Apr 06, 2013 10:07 AM IST | Source: CNBC-TV18

Operators' duel short-lived; Indian telecom will soar: KPMG

Speaking to CNBC-TV18, Jaideep Ghosh, telecom partner, KPMG says that the apex court’s decision will definitely impact the revenues of Bharti Airtel, Vodafone and Idea Cellular. "But," he adds, "the low penetration levels offer immense opportunity and regulatory clarity could go a long way towards a sustained exploitation of this opportunity."

After Bharti-Airtel and DoT on Friday moved to disconnect the 3G  roaming pacts of Vodafone and Idea. Both companies have been asked to stop offering 3G roaming services in circles where they do not have such spectrum and have also been asked to  pay up a total of Rs 850 crore in fines.

Also Read: India asks Vodafone, Idea to stop 3G pact, imposes fines

Speaking to CNBC-TV18, Jaideep Ghosh, telecom partner, KPMG says that the apex court's decision will definitely impact the revenues of Bharti- Airtel, Vodafone and Idea Cellular. "But," he adds, "the low penetration levels offer immense opportunity and regulatory clarity could go a long way towards a sustained exploitation of this opportunity."

Also Read: 3G roaming pact: Bharti seeks stay on Delhi HC order

Below is the edited transcript of the interview on CNBC-TV18

Q: What would be the probable impact on Bharti Airtel and Vodafone if the Supreme Court were to strike down the 3G roaming pact?

A: It would definitely impact the 3G –service subscribers and revenues of Bharti Airtel, Vodafone and Idea Cellular.

Remember that the battle is to acquire subscribers for 3G services whose penetration is just about 4 percent which is far lower than many other countries like South Africa or Indonesia. So there is huge potential and depending on regulatory clarity, telecom operators will go forward with their strategies to acquire subscribers and enhance data usage.

Q: What will the Supreme Court’s decision mean for the penetration of 3G services? Will the government’s auction be damp squib due to regulatory uncertainty?

A: That is difficult to say because the licences of some of the telecom operators are up for renewal next year and this makes the participation in the auction mandatory if the licences are to be renewed.

However, I agree that regulatory clarity will help all participants in the telecom sector- the regulator, ministry, investors, telecom operators and the subscribers. But low 3G penetration levels offer huge potential and hence something has to happen to increase penetration.

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