TDSAT stays order on Qualcomm

In a major repreive to Qualcomm Inc, the telecom sector’s apex tribunal on Wednesday stayed an order by the Department of Telecommunications (DoT) cancelling the ISP licence of the San Diego-headquartered company.

An interim order of the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) restrained the DoT from allotting the BWA spectrum earmarked for Qualcomm to any other operator till further orders. The bench also stayed the government from forfeiting the bid amount of Rs 4,900 crore paid by the wireless telecommunications research and development company to the DoT for winning spectrum, according to news agencies.

In the auction last year, Qualcomm, is also the world’s largest fabless chip supplier, had won broadband wireless access (BWA) spectrum in four circles — Delhi, Mumbai, Haryana and Kerala — for about Rs 4,900 crore.

On Wednesday, the tribunal’s bench headed by its chairman, justice S B Sinha, asked DoT to file a reply to Qualcomm’s plea within two weeks. The next hearing is scheduled on October 20.

Qualcomm had filed a petition in TDSAT challenging the DoT’s letter for rejecting its application for an ISP licence, which a BWA player has to acquire after winning the spectrum in the auction. According to the rules, if the licence is cancelled, the government has the right to revoke the spectrum and keep the money.

Under the LOI given in July this year, Qualcomm was directed by DoT to apply within three months for the relevant licence — in this case in ISP category. DoT says this was not done. It also notes the company had applied for four ISP licences, when the rules allowed the nomination of just one company to apply for a Category ‘A’ -- an all-India ISP licence. Thus, it became another area where the rule was not followed. Subsequently, the firm wrote to DoT on September 9 expressing their willingness to apply for one instead of four licenses by merging the firms. However, this company’s decision came only after DoT’s decision to reject the ISP applications.

The firm, however, denied the charge of not having applied within three months, saying its locally incorporated companies applied for an ISP licence on August 9, 2010, well within the three-month window.

Backing Qualcomm, GSM operators had also written a letter to the government that the decision to cancel the licence of Qualcomm would “serve only to unsettle the key players tasked with rolling out broadband services”. The action, if pursued, will “only lead to a loss of an important player and will further lead to investment losses” in the country, the Cellular Operators Association of India told Communications minister Kapil Sibal.