Etisalat to stop Indian network after losing mobile licenses

The move will affect close to 2 million mobile subscribers in India

Middle-East mobile operator Emirates Telecommunications, known as Etisalat, is suspending its network and services in India, following a court order cancelling the mobile licenses of its Indian joint venture.

The move will affect close to 1.7 million mobile subscribers of the Indian startup, which is still a fraction of the about 894 million mobile subscribers India had at the end of December, according to data from the Telecom Regulatory Authority of India (TRAI).

India's Supreme Court ordered earlier this month that 122 2G licenses in 22 service areas issued in 2008 should be canceled within four months, as they had been purchased by business entities that manipulated the system. TRAI was instructed by the court to auction the spectrum and licenses released as a result.

The order in the 2G scam case has affected the Indian operations of Telenor, NTT DoCoMo, Sistema, and Etisalat, some of whom have said they will seek a review from the court.

Etisalat said in a statement late Wednesday that its joint venture, Etisalat DB, will be taking steps to reduce operating costs, including the suspension of its network and services. The court's decision has removed Etisalat DB's ability to operate from June 2, it added.

The company, like other affected multinational companies, holds that it was not a participant in the controversial events that led to the award of the licenses in 2008, and had only acquired a stake in a company that had bagged the licenses. "The factors behind the Supreme Court judgment are based on actions that took place long before Etisalat entered the Indian market and considered investing in Swan Telecom," it said.

Etisalat took an impairment charge earlier this month in its 2011 consolidated financial statements of UAE Dirhams 3 billion (US$828 million) against goodwill and net assets including licenses of its Indian operation.

The company did not rule out participating in the new auctions to be announced by TRAI. "Etisalat will make a decision on its future participation in the Indian market when there is clarity on the auction process and telecommunications policy and greater legal and regulatory certainty and stability," it said.

Telenor has meanwhile sought indemnity and compensation from its Indian joint venture partner after the cancellation of its 22 2G licenses by the court. It said it was looking for a new joint venture partner, and did not rule out participating in the spectrum auction.

Companies planning to start afresh in India's mobile market will however have to reckon with competition from large incumbents like Bharti Airtel and Vodafone India, and the slowing subscriber growth in the country, said Kamlesh Bhatia, principal research analyst at Gartner. "They have to come in with a clear strategy around differentiated services, customer service, and content," he added.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

John Ribeiro

IDG News Service
Show Comments

Cool Tech

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Breitling Superocean Heritage Chronographe 44

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?