To participate in next round of spectrum auction
More than two million mobile subscribers and 300 workers will get impacted with Sistema Shyam deciding to close down operations in 10 circles.
Sistema Shyam, which operates CDMA technology based mobile services under the MTS brand, said it has been forced to take this move due to the uncertainties resulting from the Supreme Court’s decision to cancel licences given in 2008.
The company said that it has informed its subscribers in the 10 circles to use up balance amount on pre-paid cards over the next 30 days.
The company, backed by Russia’s Sistema, has told its customers in Assam, Andhra Pradesh, Bihar, Himachal Pradesh, Haryana, Jammu & Kashmir, Madhya Pradesh, North-East, Orissa and Punjab to port out to other telecom operators. To use number porting facility subscribers need to SMS PORT<space>Mobile Number to 1900.
Sistema Shyam will immediately provide with an 8 digit alpha-numeric porting code that needs to be given to the operator the consumer wishes to shift along with relevant documents.
Currently, Sistema Shyam operates in 22 circles of which licences for 21 circles have been cancelled. Consumers in Rajasthan are not affected at all. In 11 circles, the operator will continue its services provided it manages to win back spectrum in the next round of auction in March.
Vsevolod Rozanov, President and CEO, Sistema Shyam TeleServices, said the 10 circles have been picked based on the levels of competition and spectrum pricing. “The intent is to now look at life beyond all the uncertainties. The go forward plan includes continuing with the company’s focus on its data centric-voice enabled strategy in select circles,” Rozanov said.
The company said that efforts are being made to absorb maximum number of employees in other circles. In addition, some of the employees may also be placed in other companies.
Earlier, Telenor-owned Uninor had announced its decision to close operations across the country except in 6 circles where it won spectrum in the auctions conducted in November.
Market watchers said that consumers of affected 2G operators have been able to shift to another operator smoothly through number portability.
“Though there have been instances of consumers finding it tough to move through mobile number portability in general, in this case the operator which currently owns the subscriber has no choice but to allow porting. Hence, the process is rather hassle free,” said Rajeev Ghosal, running a Mumbai based consumer group. The closure by the new 2G players has benefited the incumbent players the most. The combined market shares of Vodafone, Airtel and Idea have moved up to over 60 per cent over the last year. These operators have been advertising aggressively to woo subscribers of the 2G players who are in the process of shutting shop.
“Our networks are more than capable of taking on board the subscribers of operators which are closing operations. We will ensure seamless connectivity to any user who approaches us for porting,” said an Airtel executive. Incumbent operators have been weeding out non-playing subscribers from their network over the last six months.
Over 70 million inactive users have been ejected out of the network which frees up capacity to take on the new subscribers from the likes of Sistema Shyam and Telenor.