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Monday 6 February 2012

DoT examining legal implications of SC order before any action

Feb 6th 2012
DoT examining legal implications of SC order before any action
The Department of Telecom will study the legal implications of the Supreme Court order cancelling 122 2G telecom licenses before deciding on the future course of action.
"DoT has to first study legal implications of the order. It will require some time to understand and interpret the order before deciding on any action. As of now, we understand that the court has given some time by which the order has to be implemented," a DoT official said.

Last week, the apex court ordered the cancellation of 22 licences of Uninor (a joint venture between Unitech and Telenor of Norway), 21 of Loop, 21 of Sistema-Shyam (a joint venture between Shyam and Sistema of Russia), 15 of Etisalat DB (a joint venture between Swan and Etisalat of the UAE), six of S Tel and 21 of Videocon, besides three of the Tatas and nine belonging to Idea Cellular.

Asked whether the government is contemplating a review petition in the Supreme Court, sources declined to comment.

The new licences bundled with 2G spectrum (4.4 Mhz) were issued by former Telecom Minister A Raja in January, 2008, for Rs 1,658 crore for a pan-India licence.

When asked about the process for termination of licences and refund of fees deposited by telecom operators whose licences have been struck down by the apex court, the official said it is too early to say what action the DoT will take.

"As I see, the licences stand cancelled. The DoT has to follow the Supreme Court order, but we need to understand first what the department has to do. It will be decided only after all points of judgement are understood and legal interpretation is complete," the official said.

Telecom operators have claimed that they made huge investments in acquiring licenses and on infrastructure for rolling out services.

Sistema-Shyam claims to have invested over USD 2.5 billion (about Rs 12,500 crore) and Telenor claims to have already invested over Rs 6,100 crore in equity and over Rs 8,000 crore in corporate guarantees as a foreign investor that trusts a licence stamped by the government of India.

These two companies have asserted that they would take legal measures to protect their investments on Indian operations, with Telenor also evaluating an "alternative" plan to quit India.
TRAI begins process for 2G spectrum auction
Following the Supreme Court order, telecom regulator TRAI on Friday started the process of auction of 2G spectrum and issued a pre-consultation paper on the same seeking views of all stakeholders.
The apex court, in its verdict on Thursday, had asked Trai to adhere to the central government's focus on allocation of spectrum only through auction.
"Keeping in view the decision taken by the central government in 2011, Trai shall make fresh recommendations for grant of licence and allocation of spectrum in 2G band in 22 service areas by auction, as was done for allocation of spectrum in 3G band," Principal Advisor at Telecom Regulatory Authority Of India (Trai), Sudhir Gupta, said in a statement on Friday.
The Supreme Court in its order on cancellation of 122 2G telecom licenses has asked the government to seek fresh recommendations from Trai on allocation of licences and spectrum by way of auction.
The apex court has given the government a time-frame of four months to complete the process.
It is estimated that 536 Mhz of 2G spectrum will be freed following the cancellation of the 122 licenses.
Almost a year ago, Trai had recommended fixing the price for 6.2 Mhz of pan-India start-up 2G spectrum at Rs 10,972.45 crore, more than six times the cost of Rs 1,658 crore at which the spectrum was allocated to new players whose licences have been ordered to be cancelled by the Supreme Court.
The recommended spectrum price varied from circle to circle.
In case of contracted limit, the price ranges from Rs 7.60 crore per Mhz in Jammu and Kashmir to Rs 187.38 crore per Mhz in Tamil Nadu.
For the additional spectrum, the range is Rs 22.89 crore in Jammu and Kashmir to Rs 431.95 crore in Andhra Pradesh.
Gupta cited that Trai has already recommended that all future licences should be unified licences under 'Spectrum Management and Licensing Framework' guidelines of May 2010. Also, it has said that spectrum should be delinked from licence.
"Pursuant to this recommendation, 'Draft Guidelines for Unified Licensing Regime' were also placed on Trai website," Gupta said.
On the issue of 'Allocation of spectrum in 2G band in 22 Service Areas by auction', Trai has requested stakeholders to send their comments and suggestions on the issues involved by 15th February.
"Keeping in view the time bound nature of exercise, no extension of time will be given," Gupta said. (DD-3.2)

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