The Supreme Court on Tuesday extended the deadline for cancellation of telecom licences of new operators by nearly three months to September 7. Besides, it directed the government to conduct the auction by August 31.
The court had on February 2 ordered the cancellation of 122 new licences issued in January 2008 by then telecom minister A Raja, currently under judicial custody. It had also ordered the licences quashed by June 2 and directed the government to conduct an auction of the vacated spectrum.
However, the government had filed a clarificatory petition, saying the auction process would take at least 400 days.
A bench of Justice G S Singhvi and Justice K S Radhakrishnan on Tuesday said, “In our view, it will be just and proper to partially accept the averments made in the application (by the Centre). Accordingly, the time specified for conducting the auction and grant of licences is extended up to August 31, 2012.”
The bench said its February 2 order cancelling 122 licences, allocated during the tenure of A Raja, would remain operational. The court also remarked on the government’s arguments, “You ask for 400 days. That is your prayer. How much time did you take to complete the process in 2008? The entire exercise could have been avoided if a little more effort had been made.”
Department of Telecommunications (DoT) Secretary R Chandrashekhar said, “We have been speeding up the process internally. We had indicated the auction schedule in our petition to the court. Some process might take more time and some less; we’ll get to know exactly only when the auction process starts. But we’ll try to adhere to the directions and inform the court accordingly of our plan.”
The impacted companies, including Uninor, a joint venture (JV) between Norway’s Telenor and Unitech Group, and Sistema Shyam Teleservices, a JV between Russia’s Sistema and Shyam Group, both welcomed the direction.
In a statement, Uninor said, “We welcome the fact that the court has ensured speedy auctions and allowed our operations to continue till such time. August 31, however, also means the government must move fast to review some of the recommendations that are otherwise certain to have a catastrophic impact on the industry and on tariffs for the common man. Issues on which there is already an industry consensus can be resolved very quickly.”
Sistema Shyam said, “The order comes as a huge relief to our customers, employees, investors and all members of the telecom ecosystem. In the interest of more than 70 million affected customers, including our more than 16 million customers, the company had filed an application before the Supreme Court, seeking a clarification that quashing of the licences would become operative simultaneously with the conclusion of the grant of licences and auction process for the allocation of 2G spectrum.”
Cellular Operators’ Association of India (COAI) Director General Rajan S Mathews said, “It is a short-term reprieve for the operators impacted but it does not solve the problem because DoT has said it needs 400 days to complete the auction. The affected operators will have to shut operations and customers will have to move to other networks if the auction is not conducted early.”
The cancellation will impact 40 million customers of Uninor, 16 million of Sistema, six million of Idea Cellular and 5.5 million of Videocon, among others.
Telecom regulator Trai had directed companies S Tel and Etisalat to continue operations until their licences expired. Both companies had asked their customers to shift to other service providers and announced they were ending services after the apex court quashed their licences.
