If apex court does not relent, 2G players may get temporary permit
The Department of Telecom has filed an affidavit in the Supreme Court to allow operators, whose licences have been quashed, to continue services till the next round of auction.
The Telecom Department has told the court that it has put in place an action plan to conduct another round of spectrum sale in March and hence the operators may not bid if their services are shut down on January 18.
“It is respectfully submitted that existing operators whose licences stand quashed may or may not evince interest in such an auction if they are not allowed to offer their services pending conduct of such an auction and this may impact the discovery of an optimal price for spectrum,” the DoT said in its affidavit.
The Telecom Department has said that in case the court agrees to extend the licence period, then it may impose a condition whereby the telecom companies will have to pay for spectrum with effect from December 19. The price of the spectrum will be based on the price discovered during the auction or the reserve price, whichever is higher.
The DoT has further added that if the court does not extend the licence period beyond January 18, the Government may issue temporary licence licences to operator till the auction is completed.
“Such an arrangement will avoid disruption of services to the subscribers on the one hand, and safeguard public revenue on the other,” the DoT said in its affidavit.
Sistema will benefit
The biggest beneficiary of this move will be Russia’s Sistema as it will give the company’s Indian venture two more months to decide its future course of action without disruption of service. The company’s curative petition is likely to come up for hearing on January 10.
The petition seeks to revoke the court’s decision to cancel its licences. The other option for Sistema is to buy back spectrum in the next round of auction. Since the base price is being reduced by 30-50 per cent, Sistema could win 2.5 Mhz pan-India CDMA spectrum for about Rs 3,000 crore
In February, the Supreme Court had quashed all licences on or after January 10, 2008. The court had asked DoT to auction spectrum and cancel the licences on January 18. The DoT has informed the court that though it has completed the auction process in November, the Government is planning another round of spectrum sale in March in a bid to find buyers for unsold spectrum.
In the November auction, the Government did not receive any bids for the entire 800 Mhz band used for CDMA mobile services. In the 1800 Mhz band, there were no bids in four circles, including Delhi and Mumbai.
While most of the players whose licences are set to be quashed have either wound up services or bought fresh spectrum in the auction held in November, there is a big question mark on the fate of Sistema Shyam. The company did not participate in the November auction which means it will not have any spectrum after January 18.