The Supreme Court on Thursday reserved its judgment on a petition seeking cancellation of 2G licences given to telecommunication companies from 2008 onwards during the then Telecom Minister Mr A. Raja's tenure.

The petitioners are seeking cancellation of 2G spectrum licences issued by the Department of Telecommunications (DoT) on or after January 10, 2008, which includes 122 new licences bundled with spectrum, GSM spectrum in 20 circles to Tatas and spectrum allotted to Dishnet Wireless (Aircel) and Vodafone based on their existing licence.

The petitioners (a group of civil societies and an NGO Centre for Public Interest Litigation) had alleged that these companies were prima facie ineligible and/or failed to fulfil the rollout obligations. They also alleged that the spectrum allocation during Mr Raja's tenure was marred by serious allegations of favouritism, corruption and illegalities.

They alleged that the licence allotment made in 2008 by the first-come-first-served policy (FCFS), rather than by an auction, and that too at 2001 prices, was arbitrary and caused huge losses to the exchequer. The FCFS policy implied that the applicant who comes first will be granted spectrum first.

The petitioners said the DoT's move to advance the cut-off date and eliminate 343 of 575 applicants was judicially held to be arbitrary and illegal. Changing at the last moment the basis of FCFS – from application date to date of compliance of Letter of Intent conditions – was also arbitrary and illegal, they added.

During the hearing, the apex court had issued notice to the DoT and 11 telecos — Loop Telecom, Etisalat DB (Swan Telecom), Vodafone-Essar, S-Tel, Unitech wireless group, Videocon Telecommunications (Datacom Solutions), Idea Cellular & Aditya Birla Telecom Ltd (Spice Communication), Allianz Infratech, Tata Teleservices, Sistema Shyam Teleservices and Dishnet Wireless Services and Aircel Ltd.

The Court also wanted to know why the Telecom Regulatory Authority of India (TRAI) had been silent for over a year on the alleged delay by the companies in fulfilling the rollout obligations.

The telcos, however, denied these allegations and argued that if FCFS policy adopted during Mr Raja's tenure was to be held illegal, spectrum allocation since 2003 should also be cancelled. The old service providers claimed that the spectrum allocated to them are valid, adding that there should be no comparison with the new players whose licences are looked into by the court.

New players such as Tatas and Swan argued that if the court cancels their licences and the allocated spectrum, it should be retrospectively applied from 1995 because the spectrum allocation was carried out then also under the same policy.

Meanwhile, the Attorney General Mr G E Vahanvati told the court that the FCFS policy was not referred to TRAI.

However, the TRAI's recommendation that there should be no cap on the number of licencees was accepted by the Government, he added.

He also said that when TRAI gave its recommendation that there should be no cap, according to the DoT, it did not deal with the paucity of spectrum. He added that TRAI also had not given any solution to the paucity of spectrum.

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