DoT has cleared the route for five new operators to enter the Indian telecom sector. DoT issued LOIs to new applicants including Unitech, Shipping Stop and Datacom for pan India operations, reports CNBC-TV18. However, Parsvnath, Indiabulls and Cheetah's applications have been rejected by DoT. Spice Tele has got an LOI for operations in four circles. Meanwhile, Bycell, Allianz Infra, HFCL failed to bag LOIs.The LOIs will be converted to pan India licence on payment of Rs 1,650 crore. Priority in spectrum allotment will be determined by conversion of LOIs.
I don't know why DOT is giving License to a real estate company which doesn't have expertise in Telecom operations. It would be helpful for Unitech to increase its valuations. Other than that this is clear strategy to spoil the sentiments of already existing players in Telecom Industry who are there for years and suffered losses during their existense. Already an issue of CDMA & GSM has to be sorted out. Reliance got both the licenses and it clearly states the lack of professionalism of Telecom Industry. This step would definitely kill GSM lobby. This is one of the most worst decisions that has been carried out by DOT in its life time. If Rcom wants to pursure GSM it should sell its CDMA operations and it should seek GSM. But in India, its different. You could do anything provided you have financial muscle, Lobbying and everything thats working for you.
People use to say that Reliance is a marketing machine and et al. But its an overstatement and Reliance doesn't deserve this appreciation. Indian growth story woudn't be intact if government does stupid moves like giving licenses to underserved or unfit companies which are doing it only to appreciate its Market capitalization and Loan power than doing real business.
I'd bet that these companies would start SPV or seperate companies and list it in stock exchange. Later on it would negotiate to sell the company that would gain the price due to spectrum allocation. This is going to happen. This is sheer non-sense and noone would accept.
Indian Growth story is intact, if you could have a lobby in Government circles.
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