Foreign investors may join Indian GSM firms against ‘pro-dual-technology’ policy


Posted by on October 26, 2007  /  0 Comments

Foreign telecom investors, who hold significant stake in India telecom companies, are exploring the possibility of joining hands and initiating an arbitration proceeding against the government of India and department of telecom (DoT) in foreign courts against the new telecom policy.

The move comes as some of the foreign investors say the that the new policy announced last week, which allows dual technology “favoured only CDMA players, especially, Reliance Communications”. Besides, the new policy has also enhanced subscriber-linked criterion for spectrum allocation by multiple times – this implies, operators such as Bharti Airtel, Vodafone, Idea Cellular cannot get additional spectrum in their existing circles unless they increase their subscriber base between two-six times, a process that will take anywhere between 18-48 months. This has also led to the pending applications of all GSM players being disqualified.

The new norms, if implemented, will hit the expansion plans of all telcos and also lead to a heavy increase in the capex for the next couple of years. Additionally, it will also result in the valuations enjoyed by Indian telcos witnessing significant falls.

Read full story in The Economic Times

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