70 mn telecom subscribers still on sticky wicket

Yesterday’s dismissal by the Supreme Court of the pleas of seven telecom service providers to review its February order cancelling their licences translates into a continuation of the uncertainty for their combined 70-million subscribers.

The government petition for a clarification on the February ruling is yet to be heard; it will be on Friday of the coming week. Meanwhile, much else remains to be cleared.

For instance, Uninor, which loses all its licences, is yet to formally intimate its customers. “I don't think there is a single person in the country who has not read the news about the Supreme Court issue. However, while our licences have been cancelled, we have applied for extension of our services. If and when our application is rejected, our customers can be informed and other measures can be taken. But till that happens, we will continue to function normally,” said Sigve Brekke, managing director.

The company is till gaining subscribers. It added 300,000 on the very weekend of the cancellation and another 2.34 million subscribers in February after the licence cancellation, according to the COAI, the trade body tracking the GSM subscriber base.

Sistema, a competitor in the same boat, has around 16 million subscribers. It, too, is carrying on its business of attracting more. Days after the cancellation, it introduced a plan called Super Zero, offering calls within their network at 0.00043 paisa per second, with a special recharge. Both companies have been among the more aggressive in the newer entrants.

Idea Cellular, whose nine licences are affected, communicated the issue to its consumers in February itself, saying it would take necessary action.

Subscribers would be faced with more doubts if the operators are not allowed to function beyond the date set by the court (June). Recently, the Telecom Regulatory Authority of India said recharge vouchers would not carry a validity period, to simplify rate plans. And, the time frame of existence of the companies is not clear.

“The validity of these recharges is viable only until licences are functional,” said an analyst who refused to be named on the 'sensitive' issue. He said many operators had different contracts and different policies on the issue.

Romal Shetty, head of telecom at KPMG, says not many subscribers would be affected even if the service stops, as India is dominated by prepaid consumers. “Consumers can get another connection very easily and the mobile number is not important to many,” he said. Etislat DB and STel have already made their intentions clear about exiting their business in India.

Meanwhile, the companies are getting their legal armour ready. Uninor is planning a curative petition and according to sources, so is Sistema. Such petitions need the consent of a senior lawyer and the companies are working on that.

“We have only this option now, in the next few days. In this petition, we have brought new evidence and new information that should be considered,” said Brekke. The company has also planned to find a new partner before the re-auction of 2G airwaves.