The Telecom Regulatory Authority of India (Trai) on Thursday said only less than 5 per cent users will be affected by the
Supreme Court's verdict in the 2G spectrum scam - cancelling 122 licences granted under
A Raja's tenure as telecom minister.
"...the current operators, other than the ones whose licenses have been cancelled, control almost the rest of the market," Trai chairman J.S. Sarma said.
Among players that have been ordered to cease operations are
Idea Cellular, Uninor, Tata Teleservices, Loop Telecom and Videocon.
Sarma said customers with these companies need not worry as they have an option to
switch operators through mobile number portability (MNP) - a service which allows customers to switch operators without changing their numbers.
The Supreme Court
has given four months time to the companies whose licenses have been cancelled to cease operations, allowing ample time for an arrangement to shift users to another service provider.
Meanwhile, analysts say the SC verdict will result in consolidation by existing players and freeing of pricing power to the incumbent players.
"The Supreme Court's decision is positive to for the sector on the whole and there is bound to be consolidation as some of the players may not go in for the auction route stipulated by the apex court," Ankita Somani, research analyst (Telecom) with Angel Broking, told IANS.
There are 14 telecom players in the country.
Another analyst, preferring anonymity, said: "Consolidation is bound to happen as some of the existing players may not participate in the auctions. The existing players may now be able to revise upward their rates. There were not able to do so due to the competition."
He said the established players like Bharti, Vodafone and others, who did not get the specturum in 2008, are now better positioned as compared to the new players.
The court judgement would set right many of the policy and structural issues so that the serious players in the sector as a whole can move forward.
"The unused spectrum would now come back into the system and the scarce resource would be put to efficient use," he added.
It would be interesting to note whether the government would be able to raise huge sum from spectrum auctioning.
The Comptroller and Auditor General (CAG) had estimated the loss to the exchequer under the
old sale price at Rs 1.76 lakh crore.
"It all depends on the number of bidders and the kind of money they are willing to pump in," a Mumbai based analyst told IANS on condition of anonymity.
Analysts are also of the view that the Supreme Court judgement would also have its impact on the mobile telephony tower companies and the equipment vendors.
"The new development may be positive for independent tower companies. But the issue has to be studied," Somani added.
With inputs from IANS
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