Asks Department of Telecom to put up all spectrum for auction

The Supreme Court on Friday said that all 2G mobile operators whose licences were cancelled in February 2012 should stop offering services to consumers forthwith.

The immediate impact of this will be on mobile subscribers of Uninor as the company will have to shut down operations in circles such as Kolkata and Mumbai. Uninor will, however, continue to offer services in six circles as it had won spectrum in these areas in the recent auction.

“Uninor wishes to clarify that this order will have no impact on its operations and services in the six circles of UP East, UP West, Bihar and Jharkhand, AP, Maharashtra and Goa and Gujarat since Telenor Group has already secured fresh spectrum for 20 years in these,” the company said.

There will be no immediate impact on subscribers of Sistema Shyam, which offers CDMA-based mobile services under the MTS brand. Sistema Shyam said it will continue to offer services because the apex court will come out with a separate order based on its appeal.

The company had filed an appeal on January 10 seeking extension of its licences in 21 circles as it wants to participate in the next round of auctions, in March.

To pay reserve price

Most of the other 2G players, including STel and Etisalat, have shut down operations. Meanwhile, the aggrieved telcos are separately seeking damages from the Government for giving them licences under a flawed policy. Foreign players, including Sistema and Telenor, are pursuing protection under bilateral investment treaties.

On Friday, the apex court said: “The telecom companies which have been unsuccessful in the bidding and those that, after the cancellation of the licences, did not participate in fresh auction are directed to cease from continuing operations forthwith and the successful bidders will immediately start in their respective circles.”

A Bench comprising Justices G.S. Singhvi and K.S. Radhakrishnan directed that telecom companies that were allowed to continue operations after scrapping of their licences by February 2, 2012 judgment will have to pay the reserved price fixed for the licences in the first round of the auction held in November 2012.

The Bench clarified that the apex court’s February 2, 2012 judgment will not be applicable for telecom companies holding the spectrum with 900 MHz band.

SELL Entire spectrum

The Supreme Court also directed the Government to immediately auction the entire 2G spectrum which will be available after the licences are cancelled. This means the Government will have to revise its plan as it had planned to put up for auction only a part of the total spectrum available.

The Department of Telecom had argued that the auction would not succeed if the entire spectrum is put up for bidding as the supply would exceed demand.

However, in the November auction, the DoT could not sell a large chunk of the spectrum despite creating artificial scarcity. Market watchers said that if all spectrum is put on the block, then operators may be able to buy spectrum at base price without having to bid.

The DoT had kept back part of the spectrum for re-farming the 900 Mhz band. The plan was to allocate spectrum in the vacated 1800 Mhz band to players who currently hold bandwidth in the 900 Mhz band.

(This article was published on February 15, 2013)
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