Supreme Court order a breather for Sistema, Uninor

Today’s Supreme Court (SC) judgment brings relief to about 17.4 million subscribers of Sistema Shyam TeleServices and Uninor, as the two telecom firms will be able to continue their services till February 4, when the apex court will hear the case again.

However, in its next hearing, if the SC decides not to extend the licence terms till the proposed auction which starts on March 11, the telcos might have to let go of their customers.

“It certainly offers some room to both Sistema and Uninor, but there is still some uncertainty. An extension till the next auction would have given the companies scope for better planning,” said a telecom analyst who did not wish to be named.

According to the analyst, the government is likely to work out something to protect the interests of both the consumers and the companies until the proposed auction in March is over.

Sistema has about 15.6 million customers in 21 telecom zones, while Uninor had 1.8 million subscribers till November 2012, according to data from the Telecom Regulatory Authority of India (Trai).

The department of telecommunications (DoT), in an affidavit filed before the SC on January 8, said, “The government may consider issuing temporary licences to such operators till the commencement of operations by the successful bidders in the proposed auction and subject to the further condition that they will be liable to pay the price discovered for the spectrum in the proposed auction or the reserve price, whichever is higher, with effect from January 19.”

So, even if the SC does not extend the licence period for the telcos whose licences were quashed, the government still has the option to safeguard consumers and the affected operators, pointed out the analyst.

The DoT also suggested the operators be charged for spectrum from January 19. Telenor Group said today it may decide to participate in the second round of auctions and Uninor’s services will continue in Mumbai in line with the license extension announced by the SC.