Indian Startups Seek Exit
The report names Swan Telecom (now known as Etisalat DB) as one company that has approached the Department of Telecommunications about handing back its license and spectrum, and getting a refund of its license costs.
Etisalat DB (Swan), which has signed up very few customers since it launched its services a few months ago, was one of a number of new entrants awarded spectrum in January 2008. (See India Adds 18M Subs in June and Indian Gov't Grants Mobile Licenses.)
The others, which have all also launched their services, were: Unitech, which is now Uninor ; S Tel Pvt. Ltd. ; Loop Telecom Pvt. Ltd. ; and Datacom, now Videocon Telecommunications Ltd.
The startups certainly need some kind of help from the government. Current regulations concerning ownership lock-in periods and spectrum allocation caps have prevented mergers and acquisitions that would almost certainly have taken place by now. (See Easy on the M&A.)
Some of the startups are seeking new investors -- see this Bloomberg story -- but so far without success.
The question the industry is asking now: If the government won't change some of its ownership rules, or enable an affordable exit option, what will become of India's struggling operator startups?
— Gagandeep Kaur, India Editor, Light Reading