The Supreme Court has placed the ban till May 9th, when the Court will hear the case on 3G intra-circle roaming (3G ICR) again.
However, the operators can continue serving existing subscribers. Though it is not certain, the other GSM players (Idea and Vodafone) might also be prohibited from adding new subscribers in circles where they do not own 3G spectrum. We believe the restriction on adding customers for one month (28 days to be precise) is unlikely to impact the telecom operators meaningfully. The larger and more important question remains whether the Supreme Court allows 3G ICR or not, on which a decision is likely to be taken on May 9th.
We believe complete restriction on 3G ICR is likely to have differential impact on telecom operators. It could reduce the number of 3G operators in a circle to 3 or 4, which will reduce competitive intensity and increasing operators’ pricing power.
Moreover, if an operator has to shut operations in one circle where it does not own 3G spectrum, another operators might have to shut operations in another circle where the first operator has stronghold and can thus gain market share. Hence, we believe the
gain / loss from restriction in 3G ICR of the affected operator will be a function of its market-share gain prowess elsewhere. It is not all negative.