Providence Equity Partners-backed telecom firm Idea Cellular said that the Supreme Court ruling, which quashed 122 telecom licences granted post-January 2008 in a landmark judgement on Thursday, would affect seven operational service areas of the company, comprising 4 per cent of total revenues.
The apex court ruling will cancel as many as 13 licences held by Idea Cellular, of which seven are operational. Of the 13, nine belonged to Idea Cellular and four were held by the erstwhile Spice Communications, which was later acquired by Idea Cellular.
Idea had rolled out services in seven of these circles, namely, Tamil Nadu, Kolkata, West Bengal, Orissa, Assam, NESA and Jammu & Kashmir. The remaining two licences of Idea Cellular and four of Spice Communications are currently non-operational.
The seven service areas cater to over 6 million users and these account for about 5 per cent of Idea’s cumulative capex and 4 per cent of revenues. The loss-making circles have seen negative EBITDA, the company has disclosed.
“Idea Cellular has unnecessarily been caught in this situation of cancelled licences just because the licences were granted in January 2008, which was as late as 18 months from the date of application,” the company stated on Thursday.
Idea Cellular scrip was up 2.68 per cent and last traded at Rs 95.85 a share on the BSE on Thursday.
Idea Cellular is also backed by Malaysia’s Axiata (formerly Telekom Malaysia). Last year, two large private equity investors TA Associates and ChrysCapital had exited their investments in Idea Cellular.