Govt banks on auction, customer-centric moves for telecom
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The year 2012 began in the lap of 2G scam with Supreme Court cancelling 122 2G licences and continues to reverberate and has taken away focus of foreign investors from it.
Post this judgement, UAE based Etisalat, Bahrain telecom firm Batelco and domestic company Loop Telecom announced to shut down their business in India. Russia's Sistema has warned to seek "billions of dollars" in damages from India if licence cancellation issue of its Indian telecom venture Sistema Shyam is not resolved in time.
Sistema and Russian Ambassador to India, Alexander Kadakin, have said that failure to resolve the SSTL case could threaten India's broader diplomatic interests with Russia.
Industry body Association of Unified Telecom Service Providers of India (AUSPI) whose members SSTL and Tata Teleservices were hit by the apex court judgement said: "This single act threw the industry into total disarray, the impact of which it is still trying to recover from."
The recent spectrum auction, ended on November 14, saw muted response from companies, indicating the damp mood of investors towards India's telecom sector.
The auction attracted combined bids worth Rs 9,407.64 crore only from five players - Vodafone, Idea Cellular, Airtel, Telenor proomoted Telewings and Videocon.
The poor response to the auction was attributed to around 7 times higher spectrum price that government fixed compared to what companies paid in 2008.
This achieved spectrum price was around half of the value of a 3G spectrum slot, Rs 16,750.58 crore, that was put for auction in 2010. It had formed the basis of astronomical loss figure of Rs 1.76 lakh crore projected by Comptroller and Auditor General of India for spectrum allocation in 2008.
Telecom Minister Kapil Sibal in an interview blamed media for sensationalising loss figure projected by CAG and "judgement of a court of cancellation of licences which in turn...destroyed sentiment of the market which in turn lead to the situation that we are in today".
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