By Telecom Lead Team:Despite the 2G
license cancellations, there may not be a huge disruption in telecom services
as the number of licenses granted post 2008 make up only 5 percent of the
subscriber base in India. Currently, India has 894 million mobile subscribers.

 

The Supreme
Court ruling said the current licenses will remain in place for four months, in
which time the government should decide fresh norms for issuing licenses.

 

The court
asked telecom regulator TRAI to make fresh recommendation on grant of 2G
licences and allocation of spectrum will be done through auction within four
months.

In 2008, the government received over Rs 9,000 crore for 122 licences, while 3G
auctions fetched Rs 69,000 crore. 

 

The telecom ministry issued 122 licences in January 2008 on
first-come first-serve basis to Uninor who got 22 pan India licences, Loop 21,
Sistema-Shyam (MTS India) 21, Etisalat-DB 15, S Tel 6, Videocon 21, Idea
Cellular 9 and Tata Teleservices 3.

 

The apex court
stated that all the licenses were granted in arbitrary and unconstitutional
manner and asked telecom firms to deposit bank guarantees.

 

Presently,India’s third biggest service provider Idea Cellular, which lost 9 licenses in the
SC judgment, has 106,380,111 subscribers nationwide, which is 16.63 percent of
the total market share.

 

Among other
license losers, Uninor’s market share is 5.68 percent with 36,306,865
subscribers and Videocon’s market share is 0.85 percent with 5,442,883
subscribers.

 

S Tel has a
market share of 0.55 percent with 3,549,381 users. Loop Mobile has 3,236,381
subscribers with 0.51 percent market share. Etisalat’s market share is 0.26
percent with 1,670,086 subscribers.

 

MTS India has
around 15.01 million subscribers and Tata Teleservices has 83.49 million
subscribers.

 

Howeer,
this apex court decision will have a major impact on the telecom investment
scenario in India. Mobile users are unlikely to affect since most of the new
licences holders have insignificant market share in the Indian telecom market.

 

Uninor, Loop, MTS, Etisalat, S Tel, Videocon, Idea, TTSL to
face music

 

If TRAI goes ahead with
fresh 2G license auctions in the next 4 months, these operators may / may not
get spectrum. Plus, there will be further delay in telecom investment in India.
The SC order has the potential to affect investment sentiment in the country.

 

 

By Danish Khan
[email protected]