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Home > Business > Business Headline > Report

ICICI Bank, IIT to study viability of telecom firms

Thomas K Thomas in New Delhi | May 02, 2003 12:24 IST

The communications ministry has roped in ICICI Bank and the Indian Institute of Technology, Kanpur, to study the financial viability of telecommunication players in the next 6-12 months.

The study, which will identify candidates for mergers and takeovers, will help the government to decide on the framework for a single licence regime.

Government officials said the proposal was mooted by Communications Minister Arun Shourie to put an end to the numerous litigation in the telecommunications sector.

Recently, replying to a question in Parliament, Shourie had said his ministry was studying the issue and would move towards a regime where operators would be able to deploy any technology and offer any type of service. He, however, said it would take time.

While a single licence will allow basic operators offering limited mobility services to offer full-fledged mobile services, the question is how much it will cost the government and the operators to shift to the new regime.

The government, for instance, has already said it would not give any monetary compensation to cellular operators.

Analysts said while a universal licence regime might end the turf war between limited mobility operators and cellular service providers, a fresh dispute might emerge if the terms and conditions were not universally accepted.

Some of the basic operators are saying they have paid a higher licence fee and, therefore, there is no question of paying any additional fee to get a mobile licence. 

Industry sources, however, said cellular and basic operators had almost agreed to the concept of a single licence during negotiations for an out-of-court settlement over the issue of limited mobility in February.

The industry group set up by Shourie for holding the negotiations included Mukesh Ambani, chairman, Reliance Industries and Sunil Mittal, chairman, Bharti Group.

"Had it not been for some smaller operators, the proposal to converge licences would have emerged as a solution to the ongoing disputes in the sector," said an industry source.


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