February 21, 2012 / 2:10 PM / 8 years ago

India's S Tel says helping users switch to others

MUMBAI, Feb 21 (Reuters) - Indian mobile operator S Tel, which is set to lose its licence after a court verdict, said it is helping clients switch to other operators but did not respond directly to reports that it had decided to shut down.

India’s top court ordered on Feb. 2 that all 122 licences issued under a scandal-tainted 2008 sale be revoked within four months and asked the industry regulator to propose rules for an auction of licences and spectrum.

The companies whose licences were cancelled have the right to bid in an auction to regain the licences and radio airwaves.

S Tel said on Tuesday its board would decide whether it would take part after seeing final recommendations for the auction to be framed by the country’s telecoms sector regulator.

“Our infrastructure and media vendors have intensified disconnection of services, since the passing of the judgment by the Supreme Court, considering that there is now no chance of the banks disbursing funds,” S Tel said in a statement.

A report on the website of the Economic Times newspaper, citing a company source, said Tel had decided to shut down operations due to “unviability” of the business.

Bahrain Telecommunications Co said on Feb. 8 it would sell its 43 percent stake in S Tel for $175 million, the first exit by a foreign operator since the court verdict.

Batelco will sell the stake to its India partner Sky City Foundation Ltd, for the same price that it paid to acquire the S Tel holding in 2009, the Bahraini operator said.

S Tel had 3.6 million customers as of December and ranked 12th out of 15 players by subscriber base.

It has licences for six smaller telecoms zones out of a total 22. S Tel also owns 3G radio spectrum in three zones. (Reporting by Sumeet Chatterjee and Devidutta Tripathy; Editing by Ted Kerr)

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