2G verdict: How will it impact telecom sector?
analysts comments after the Supreme Court revoked 122 telecoms licences issued under a scandal-tainted 2008 sale in a judgement that could further darken the business climate in Asia's third-largest economy.
February 02, 2012 / 15:44 IST
Following are analysts comments after the Supreme Court revoked 122 telecoms licences issued under a scandal-tainted 2008 sale in a judgement that could further darken the business climate in Asia's third-largest economy.
Kamlesh Bhatia, Research Director, Gartner"This is one step closer to transparency in policy-making. This decision will lead to some of the weaker players moving out of the business, and the market would be left with only serious and financially strong players. The foreign players will not really take this favourably, for obvious reasons, but I think the attempt is to bring in some level of transparency in decision and policy-making."Jaideep Ghosh, Partner at KPMG "This bring in more uncertainty into the sector, which has already been battling with many issues. In the near term, this will impact the sector's business and the ecosystem. This also has implications on foreign investments."For large incumbents like Bharti Airtel and Vodafone, the verdict is kind of neutral to positive. This may help them acquire new customers as well as extra spectrum, which has always been an issue for the sector."Rishi Sahai, Director at Consultancy Firm Cogence Advisors "For foreign investors, it is a very bad news. What mistake did they do? They partnered with Indian companies, invested lots of money and followed the process of that time."The natural consolidation that one would have expected to happen in the sector, which would have weeded out the weak players, is out of the way now. Foreigners would simply walk away from that."This creates very bad impression about the government in the overseas markets."Jagannadham Thunuguntla, Head of Research, Smc Investments And Advisors Ltd"Players like Bharti Airtel and Idea Cellular with popular brands and strong balance sheets will be clear beneficiaries because they can take advantage of this situation and increase market share."Foreign players like Sistema and Etisalat, which are government controlled companies... those governments will start feeling apprehensive about doing business in India and hence, drawing foreign direct investment would be little more challenging for the country."Deven Choksey, Chief Executive Officer, Kr Choksey Securities"The Supreme Court wants the government and the ministry to come to a conclusion and clear the licence ruckus because this entire controversy has been terrible."The market is viewing it positively and will only recover because the earlier licences which have been cancelled will be re-issued after the revised guidelines come out and the monetary considerations will be swapped against the new licences." Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
