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2G verdict to end policy paralysis: Experts

Last Updated: Thursday, February 2, 2012 - 21:53

New Delhi: The Supreme Court judgement that
cancelled 122 telecom licences in the 2G spectrum allocation scam will end policy paralysis in the government and lead to
transparent rules, experts said Thursday.

Besides, it will provide an opportunity to the government
to make quick decisions and could lead to the entry of some
mature MNCs in the telecom sector, they added.

"This move (judgement) has been to cleaning up house and
make policy making and regulations more transparent. As a
result of this 2G scam and other issues there has been virtual
paralysis in decision making at the ministry and regulatory
level which was starting to hurt industry," Research Director
at Gartner Kamlesh Bhatia said.

He added that due to uncertain policy environment telecom
operators were unable to decide on big plans.

"The operators themselves were not sure what decision the
ministry will take, so their own planning was not moving in
the direction it should have. From that stand point this
judgement will start the new process," Bhatia said.

Deloitte Haskins and Sells partner Hemant Joshi said,
however, that the judgement is likely to add to the
uncertainty surrounding the telecom sector.

But there is a silver lining as the judgement will put
pressure on the Government to close this matter within 4
months, he added.

"This (judgement) will add to uncertainty. There is a
flip or positive side to it. Four month period that SC has
given in the judgement provides an opportunity to end
uncertainty. Once this is resolved, operators can look
forward to stable policy," Joshi said.

He also said the judgement provides a good exit option to
operators who haven`t rolled out networks in future.
"From a long term perspective it is going to help Telecom
industry as a whole," said Benoy C S Director for ICT Practice
at Frost and Sullivan for South Asia and Middle East.

"It will open up the opportunities for some global
telecom companies who missed the race earlier to invest in
Indian telecom industry," he added.

He added that India will see the entry of some mature
multi-national companies which will bring in a healthy
competition and better quality of service.
However, some experts said that the judgement can have
negative impact on foreign investors.

"The foreign investors likely to adopt cautious approach
while taking investment decision. The issues which arise from
verdict unless resolved quickly will create lot of uncertainty
which could again have negative impact on foreign investment
in India," Joshi said.


First Published: Thursday, February 2, 2012 - 21:53
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