As many as 73 million telecom subscribers in the country could be caught in the crossfire if there is a delay in the re-auction of 122 licences that the Supreme Court cancelled recently.
The government has argued that the apex court’s February 2 judgment has not stipulated any time-period for the process, even as it prescribed auction as the way to granting new licences and allocation of spectrum (as per the recommendations of the Telecom Regulatory Authority of India).
An efficient auction would take at least 400 days to complete. As a result, there lies a large gap in time between the quashing of the licences. This, according to the court, has to be done in four months, while new licences have to be issued after the auction. The government has said that such a time gap was not in the best interests of the industry as well as the subscribers.
It is based on this view that the government filed a clarificatory petition yesterday in the Supreme court, seeking its opinion on an auction which would take 400 days to be implemented.
While Loop Telecom, Etisalat DB and STel have made their plans clear about quitting the sector, a majority of them is with some new operators like Uninor and Sistema, and old players like Idea and Tata Teleservices. Videocon, too, has 5.4 million subscribers (see table).
“What happens to customers is a very important question,” notes Anand Shanbhag, the head of research at Avendus Securities. “But the basic principle would be to see that customers cannot be deprived of service. They will have to find a way to continue the service, and also abide by the order.”
The companies, too, are not worried. In an earlier interaction, Uninor managing director Sigve Brekke said the company had been in talks with the government over this issue so as to ensure that the service subscribers continued. “If you look at the spirit of the Supreme Court verdict,” another telecom company official said, “the licences will be extended until the auction.”
None of the above-mentioned companies commented on the issue. And most of the firms are pursuing their own legal remedies. Tata Teleservices and Sistema Shyam have filed review petitions to the government. Idea Cellular and Videocon too filed clarificatory petitions.
Analysts, too, agree that services should not be stopped.
If services stop and operators lose customers, new players would not a subscriber base, which they can use a basis to re-bid in the auctions.
“There would be issues of subscriber migration if operations stop without additional spectrum,” said Mritunjay Kapur, managing director of Protiviti Consulting.
