investments in these circles,” a Uninor spokesperson said.
| KEEPING CARDS CLOSE TO THEIR CHEST Where the cancellation-hit operators stand | |||
| Number of subscribers (till July 2012) in million | Number of licences cancelled | Plans for the upcoming auction/business plans till Jan-13 | |
| UNINOR | 44,496,714 | 22 | Didn’t divulge whether they would bid but would continue January 2013 |
| LOOP MOBILE | 2,995,710 | 21 | On the verge of closure |
| ETISALAT | x | 15 + (3 licences of Swan) | Wants to exit |
| VIDEOCON | 5,160,897 | 21 | Would bid if prices below Rs 25,000 cr |
| STEL | x | 6 | Wants to exit |
| SISTEMA SHYAM TELESERVICES | 16,762,238 | 21 | No comment on bidding; continues to launch new offers and products to attract subscribers; recently launched three smartphones |
| IDEA CELULLAR* | 117,620,254 | 9 | No comment on bidding; continues to launch new offers to attract subscribers; recently launched 3G dongle |
| TATA TELESERVICES | 80,000,000* | 3 | No comment on bidding; continues to add subscribers |
| * The subscriber number of all the circles where Tata Teleservices operates, including the ones where licences were cancelled | |||
SSTL launched three smartphones in August, besides new voice and data plans during Onam. Idea Cellular also announced the launch of its 3G dongle after the deadline extension. The Supreme Court this week extended the deadline for auctioning 2G spectrum till January 11 next year, and clarified that the existing licence owners can continue to operate till January 18. According to the earlier judgment, the operators had to shut operations by August 7. The industry association representing GSM operators feels the extension has increased the period of uncertainty.
“There is no assurance these players would be able to win back their licences. The extension by the Supreme Court means the uncertainty period now gets extended till January 2013. This is not good for business. The players will try to conserve cash; some of them had already scaled down operations,” Rajan Mathews, director general of Cellular Association Of India said.
The apex court cancelled 122 telecom licences belonging to eight service providers in February. Operators such as S Tel, Etisalat DB and Loop Telecom have announced shutting down of services and are now helping their users move to other operators.