Telecom judgement paves way for policy clarity: Experts

February 3rd, 2012 - 1:56 pm ICT by IANS  

New Delhi, Feb 3 (IANS) 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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