Citing uncertainties resulting from the Supreme Court’s decision to cancel licenses given in 2008, the operator is now forced to wrap-up its operations in 10 of its circles. Quizzed on the number Vsevolod Rozanov, President and CEO, Sistema Shyam TeleServices, said, “The 10 circles have been picked based on the levels of competition and spectrum pricing. The intent is to now look at life beyond all the uncertainties. The go forward plan includes continuing with the company’s focus on its data centric-voice enabled strategy in select circles”.
In simpler words, rather than pouring money in the voice-based mobile telephony & bear the burden of added licenses, the company will focus on its core strength of offering CDMA based high speed mobile broadband. Presently, the company offers USB Dongles that work on CDMA technology & provide broadband speeds on any portable or desktop devices via wireless cellular network.
The company will now effectively & immediately lose 2 Million of its subscribers but has assured that they will fully co-operate in immediately providing the Mobile Porting Code under MNP. The Supreme Court’s decision of cancelling licenses, gained while tainted minister A Raja was in the cabinet, has had pretty disastrous effect on many companies. Already burdened under low ARPU & heavy competition, the telecom companies now have to bear the brunt of huge amounts to be paid again in the upcoming re-auction of 2G spectrum.
Sistema Shyam may just be the largest hit player with 21 of its 22 Licenses cancelled. While the company is shedding customers, others like Airtel are apparently eagerly waiting to absorb them, “Our networks are more than capable of taking on board the subscribers of operators which are closing operations. We will ensure seamless connectivity to any user who approaches us for porting,” said an Airtel executive.
These are certainly testing times for telecom companies who not only have to offer quality service, but pay large sums of money to continue their operations. What do you think?