"We expect that many of the telcos whose licences were cancelled by India's Supreme Court in February 2012 will not participate in the re-auction, as most telcos have a stretched balance sheet," Fitch said in a statement today.
Adding to its analysis, Fitch said, "The three smaller operators -- Etisalat, Videocon and STel -- have already exited the industry."
Clarifying on the status of Videocon's telecom operation, the agency said, "Fitch believes that they have made up their mind to exit and should soon announce officially."
However, comments from Videocon were not received on the matter.
Fitch further said Uninor and Sistema Shyam Teleservices (SSTL) are likely to either exit completely or partially from telecom business.
"The Indian subsidiaries of Telenor and Sistema are most likely to pull out either completely or in part," Fitch said.
Responding to the statement, Telenor said it is company's ambition to participate in the upcoming auction and secure a new licence if the auction rules allow us do it.
"We now await the information memorandum to provide clarity on all details related to the new licences," Telenor spokesperson said.
SSTL also said it is awaiting clarity on a range of legal and regulatory issues and is committed to protect the interests of more than 16 million customers, 3,500 employees, investments of over USD 3.1 billion, among others.
"SSTL has also filed a curative petition... and is hopeful that the highest court of the land will look into the merits of the case and will give the company justice. Beyond this, it would not be possible for SSTL to offer any detailed comments," SSTL spokesperson said.
Fitch also said Tata Teleservices and Aircel may look to consolidate to strengthen their position as they have not been able to make profit till date.
"The fifth- and sixth-largest private operators (subsidiaries of Tata and Maxis) may also look to consolidate to strengthen their position, as both operators have been unable to register an operating profit so far," Fitch said.
Tata Teleservices and Aircel did not immediately offer any comments on Fitch report.