Apex court gives till Feb 4 for cancelled licencees to operate

Telecom operators whose licences were cancelled on February 2 last year got time to continue till February 4 from the Supreme Court.

The time was given as the court wanted certain answers from the government on the status and floor price of the coming re-auction of 2G spectrum.

The bench of judges G S Singhvi and K S Radhakrishnan passed the order after hearing the government, which wanted the licencees to be allowed to continue till the auction scheduled for next month.

The decision today will help Sistema Shyam Teleservices, the Indian unit of Russia's Sistema, to continue operations beyond the January 18 deadline in the 21 services areas that were quashed. It also allows the Indian unit of Norway's Telenor to continue operations in Mumbai.

 

The court asked the government to provide the names of the bidders who’d succeeded in the November auction. It also wanted to know the reserve price for the coming auction. Those who’d not participated in the auction of the cancelled licences, they made clear, would not be allowed to continue and take advantage of the situation. In fact, they would have to pay for the extended time they enjoyed the benefit.

Last year, the SC had found illegality in the allotment of spectrum and cancelled 122 licences. Though it allowed four months for the order to come into force, the government sought more time to complete the auction.

This was granted but the extra time was also not sufficient for the department of telecom (DoT).

The department said the reserve price had to be lowered because there were no bidders in certain sectors. Counsel P P Rao said the revised price would be about 30 per cent less than the previous one. When the judges asked him how many companies had stopped operations after the last year’s judgment, there was no ready answer. It will be provided at the next hearing. The court will also take up the question of excess spectrum available after the mass cancellation. The judges insisted the entire spectrum available must be auctioned.

Telecom companies, represented by senior counsels Harish Salve and Abhishek Singhvi, said the offer of the government was not attractive and some of these went against the rules laid down in last year’s judgment. The auction price was so unattractive that some companies, like the Tatas and Sistema, had shown little interest in the re-auction. The former has already told its customers in certain circles that it was closing CDMA operations. Some operators have only about 1,000 customers. Though it made no economic sense for many of these to continue, the department was pressing them to provide services and threatening penal action.

The judges said that those who do not want to continue could wind up. They told the government counsel that if it reduced the price, it would lead to another round of litigation. Therefore, the court asked the government to come with clear answers at the next hearing.

Sistema Shyam Teleservices did not want to comment on the SC order.

The Telenor Group stated it might decide to participate in the second round of auctions and Uninor’s services will continue in Mumbai, in line with the licence extension announced by the Supreme Court. The company secured spectrum for six telecom zones — UP (East), UP (West), Bihar and Jharkhand, AP, Maharashtra and Gujarat — in the November auction.

It has decided to exit from the Kolkata and West Bengal circles, where no additional 1800 MHz spectrum auction was expected.