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The biggest advantage from the Supreme Court's decision will be for the incumbent players as 35 Mhz of spectrum in each circle will be available once the licences are cancelled. Of the 122 licencees, 100 have been given 4.4 Mhz in each circle and the balance 22 belonging to Sistema Shyam has 2.5 Mhz of CDMA spectrum.
This will now be available in the market where remaining players can buy through an auction. Most of the incumbent players have wanted more spectrum to support their growing subscriber base.
“The decision by the Indian Supreme Court ordering the cancellation of 122 second-generation mobile licenses granted in 2008 is likely to fall disproportionately on the smaller operators in the market, strengthening the hand of the largest players - Bharti Airtel, Vodafone and Reliance Communications,” said a Fitch report.
No need for exit policy
The SC ruling has also done away with the need for an exit policy for the new players. The Telecom Ministry had sounded out the Telecom Regulatory Authority of India to prepare a roadmap to allow some of the new players to exit. The proposed Mergers & Acquisition norms may also be irrelevant because as many as 5-6 players will be wiped out from the market as a result of the SC ruling.
“By taking the decision to cancel the licence, the court has helped Government in resolving the complex policy issues arising out of the 2G scam,” said an industry expert.
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