Loop to shut Indian ops, barring Mumbai

Loop Telecom will close down all but its Mumbai operations on 2 June after the Supreme Court cancelled most of its licences and spectrum allocation in January. But its subsidiary Loop Mobile would continue operations in Mumbai, the company stated today.

Loop Telecom promoted by Kiran Khaitan, sister of Essar Group promoters Ravi and Shashi Ruia, who hold a stake of about 33 per cent in established operator Vodafone-Essar. While it will lose its pan-India licences, Loop Mobile's licence is not directly impacted by the apex court's decision.

However, Loop's exit from the national scene will affect only 6,100 customers – less than 0.01 per cent of India's mobile telecom market.

Loop is the third operator to have decided to exit India after the Supreme Court order cancelling 122 telecom licences held by eight operators because of alleged irregularities in the allotment process. Abu Dhabi's Etisalat DB has already said it would close its Indian operations; Bahrain's Batelco, which has a 49 per cent stake in S Tel, has also said it wants to opt out of the Indian telecom market.

Videocon Mobile too may well to exit the telecom market. The group has lost all its licences except in Punjab under the Supreme Court order.

However according to an Economic Times report, Venugopal Dhoot, chairman of the Videocon group, dismissed the exit possibility, saying the company was hopeful of an extension of the deadline until fresh spectrum auctions take place.