Big blow for 2G telcos: TRAI says no need for exit policy

Telecom regulator TRAI has submitted its recommendations to the department of telecom on the exit policy. The regulator has said that there's no need for such a policy, reports CNBC-TV18's Siddharth Zarabi.

In terms of the 122 licenses that stand to be cancelled it's yet another element into what is already a very messy situation. The facts first, essentially the demand for exit policy is a manner in which a telecom company would be able to surrender its licenses and the spectrum to the government and get its entry fee back if nothing else is the real issue.
Loop Telecom, promoted by the Essar Group had not served a formal notice to the government but had written to the Prime Minister and had sought a refund of Rs 16051 crore plus some other money.
The TRAI has today recommended that there is no need for such an exit policy and that there should not be any refund of the entry fee which as per policy for all sorts of telecom licenses in India is non-refundable.
Essentially the way forward will be that if Loop or some other company is keen on this they can now probably look at a legal recourse to insure it. However, it is upto the DoT to accept this recommendation and decide whether there is a justification for a separate exit policy.
It is likely that the DoT will not provide any sort of exit policy because there is a big sword which is hanging on everybody’s head as far as the 122 companies are concerned and that comes up on the June 2 when they will have to switch off their networks unless the Supreme Court relents.