Cell firms cautious, basic operators exult

Sunil Mittal, chairman and managing director, Bharti Enterprises said, " I would not like to comment on the unified licence since the terms are not clear. Other decisions were long overdue and is certainly in the right direction. The decision to allow intra-circle mergers would give more exit option even as it helps the industry to consolidate. The increase in FDI would bring in the much needed funds to the cash strapped telecom sector."

Of the six decisions announced today most were in favour of the cellular operators. The hike in FDI norms would enable cellular companies like Escotel, which has been scouting for a foreign partner for over two years, to find an investor.

It would also benefit mobile operators like Bharti and Essar-Hutchison which has significant amount of foreign investors. Cellular firms also gain from the decision to allow intra-circle mergers. Until now mergers between companies were allowed only of they were operating in different circles which prevented large companies to widen their operations.

However the three conditions imposed for such a merger could dampen the possibilities. The other major gain for mobile operators was from the decision to allocate more spectrum as most mobile operators have been complaining of service being affected due to low amount of radio frequency.

Cellular operators however said that these decisions were expected and it was awaiting more clarity on GoM's views on the critical issue of unified licence. "I don't understand what the proposal on unified licensing means, but the devil is in the details." said a Hutch spokesperson.

Taking an opposing view S C Khanna of the Association of Basic Telecom Operators said, "the proposal for unifying licence is the best thing for the sector. Allocation of addition spectrum will also help basic operators as they are moving from offering wireline services to wireless services."