In a bid to enable some of the beleaguered new operators caught in the 2G scam investigation to surrender their licences, the Department of Telecom will ask the telecom regulator to suggest terms and conditions for an exit policy.
“We will ask telecom regulator to initiate consultation process and seek industry and public views on the subject,” the Communications and IT Minister, Mr Kapil Sibal, said here at a press conference.
Various options
The DoT has been looking at various options to weed out some of the new operators, especially those who have missed roll-out obligations. Earlier, the DoT was considering asking the new operators to pay a huge penalty if they wanted to continue to hold the licences issued to them in 2008. However, the Telecom Regulatory Authority of India has suggested that 74 licences should be cancelled because they have not met the roll-out obligations. The operators named by the TRAI include Etisalat DB, Loop Mobile, Shyam Sistema and Aircel.
But the DoT is not in favour of cancelling these licences fearing legal action by the operators. Therefore, the Department is now looking at offering an exit route to some of these players that may want to give up their licences voluntarily.
When contacted some of these operators told Business Line that the terms of the surrender will be crucial. For example, Loop Mobile has already offered to give back the 21 licences it got in 2008 but it wants the Government to refund the entire entry fee. But not all are interested in exiting despite the 2G investigations. Shyam Sistema and Uninor have repeatedly said that they are long-terms players.
“The exit option makes sense to only those operators that have not made huge investments into rolling out their networks. New operators that have not yet got any foreign investors may also take the opportunity if they get back major part of the entry fee,” said a market watcher.
M&A rules
Analysts said that the DoT would be better off relaxing the merger and acquisition norms than giving an exit route. “The DoT should relax the M&A rules which will enable larger players to acquire the new ones. This way the new players will also get some value for their investments,” said an analyst.
If some of the operators do take the DoT offer, whenever it is finalised, it will free up much-wanted 2G spectrum. TRAI has estimated that as much as 200 Mhz of 2G spectrum will be available if the DoT cancels the 74 licences which missed roll-out obligations.