2G Scam: Foreign Telecom Firms Want Indian Government to Clarify Stand

NEW DELHI (NNN-IANS) -- Norwegian firm Telenor Thursday sought a fair deal from the Indian government to protect its investment in the country after the Supreme Court cancelled the license of its joint venture Uninor, while analysts viewed the verdict as a setback for foreign investment in the sector, at least in the short run.

"We look to the government to arrive at a fair outcome that doesn't jeopardize our lawful investment," said Glenn Mandelid, director of communications, Telenor Group.

"We are reviewing the order and will consider necessary actions to safeguard our investment."

The Supreme Court cancelled all 122 licences issued to telecom firms in 2008. However, the apex court has given four months' time to the country's telecom regulator to look into the matter and make recommendations for the fresh auctions.

Mandelid said the Supreme Court's decision should not be inflicted on its investment, as the company's participation in the Indian JV started after 2008 spectrum allocation.

"When we have not caused any of the faults found by the courts, it is obvious to everyone that our investment must not be jeopardized," he said.

Telenor has invested more than Rs.6,100 crore in equity and over Rs.8,000 crore in corporate guarantees as a foreign investor in Uninor.

Uninor on its behalf said it had been unfairly treated, even as it followed the regulatory process to acquire the 2G spectrum.

"We are shocked to see that Uninor is being penalized for faults the court has found in the government process," said a company spokesperson.

The company said the current order by the apex court did not entail Uninor to stop operations.

"We expect the authorities to ensure that our 36 million customers, 17,500 workforce and 22,000 partners are not unjustly affected."

Another telcom operator, Sistema Shyam TeleServices (SSTL), which operates under MTS brand in India, said it would resort to all means under the law to protect its interests.

"The company would like to state that being a law abiding organisation, it reserves the right to protect its interests by using all available judicial remedies."

SSTL is a joint venture between Sistema Joint Stock Financial Corporation of Russia and the Shyam Group of India.

Analysts pointed out that players like Sistema and Etisalat are government-controlled companies and these foreign governments would now be cautious about doing business in India.

And, they said, getting foreign direct investment in the sector could be a bit more challenging for the country, till the policy framework is clarified.

A mass switchover by mobile users is likely in the telecom sector as customers would now plan to port in to different networks following the Supreme Court's order cancelling 122 licences of operators such as Idea Cellular, Uninor, Tata Teleservices, Loop Telecom and Videocon.

The mobile number portability (MNP) service, which had a pan-India launch in January last year, has so far witnessed 29.24 million porting requests from across the country having over 890 million wireless users.

Noted telecom analyst and director of consultancy firm Com First India Mahesh Uppal said MNP will definitely be used as an option by those users who attach huge importance to their numbers.

"Though in India people are not very committed to MNP as in West, it will still be used as an option by those for whom retaining their numbers is very important. MNP would certainly act as a useful aid," Uppal told IANS.

Although the telecom regulator said the move by subscribers is expected to affect barely 5 percent of the total subscriber base, a concerned user would like to go in for another player taking advantage of the MNP service.

"The move is likely to affect less than 5 percent of users as the current operators other than the ones whose licences have been cancelled control almost the rest of the market," Telecom Regulatory Authority of India (TRAI) chairman J.S. Sarma told IANS.

"Customers can always go to the operators of their choice (through MNP)," he added.

Vikramjeet Singh, a 22-year-old user of one of the affected firms, said: "This is shocking news but I am glad that through MNP my mobile services would continue but there is a lot of confusion right now and I hope to get some clarity on this issue."

"As a consumer I am perplexed as to why should a consumer suffer for the faults of telecom operators but I think I have no better option than MNP. I have to retain my number as it is circlulated among all my friends and relatives," 26-year old Shambhavi Shukla, working at a private firm, told IANS. -- NNN-IANS