Loop latest casualty of 2G verdict, company to shut down opeartions by June 1

Sanjay Singh   New Delhi     Last Updated: April 10, 2012  | 14:01 IST

Loop Telecom has become the latest casualty of the 2G licence cancellations after the UAE based Emirates Telecommunications Corporation (Etisalat) and STel, Bahrain Telecom. It will shut its telecom operations in India completely by June 1. "We will close our operations by June 1. This is what we have conveyed to our subscribers.

We have sought refund of around Rs 1,500 crore as damages from the government. They have not replied to our letter yet in this regard," said the spokesperson for Loop Telecom.

However, sources said that Loop's letter to department of telecommunications (DoT) had asked for a refund of about Rs 2,800 crore, including Rs 1,500 crore as entry fee, another Rs 800 crore invested in bank guarantees and Rs 500 crore invested in the business.

The Mumbai circle will, however, be an exception since it is governed by a different licence. The Mumbai permit was bagged by a separate company, Loop Mobile India. Operations in 21 circles, where Loop has about 6,000 subscribers, will be shut down.

The operator has hardly set up its infrastructure in these 21 circles. The withdrawal of Loop's services will impact subscribers in Haryana, Kolkata, Madhya Pradesh, Odisha, Punjab, Rajasthan and some other states.

The operator carried advertisements in newspapers and messaged its subscribers on Monday to opt for porting to other operators as it will not be able to provide telecom services after June 1, the deadline set by the Supreme Court (SC).

The operator, in its March 30 letter to the DoT, had informed it about the process of its closing down the operations. Loop applied for a Unified Access Service Licence (UASL) in 21 circles and obtained it on January 10, 2008, along with the rest of former tainted telecom minister A. Raja's beneficiaries. Soon after the SC ruling, Loop said that it did not sell any of its shareholding after having received such licence.

The SC had on February 2 ordered cancellation of 123 licences issued by Raja in 2008 on first-come-first-serve basis. THE apex court had also asked the government to issue fresh licences through auction.

Loop has also sought Rs 726 crore as interest from the government and Rs 787 crore as compensation for investments made besides damages of its loss of goodwill in the market. Loop has also served notices to 200 of its employees and cancelled its deal with over a hundred of its vendors across the 21 circles.

Besides Etisalat, STel and now Loop, Telenor and Idea Cellular have separately announced plans that range from indications of shutting shop to seeking review of the apex court ruling. Aditya Birla group company Idea Cellular, whose nine licences were quashed by the SC, became the first company to file a 'clarificatory application' with the apex court saying it had applied for licences in 2006 and not in 2008, when Raja was accused of subverting the process of allocating 2G licences.

Norwegian investor Telenor has, however, said it will continue its operations in the country but with a different partner. It announced formation of a new company by severing ties with its existing Indian partner Unitech.

Courtesy: Mail Today 

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