Govt brainstorms on SC's 2G verdict, PM meets senior ministers

Discusses implications on pre-2008 and dual-technology licences, spectrum auction and FDI

Prime Minister Manmohan Singh on Saturday met Communications and IT minister Kapil Sibal, Law Minister Salman Khurshid and Finance Minister Pranab Mukherjee, among others, to analyse the implications of the Supreme Court order cancelling 122 2G licences issued in January 2008, its overall impact on foreign direct investments (FDI), and the options before the government.

Home Minister P Chidambaram, Attorney General G E Vahanvati and Telecom Secretary R Chandrashekhar also attended the meeting.

“This meeting was to inform senior ministers about the implications and ramifications of the judgment. This group was not meant to take any decision,” Sibal said after the meeting.

The telecom secretary gave a presentation on what the judgment was all about and what it meant, Sibal added. “The matter has to ultimately go to the Cabinet. Therefore, the government has to be informed beforehand so that it can take a decision,” he said.

According to people close to the development, the issue of licences issued before 2008 on the basis of the first-come-first-served policy was also discussed in the meeting. Besides, dual-technology licences awarded to Reliance Communications and Tata Teleservices in August 2007 and the financial implications on the government if the licence fee had to be refunded to all whose licences were cancelled were also taken up.

A senior government official said the meeting was called to analyse the Supreme Court judgment and study what the government could do to implement the court order.

“It will involve multiple ministries. So, all ministers concerned were called for the meeting,” added the official.

He stressed that the apprehensions associated with the possibility that an oligopolistic situation might arise after spectrum auctioning and that a company with licence might not get spectrum in the auction were set to be addressed in the final mechanism for implementation of the Court order.

The cancelled 122 licences and dual-technology licences were issued by the then telecom minister, A Raja, who is now undergoing trial in the alleged 2G spectrum scam.

The SC order had also directed the Telecom Regulatory Authority of India (Trai) to frame new rules for licences and auction of spectrum. Trai has already floated a pre-consultation paper for framing the new norms and seeking comments from all stakeholders.

The new auction norms for 2G spectrum that about 540 MHz of spectrum will be released following the SC order was also discussed during the meeting. The PM had asked for the opinion of Attorney General GE Vahanvati on the issue in the last meeting held on Wednesday.

The companies impacted by the SC order include Uninor, Sistema Shyam, Loop, Videocon, Idea, Tata Teleservices, STel and Etisalat DB. Of these affected companies, Uninor, a joint venture between Norway’s Telenor and Unitech Group and Sistema Shyam, a JV between Russia’s Sistema and Shyam group, have invested close to Rs 28,000 crore and were considered serious new telecom entrants.

Both the companies have expressed their willingness to participate in the 2G auction, but will take a final decision after the new auction norms are finalised.

The telecom ministry is likely to take a legal opinion before sending termination letters to the new players.

Supreme Court cancels 122 telecom licences