1. In the span of a week, the court has passed two orders that have significantly strengthened efforts to investigate and prosecute the corrupt. They have given teeth to the Central Vigilance Commission, freed the Central Bureau of Investigation from reporting to the government on key cases, and empowered even an ordinary citizen to initiate action against the corrupt.
2. It is likely that some of the 11 affected telcos will work out some sort of arrangement with the government -- as suggested by the court -- and in sync with how the telecom regulator Trai proposes to go about re-auctioning and allotting licences (again, as instructed by the court). But, on paper at least, the scrapping of 122 licences frees up 540 Mhz of spectrum (fine, second generation or 2G spectrum if you want to be exact). That’s a lot. And so, because it is likely that some affected telcos will now choose to operate in fewer markets (which means their arrangement with the government will be for fewer licences than they originally had), and because it is also certain that some telcos, the ”really guilty” ones will not be allowed by the government to do anything of the sort, a significant amount of spectrum will become available for existing telcos not affected by the 2G case (think Bharti Airtel for starters). Some of the spectrum is in lucrative markets such as Delhi and Mumbai. Need we say more?
3. The government, which doesn’t have money, will have to figure out how it is going to pay out a substantial sum of money to the telcos whose licences have been cancelled. This is, of course, subsequent to, and contingent on what Trai recommends. There’s also the possibility of some of the telcos whose licences have been scrapped taking the government to court.
4. The telecom market, and the financial environment now are not as hot as they were in 2007 and the first half of 2008. This means that any re-auctioning will see limited interest (but it will see interest alright). It also means we could see tariffs rising -- significantly in some markets. So, expect a bigger phone bill.
5. There is, of course, the matter of dealing with the on-ground assets of telcos whose licences have been scrapped (Trai will decide on this), and the loans on the books of banks that have loaned money to these telcos. Issues such as these -- I am sure there will be more -- will add to the complexity involved in implementing the court’s judgement.
6. The Supreme Court’s Thursday ruling also shows that the court is convinced that there has been wrongdoing in the allotment of licences to telcos in 2008. Interestingly, the main case regarding this is being heard in a special court. Will that court now go against the sub-text of the apex court’s ruling? Or is that judgement now merely a formality?
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