The Delhi high court yesterday stayed all proceedings before the Telecom Regulatory Authority of India (TRAI) regarding Mahanagar Telephone Nigam Ltds plans to start cellular telecom services in Mumbai and Delhi. The telecom regulator had stayed MTNLs cellular foray on January 6, since the government did not ask for its recommendations on the companys plans.
The high court order means that TRAI will not be able to hear petitions pertaining to MTNLs cellular plans. The telecom regulator was to examine the merits of MTNLs proposed cellular plans at a hearing today. The hearing is likely to be adjourned in light of the court order.
The single-judge bench, consisting of Justice Usha Mehra, also allowed MTNL to carry out preliminary work on planning and designing cellular networks at its own risk. The operation of the cellular service, however, will be subject to a final order on MTNLs appeal against the TRAI order, the court ruled.
The case will come up for hearing before the court on April 13. The court also issued notices to respondents Bharti Cellular and Sterling Cellular, the Delhi cellular licensees. The companies had represented the cellular industry in challenging MTNLs cellular plans before TRAI last December.
The companies have been given two weeks to explain why MTNLs appeal petition should not be admitted in court. MTNL has been given another two weeks to reply to the respondents replies.
Private cellular operators have the option of appealing against Justice Mehras ruling to a two-judge bench in the high court, or to the Supreme Court. However, cellular industry sources said they would not exercise their option. We believe we have a strong case and will wait for the hearing on April 13, they said.
Additional solicitor-general K N Bhat and MTNL counsel Ashok Mathur yesterday contended that MTNL should be allowed to start preliminary work even before the final disposal of the case to avoid delays in the cellular project. The respondents counsel, Gopal Subramaniam, argued that status quo should be maintained in this regard till the next date of hearing.
The Delhi high court stay order comes as a shot in the arm for the telecom corporation, which can now proceed with its cellular network plans. The company has estimated the Mumbai and Delhi cellular markets to be collectively worth about Rs 2,600 crore a year by 2001.
MTNL had initially planned to float a global equipment tender as early as end-December 1997. The company intended to start cellular services in Mumbai and Delhi before the end of calendar 1998.
The cellular networks in Mumbai and Delhi are expected to cost $150 million (Rs 585 crore). We expect to install equipment by the second quarter of 1998 and start the service by the fourth quarter, MTNL chairman and managing director S Rajagopalan had said in December.
Cellular services are expected to contribute some Rs 60 crore to MTNLs revenues from 1999. The company earned a net profit of Rs 780 crore during 1996-97 on a turnover of Rs 4,050 crore. The government holds some 57.16 per cent in MTNL after its global depository receipts issue last November.
