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Cos losing interest in 2G race(Times of India, The (KRT) Via Acquire Media NewsEdge) Jun. 25--NEW DELHI -- The DoT is working overtime to process applications for telecom licences in 2G that were received between September 26 and October 1, 2007, but this time, it may not find too many takers. DoT, which received 575 applications from 46 firms, had earlier only processed applications received till September 25, 2007, giving licenses worth Rs 6,000 to 8,000 crore for mere Rs 1,651 crore on first-come-first-served basis. This had created a stampede at Sanchar Bhawan with executives from companies physically battling each other to get ahead in the queue to make payments. Since then, DoT has been under the Central Vigilance Commission (CVC), finance ministry and PMO lens for squandering exchequer revenue by walking away from the more lucrative auction route for allocation of 2G spectrum. But by now, many companies with pending applications are learnt to have lost interest in the spectrum race. New applicants are miffed that 5 months after LoIs were issued on January 10, of 22 circles, DoT has barely managed to award spectrum for 5 circles Kerala, Tamil Nadu, Orissa, Andhra Pradesh and Assam. Worse, remaining spectrum may still not be available for another 2 to 4 months. This threatens to take the entire 2G allocation to the end of 2008, by when India is expected to reach roughly 350 million mobile subscribers. Considering the uncertainty over spectrum, even existing license holders are unable to place equipment orders in spite of being in possession of nationwide UASL licenses. Some applicants have also indicated that an allocation of 2G spectrum by end 2008 followed by launch of service by end of 2009 does not allow them to mount any credible challenge to existing operators, which severely weakens their business case. The uncertainty on when and how much spectrum will be available, coupled with the deep shadow of the CVC investigation and pending court cases, is giving the remaining applicants cold feet. "We do not expect more than one or two firms to pay for new licences", said industry confidante. Experts also point out India already has 12 to 14 operators per circle more than anywhere else in the world. Any more competition in the 2G space with a meager 4.4 MHz start up spectrum and no assurance of future allocation is certainly a deterrent for remaining applicants, they say. "The idea of more competition is a bogey. India will eventually settle at just about 7 to 8 operators", says telecom consultant Mahesh Uppal. This implies that many of new licence holders already face the threat of being gobbled up through a consolidation process. This is hardly a scenario that more companies would like to jump into. To see more of The Times of India, or to subscribe to the newspaper, go to http://timesofindia.indiatimes.com Copyright (c) 2008, The Times of India Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |