By Telecom Lead Team: Industry analysts shared mixed response to the Supreme
Court order for cancelling 122 telecom licenses in India.
This
verdict is good news for established incumbent operators and in short term we
are likely to see some increase in tariffs. As in the case of 3G licenses, the
auction route may jack up the initial capex investment, which in turn may lead
to increased cost for telecom services,” said Benoy C S, director, ICT
Practice, Frost & Sullivan, South Asia & Middle East.
From
a long term perspective it is going to help Telecom industry as a whole. It
will open up the opportunities for some global telecom companies who missed the
race earlier to invest in Indian telecom industry. We will see entry of some
mature MNC service providers which will bring in a healthy competition and
better quality of service,” Benoy added.
The Supreme Court judgment on 2G spectrum licences granted in 2008 seems to
suggest that government policymakers are required to revise their policy
framework with retrospective effect. This could shake investor confidence in
India and drive away precious capital and management expertise.
It may take
more than the New Telecom Policy 2012 to reassure investors. It may also call
into question, the capacity of India as a nation to develop and implement
transparent, forward looking policy and governance frameworks.
This could mean that investors may shy away from other priority
sectors such as roads and highways, energy and power utilities,” said CyberMedia
Research Lead Telecoms Analyst Naveen Mishra.
Secondly,
telecom operators who conformed to the policy guidelines of the day for
allocation of 2G spectrum licences in 2008 are expected to challenge the
judgment. Telcos who followed the laid down rules and won 2G spectrum licences
as per the prescribed norms, can question the government’s right to levy
additional fee by way of the Supreme Court prescribed auction route.
More
importantly, the Indian telecom services market currently is not exactly in the
pink of health. The industry may be in no mood to pump in more funds into an
already volatile telecom marketplace,” Mishra added.
It is
important for the concerned stakeholders – DoT, TRAI and the telecom
service providers to sit together and construct a feasible and robust
new policy, which not only passes legal scrutiny, but also helps to safeguard
the long term interests of consumers, government and operators.
