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New Delhi:
A day after the Supreme Court's far-reaching judgment cancelling
122 telecom licences issued in 2008, experts said Friday the
larger implications of this will finally lead to clarity in policy
and consolidation in the industry.
"It is a very positive verdict. It has settled the spectrum row
for once and all," said Mahesh Uppal, a noted telecom analyst and
director of consultancy firm Com First India, referring to the
sale of scarce airwaves at throwaway prices that the court found
improper.
"Some operators would definitely be affected but they will have to
accept the verdict," Uppal, told IANS, implying that the eight
companies that currently hold the 122 licences will be impacted
but the road map ahead for the telecom industry will be
unambiguous.
"I'm sure serious players will bid again for spectrum once fresh
auctions are held."
Even Communications Minister Kapil Sibal, at pains Thursday to
explain that the United Progressive Alliance (UPA) government
merely implemented the the previous government's policy, while
coceding that the implementation was wrond, seemed positive.
"The judgement will bring clarity to the situation. It will bring
sanity to the sector and it will bring hope to the sector because
now the roadmap is clear. And we will get large investments," the
minister said.
The Federation of Indian Chambers of Commerce and Industry (Ficci)
highlighted the fact that the Supreme Court had given four months
for existing licensees to function while asking the telecom
watchdog to prepare fresh norms for grant of licences in two
months.
"It is clear the Supreme Court judgment underlines the need for
pro-reform, competitive and market-based process for allocation of
scarce national resources such as spectrum. The uncertainty
currently prevailing in the sector will be eliminated," it said.
"In this new environment, India is expected to invite and attract
large-scale domestic and foreign investment, afresh. This may take
some time. But it is an improvement over an environment that
mirrors uncertainty."
Incidentally, the Supreme Court verdict also comes at a time when
the government has uploaded a draft telecom policy, seeking
observations from all stakeholsders, before unveiling the final
document to replace the existing one that is over 12 years old.
According to Mohammad Chowdhury, executive director,
PricewaterhouseCoopers India, just as the verdict on Videocon
brought clarity on the jurisdiction of the Indian tax authority
over overseas transactions, the one of telecom licences will have
a similar impact.
"Over the last few months the telecom industry has sought clarity
on regulation, policy and fairness on various fronts. We need to
look at how the rights of operators, affected subscribers,
investors and lenders, employees and the eco system will be
safeguarded."
But some of the existing players affected by the order, notably
investors from overseas such as Norway's Telenor, UAE's Etisalat
and Russia's Sistema, were worried over their investment,
especially since they were not the original bidders.
"The Supreme Court decision relates to events that occurred in
January 2008, well before December 2008 when Etisalat invested in
Swan," the company said, adding it was seeking legal counsel.
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