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TMCNet: Had to re-visit strategy for 16 circles: S Tel

[March 13, 2010]

Had to re-visit strategy for 16 circles: S Tel

NEW DELHI, Mar 12, 2010 (The Times of India - McClatchy-Tribune Information Services via COMTEX) -- Has your mobile phone bill come down by nearly half? It should have, if one believes an affidavit filed in the Supreme Court by a mobile service provider, which locked horns with A Raja's ministry for arbitrarily ousting it from 16 telecom circles but threw in the towel allegedly under pressure from the government.


S Tel, a JV between Chennai-based Shiva Group and Bahrain Telecom, told the SC that the average revenue earned from each mobile phone subscriber has dramatically plummeted from Rs 275 in 2007 to Rs 164 at present, while number of cell phone users more than doubled from 201 million to 545 million in three years.

"In September 2007, there were a maximum of 6 operators in a circle. As of January 2010, the number of existing operators/licensees is in the region of 12-13," it said.

S Tel had surprised SC for agreeing to compromise with the ministry by writing a letter at a time when the court was in the process of hearing the appeal by the government against the HC verdict.

In its fresh affdaivit, S Tel said the matter relates to January 2008 and its competitors in the respective telecom circles had got a head start of two and a half years and it did not have the stomach to take them on at this stage in a changed business scenario.

It added that timing of spectrum allocation continued to be uncertain and in the changed scenario, it had to re-visit its business strategy for the 16 telecom circles and "decide on partaking in the business of providing services in all or a chosen few of the said circles".

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