SC junks telecom companies' pleas for licence extension

The Supreme Court today dismissed the plea of telecom operators, including Vodafone and Bharti Airtel, seeking extension of their second generation (2G) spectrum licences, saying the government decision cannot be said to be totally "irrational or irrelevant".
"The impugned decision of the government, which in fact resulted in huge inflow of revenue in the auctions conducted during the pendency of this litigation, cannot be said to be a totally irrational or irrelevant consideration in the context of the spectrum management, more particularly, in the light of decision of this court in 2G case," a bench of justices J Chelameswar and R K Agrawal said.

Refusing to grant relief, the bench said "...This court respects the mandate and wisdom of the executive in the matter of choosing the most suitable method of distribution of natural resources.
"This court also noted that this is clearly a matter of an economic policy entailing an intricate economic choice and the court lacks necessary expertise to make such choice. In the light of the observation...That at least in the matter of disposal of spectrum, auction is the only permissible and intra vires method for disposal. Therefore, the submission of the licensees is required to be rejected," the apex court said.

It further said that the telecom companies are not "compelled" to pay any specific tariffs fixed by government for availing the right to use the spectrum.
"If the price for securing allocation of spectrum is likely to go up because of the procedure of auctioning to have access to spectrum, it goes up because of the market forces. Because there are people who are willing to acquire such a right paying a higher price on the assessment that they would be able to carry on the business profitably even after paying higher amounts for acquisition of spectrum.
"The licensees are corporate houses with enormous economic power which enables them to secure adequate expert advice in the matter of financial planning. We cannot believe that they would make any investment without making reasonable assessment of the possible return on such investment. There is no compulsion by the State in this regard," the bench said.