Collateral Damage

The Supreme Court’s recent verdict to strike down 122 telecom licences in the much-debated 2G case resembles like an earthquake whose aftershocks are felt well outside the epicentre: Heads will roll but as a oblique, rather than direct, consequence of the shake-up. As Subodh Bhargava quit on 6 February as Chairman of Viom Networks, he became the opener of the new exit doors. A recent KPMG report could be a reason for Bhargava to step down. The difference in the cultures of Tata and Srei (the two partners in Viom) is another reason he has provided. While Viom officials have stated that Viom has received a clean chit from KPMG’s report, last year’s allegations of financial irregularities and fund diversion still hover over the company.

The second largest telecom towers company has much to gain from an exponential growth of the telecom industry, and therefore it is both significant and ironic that Bhargava cited the heady speed of the growth of his business itself as a reason for leaving. Although the apex court’s verdict was targeted towards service providers, network providers such as Viom—among the most ambitious telecom tower companies—will suffer too, since the verdict is likely to result in consolidation among the telecom players. Experts are projecting the tower rental losses in the range of 10-12 per cent. Already, Viom stands to lose nearly 40,000 sites for Uninor that has lost all its licences (although Uninor will bid in the new auctions). Etisalat DB and STel, two of Viom’s other clients, have also been cancelled.