Telecom sector assesses what hit it more: case or projected loss
“None of the companies are coming back. Jo hona tha wo pehle ho gaya (what had to happen, happened). This verdict means nothing for the sector.” This is what an analyst tracking the telecom sector said after hearing the verdict in the 2G spectrum case on Thursday.
“This is something of the past and has no bearing on the industry so many years later. Only political dividend can be gained,” another analyst said requesting anonymity.
“The impact of the judgement on the sector is minimal. Most of the impact due to the 2G issue, especially the allocation of spectrum, has already been seen in the marketplace. Players have either left the country or the few residual ones which bought licences – Telenor, Videocon Telecom – are in the process of exiting,” Mahesh Uppal, director at communications consulting firm Com First India, said.
“Just because someone has been acquitted does not mean there was no guilt. You just didn’t have the evidence to prove it,” a sector expert said.
“There will be political impact. It will reopen issues on loss to the exchequer. What is interesting is that the SC and the CBI judge seem to be looking at this issue in contrasting ways. While the issues are not identical, the spirit of the judges seem to be at variance,” Uppal said.
However, going forward, experts believe the sector is unlikely to see any ripples.
“These kind of judgements keep coming,” an official at the Department of Telecommunications said, requesting anonymity. “The government has realised that auction is the best way to allocate a public resource and that will stay,” the official added.
But, an interesting takeaway could be the prices at which spectrum is auctioned going forward.
“Because the case crippled the system and decision making, the auction prices were never curated. Nobody intervened to correct these prices, they are still very high,” an expert said.
The government needs to take a hard look at the spectrum prices so that the investment by companies can actually go into upgrading networks and not into a bidding war, the expert added.
NEW DELHI: