Gulf telecom player, Etisalat, quits India business

10th March 2012
Gulf telecom player, Etisalat, quits India business

IndiaTechOnline special briefing
March 10 2012: The Middle Eastern telecom operator, Etisalat has decided to shut down its operations in India, writing off a near $ 900 investment, the second global player after Bahrain Telecom, to sign off on the country in the aftermath of court orders in the highly publicized national spectrum scam
On Friday, Etisalat advised 1.67 million customers of its India brand Cheers Mobile spread across 15 subscription circles in 8 plus states to invoke number portability to migrate to other networks by March 31. The telecom major had a 45 percent stake in Swan Telecom one of the Indian providers affected by the Supreme Court decision a few weeks ago which cancelled 122 licenses to operate 2G services from 2008.

Etisalat’s move, cutting its losses in India, follows a similar pullout by Bahrain Telecom, partner of the Chennai-based S-Tel whose 6 licenses were also ordered to be cancelled – representing a $ 175 million investment by the foreign partner. S-Tel promoter and Siva Group Chairman C Sivasankaran has asked the government to refund this amount in exchange for the licenses. "This, in our opinion, would at least save the already tarnished image of the country vis-a-vis foreign direct investment”, he argued.

These instances of global institutional investors voting with their feet are the first appalling fallouts of the sad and sordid saga of Indian mobile telecommunications and the corrupt practices at the highest political and bureaucratic levels that engulfed key private sector Indian and international providers.
Ironically the court’s direction to conduct an auction of the 2G spectrum is being challenged by the same government which is in the process of shutting down over 100 networks and effectively suspending the services enjoyed by nearly 80 million subscribers.

The message that is being read by the international telecom fraternity in the frequent regulatory flip-flops in knee jerk reaction to media exposes and judicial pronouncements , may play havoc with the government’s plans to empower every Indian with the tools of communication and set back targets by at least five years. But that will move the crisis to the tenure of another government after the elections of 2014. And in the present environment the mantra seems to be ‘he who wriggles and runs away, lives to wriggle another day’.