Four years and investments worth billions of dollars later, new 2G players find themselves in a difficult situation with the Supreme Court ordering cancelling the licences. These players do not have too many options left except file a review petition with the apex court or buy back the same spectrum through the proposed auction.

The worst hit is Uninor and Shyam Sistema, the two operators which were seriously rolling out services and had managed to get some traction in the market. “We are shocked to see that Uninor is being penalised for faults the court has found in the Government process,” said Uninor, which now has 36 million customers and 17,500 workforce.  Uninor said that it will explore all options available to ensure that it continues to operate in India.

Sistema Shyam, in which the Russian Government has invested $600 million, said that it reserves the right to protect its interests by using all available judicial remedies. Sistema Shyam offers CDMA-based services under the MTS brand and has 15 million subscribers and about 3500 employees.

UAE-based Etisalat sought to put the blame on its Indian partner DB Realty. “Etisalat has no knowledge of what occurred in the licence application process for Swan, far less did it have any involvement. The licence applications were entirely conducted by the promoters and their associates who subsequently marketed the Swan investment opportunity to Etisalat through a well known international investment bank,” it said.

Sivasankaran-backed STel said that it felt like a victim caught in a riot. “It was STel that highlighted the arbitrariness in allotting licences. We have followed all procedures and processes as laid out and we are also the only new operator to invest in 3G licences,” the company said.

The six new operators which got licences in 2008 hold 29 per cent of the country's spectrum, but account for merely 8.5 per cent of the total subscriber base, and 3.5 per cent of industry mobile revenue.

tkt@thehindu.co.in

Related Topics
comment COMMENT NOW