How 2G verdict affects you

Feb 03, 2012, 06:57 IST | Vinod Kumar Menon

Telecom companies whose licences were cancelled cater to only 59 lakh Mumbaikars; experts say number portability will save the day for customers

Telecom companies whose licences were cancelled cater to only 59 lakh Mumbaikars; experts say number portability will save the day for customers

As licences granted to telecom companies after 2008 were cancelled in a judgement delivered by the Supreme Court yesterday, telecom experts say customers won't be affected by the landmark verdict. Since firms have been given four months to stop operations, experts feel that it allows subscribers sufficient time to move to another service provider. 

No worries: Experts says that with the four-month window period, 
the order won't have an immediate impact on the tariffs. 
Pic/Atul Kamble

The migration from one service provider can be done through the Mobile number portability (MNP), which is common in the country. Moreover telecom analysts say that the 85-page order won't substantially affect the telecom industry as companies, whose licences have been cancelled, cater to a mere 5 per cent of 
the total 900 million cellular industry.

As per the statistical data available with Cellular Operators Association of India (December 2011) some of the service providers whose licences were cancelled have a niche market in Mumbai. Loop has 32.30 lakh subscribers, Uninor 13.26 lakh followed by Videocon that has 9 lakh and Etisalat 4 lakh.

"With the four month window period, the order won't have an immediate impact on the tariffs too. Also these cellular companies (whose licences were cancelled) cater to a very small percentage of the entire cellular market," Rajan Mathews, director general, Cellular Operators Association Of India.

Mathew added, "The one positive aspect out of this order is that hereafter spectrum would be allocated and priced purely based on the open market auction process instead of the first-come-first-served method which resulted in the 2G scam. The new system would bring in more transparency and competitiveness among the existing and future players."  

The operators whose licences are to be cancelled in various circles include Tata Teleservices that has to forego 3 licences; Swan 13 licences; Loop Telecom 21 licences; Sistema Shyam (MTS) 21 licences; Videocon 21 licences; Etisalat 15 licences and Uninor 22 licences.

S C Saxena, Director of Association of Competitive Telecom Operators (ACTO) shared similar views, he said, "With an average of around 10 to 15 lakh new connections every month, the order may not have an immediate impact. It also gives an option to those companies whose licences have been cancelled to take part in the auction again and regularise their system."

Vijay Mukhi, cyber security expert said,  "Customers don't have to worry at all because of number portability. They can move to any other telecom service provider. But, TRAI should consider the interest of investors and stake holders before formulating a new policy, as demanded by the apex court."

The verdict
A two-judge bench comprising of Justice AK Ganguly, who retired yesterday, and Justice GS Singhvi gave the verdict allowing the challenged licences to continue for the next four months after which the cancellation order will become operational. It also ordered that the licences in 22 circles be sold by auction for which the TRAI will make fresh recommendations. But the order does not affect firms that were granted licences before 2008. Also 3G services, which were auctioned earlier, would not be affected.

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