New telecom operators are facing heavy losses due to the delay in deciding the rules for auctioning 2G spectrum.
While Videocon is losing Rs 5 core a day, Sistema Shyam said it was getting poorer by Rs 7.5 crore for each day till the auction happens. Other players, such as Uninor, which are still in business, are also disappointed with the delays in decision making, especially since none of the operators are cash positive.
Longer uncertainty
“We remain dependant on Telenor as our shareholder to keep funding us each month to keep operations going. Longer uncertainty places Telenor in a difficult situation,” said a Uninor spokesperson.
Sistema Shyam said that patience of its investors is running out. The company, majority owned by Russia’s Sistema, has already written off $700 million on the Indian investments.
These players are peeved that the Government is not being able to take a decision even though the Supreme Court has ordered to cancel all licences issues on or after January 10, 2008. The Empowered Group of Ministers was supposed to have taken a decision on the reserve price on Thursday but did not even meet.
Government sources said the Finance Minister, Mr Pranab Mukherjee, who is also heading the eGoM, was not comfortable taking a decision on the controversial issue with just few days left for him to file his nomination for the Presidential race.
Earlier, the Officer on Special Duty to the Finance Minister had sought clarity on whether it would be appropriate for Mr Mukherjee to head the GoM since his nomination has already been announced.
In response, the Prime Minister’s Office had taken a view that a decision should be arrived at before Mr Mukherjee exits. Despite the direction from PMO, Mr Mukherjee decided to play it safe and has left it to his successor to take a decision.
Delaying auction process
This could now delay the auction process by a few weeks raising doubts about whether the Government will be able to meet the deadline set by the Supreme Court. The apex court had directed auctions to be held by August 31 and cancel all 2G licences issued on or after January 10, 2008 by September 7.