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COAI fires first salvo in a war between Bharti Airtel led incumbent operators and Reliance Jio
Manoj Gairola |  |  09 Aug 2016

Was it the beginning of another war in the telecom sector when the Cellular Operators association of India (COAI) attacked the government, on Monday, for “favoring” Mukesh Ambani’s Reliance Jio.

COAI’s media statement came within a couple of hours of the secretary of the department of telecommunications (DoT) J S Deepak announcing the Spectrum auction schedule. It seems that the COAI was ready with the press release and was waiting for the government to announce the auction. COAI’s statement was prominently published by all the business newspapers on front pages.

Any serious observer of Indian telecom sector would agree that the incumbent operators have fired the first salvo. Now, the game can only become dirtier.

COAI is an industry lobby group that represents private incumbent operators including Bharti Airtel, Idea Cellular and Vodafone.

Though COAI has been opposing TRAI on various platforms, it is for the first time that it directly attacked the TRAI (and indirectly the government) of favoring Reliance Jio. What surprised many was the timing of the strongly worded press release.

The last battle between the incumbent and the new operators was during the UPA regime when A. Raja was the minister. The incumbent operators opposed the entry of new operators, when the licences were awarded in 2010. They attacked Raja and questioned allocation of Spectrum to the new service providers on the basis of first-come-first-served basis.

This resulted in one of the biggest scams in Indian history. In the process, the minister along with promoters of two new Telcos went to jail. The incumbent operators were also allocated additional spectrum on first-come-first-served basis. So everyone was found to be involved in the ‘spectrum scam’. In fact, the scam was happening for last many years.

As a result, the process of allocation was streamlined and now all the operators had to acquire Spectrum through auction process. So party was over for the incumbent operators.

In fact, the incumbent operators suffered more due to ‘scam’ than the new operators as they had a healthy balance sheet and a good story to tell the investors. Now, they have to acquire Spectrum through auction and this has adverse impact on their balance sheet.

It will be interesting to observe what impact the new war would have on the telecom sector.

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09 Aug 2016(IST)  
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