SC ruling paves way for consolidation of telecom sector

Established operators in the telecom segment like Vodafone Essar, Bharti Airtel, and Reliance Communications seem to have seen the opportunity presented by the Supreme Court's market-shaking verdict on Thursday cancelling the licences of newer operators.

Within hours of the ruling that cancels all 122 spectrum allocations and operating licences granted since January 2008, Vodafone ran front-page newspaper ads inviting users of rival networks to sign up for its services without having to change their phone numbers - an offer that has become possible after the introduction of mobile number portability (MNP) that has lately become available in India.

Established players like Vodafone, the world's largest carrier by revenue and the second-biggest in India after Bharti Airtel, along with Aircel and Reliance Communications, are seen as likely beneficiaries of the decision - particularly since several licences of Idea Cellular, their biggest rival, are among those cancelled.

Norway's Telenor, which runs its India services under the Uninor brand in partnership with realty major Unitech Ltd and is among the most active new entrants, told Reuters on Thursday it may pull out of India.

Uninor now has 36 million subscribers in India. However, the Telenor-Unitech partnership has been on the rocks for some time now over issues apart from spectrum.
 
Telenor's Indian operations reacted strongly to the Reuters report. ''Telenor Group wants to be clear that Uninor operations are continuing. Our intention is to fight to protect our lawful investments in the country. We are looking to the government to arrive at a fair solution. We expect that the intention remains of bringing new competition to India,'' the company clarified in a statement released this afternoon.

''The Norwegian government has announced that they are monitoring the situation and will actively contribute to find solutions to secure Telenor's investments and presence in India,'' the statement added.