Ruling ends spectrum row for once and all: Experts

February 2nd, 2012 - 8:31 pm ICT by IANS  

KPMG New Delhi, Feb 2 (IANS) The Supreme Court’s order cancelling 122 licences given out in 2008 settles the spectrum row for once and all, although it brings bad news to the affected operators, analysts said Thursday.

“It is a very positive verdict and has settled the spectrum row for once and all. Some operators would definitely be affected but they will have to accept the verdict,” Mahesh Uppal, telecom analyst and director of consultancy firm Com First India told IANS.

Speaking on the massive investments made by the affected players on infrastructure, Uppal said: “I am sure serious players would bid again for the spectrum once the government conducts fresh auction.”

According to consultancy firm Deloitte Haskins and Sells, though the judgement is likely to build a slight uncertain environment for investors it would put enough pressure on the government to end the spectrum issue in four months.

“The foreign investors are likely to adopt cautious approach while taking investment decision. The issues which arise from verdict unless resolved quickly will create lot of uncertainty which could again have negative impact on foreign investment in India,” said Hemant Joshi, Partner, Deloitte Haskins and Sells.

“But there is a silver lining, it would put pressure on the government to close this matter within 4 months and once this is resolved, operators can look forward to stable policy,” he added.

Speaking on the benefits to the incumbent operators, Jaideep Ghosh, communications director of global consultancy firm KPMG, told IANS: “This would lead to a massive benefit to the established players as the millions of users who will be left unserviced will suddenly have to go somewhere.”

However, he said, the infrastructure players will be badly affected as the market will shrink for them.

Advisory firm Frost & Sullivan said the move is also likely to result in higher tariffs.

“This verdict is good news for established incumbent operators and in short term we are likely to see some increase in tariffs,” 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.”

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