The Future Of Telecom- End Of Call

The future of telecom belongs to large players. Smaller ones have already started packing their bags.

- Manu Kaushik

In a meeting last September, Arvind Bali, CEO of telecom operator Videocon Telecom, told Business Today: “We have to run this business for the long term.” His confidence was understandable, given that the government was about to announce trading and sharing norms for telecom spectrum. Such norms would allow telecom players – not just Videocon, but others as well – to transfer their idle spectrum to other service providers who are facing a spectrum crunch, or pool spectrum to bring together their fragmented spectrum holdings, resulting in better spectral efficiency. It was something Videocon Telecom was looking forward to. In October, the government announced the guidelines. In the November 2012 spectrum auction, the company had regained spectrum in six circles – after losing most of the 18 circles it held earlier when the Supreme Court famously cancelled 122 licences given in 2008 by the then telecom minister A. Raja – and had plans to launch 4G services there, but the market was not fully ready. So, like other telcos, it had been waiting for trading and sharing norms to come into force. “We are in discussion with three large operators...we will start with [spectrum] sharing,” Bali had said.

However, last November, Videocon sold its spectrum in two circles to Idea Cellular before scrapping the move and finalising a `4,428-crore deal with Bharti Airtel for its spectrum in six circles. It earned a hefty profit, given that the spectrum was bought at just `2,221 crore. Videocon Telecom refused to participate in this story, but a senior executive of the company said it no longer has an India strategy: “We are left with just Punjab circle.”