They're calling it a cost cutting exercise, but this could well be a precursor to pulling out yet: Etisalat's board has taken a decision to shut down its network, suspending its services, in order to reduce its operating costs prior to any decision on 2G spectrum auctions being announced from the Department of Telecom (DoT). This decision follows the cancellation of 122 UAS licenses issued in 2008, by India's Supreme Court. Etisalat DB had invested in Swan Telecom following allocation of 14 licenses to them, and the subsequent (reportedly) the acquisition of licenses in two circles held by Allianz. As of end of December 20011, Etisalat DB had 1,610,824 connections, but only 25.45% of that base was active. That's a minor fraction of India's active connection base of around 650 million, and the shut down would be have the cumulative impact of a pebble being thrown in an ocean, so it really doesn't matter. What is noteworthy is that now two middle eastern telecom operators who had picked up stake in companies that benefited from the 2008 allocation appear to have halted operations: Batelco exited STel recently. Etisalat recently wrote off $827 million of its investment as an impairment chart too. No cessation date has been communicated so far, but Etisalat and other telecom opertors have to shut down operations by June 2, 2012. What doesn't help matters is that the Department of Telecom appears to be in no hurry to hold auctions, which puts telcos like Telenor in…
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