Strategy shift

New Delhi, April 15: UAE-based telecom operator Etisalat, in the process of winding up its Indian operations, is not yet ready to leave the country permanently.

Sources told The Telegraph that Etisalat was likely to snap ties with its Indian partner DB Group and was weighing the possibility of re-entering the sector with a new partner once the government came out with the spectrum auction rules.

The Abu Dhabi-based firm holds a 44.73 per cent stake in Etisalat DB Telecom, while 45.73 per cent is with Majestic Infracon (DB Group promoter firm), which is controlled by Shahid Usman Balwa and Vinod Goenka.

“It will be interesting to watch how Etisalat reacts to telecom regulator Trai’s directive on continuing with mobile services till June 2 considering that it wants to make a comeback at a later stage,” said Supito Basu, an independent telecom analyst.

Last week, Trai had ordered the operator to continue providing mobile services till its licence remained valid, or face penalty.

STel and Loop Telecom have also received similar directives. Analysts said it might be difficult for Trai to press penalties on these firms since they had already appointed a liquidator.

A spokesperson for Etisalat DB said, “It will be impossible to restart services,” adding that the firm’s services were terminated on March 31, following a 30- day notice period as stipulated in the terms of its licence.

Etisalat’s relations with its partner have been strained for some time and this is a good opportunity to sever the tie, sources said.

While Etisalat has blamed its partner for “loss of Indian investments”, Majestic Infracon contends that Etisalat is in “complete control” of the venture and “hence, responsible for EDB’s current state of affairs”. Etisalat has also initiated legal proceedings against its partner for fraud and misrepresentation.

Norway’s Telenor is also in the process of scrapping its joint venture with Unitech and transfer its business to a new firm to seek fresh licences.