Apex court refuses to stay spectrum auction

Tags: News

Airtel, Vodafone, Jio, 5 others to bid today

The Supreme Court on Sunday refused to interfere with the order of telecom tribunal dismissing the pleas of Bharti Airtel, Vodafone, Loop and Idea for a stay on spectrum auction starting today and an extension of their licences by another 10 years.

However, in an extraordinary urgent hearing on Sunday, a bench comprising justices AR Dave and SA Bobde admitted the appeals filed by Airtel and Vodafone challenging the January 31 order of the telecom disputes settlement and appellate tribunal (TDSAT).

“The appeal is admitted and hearing is expedited,” the bench said after the Centre opposed the appeals saying “any observation from you (apex court) can scare away other bidders and can take away the vibrancy of the spectrum auction.”

The department of telecom (DoT) has put on the block around 385 MHz of radiowaves in the 1800 MHz band, and 46 MHz in the 900 MHz band. DoT has reduced the quantum of spectrum to be sold in 1,800 MHz band in 10 circles, including Delhi, Kolkata and Mumbai, from about a total of 403 MHz planned earlier.

Bharti Airtel, Vodafone, Reliance Jio Infocomm and five other telecom firms will battle it out at the spectrum auction, from which the government expects to garner at least Rs 11,300 crore.

The final list of bidders also includes Idea Cellular, Telewings (Uninor), Reliance Communications (RCom), Tata Teleservices and Aircel. Three companies have been found to be ineligible for bidding in certain service areas. Vodafone India will be unable to bid in seven circles, RCom in eight and Tata Teleservices in Delhi.

The government has to conduct this third round of spectrum auction following a Supreme Court order in 2G case directing that all the radiowaves freed from the cancellation of 122 licences in February 2012 should be auctioned.

“We are very confident that these auctions are going to be successful and we are very confident all the spectrum that is to be auctioned will be sold,” telecom secretary MF Farooqui has said.

Senior advocates Mukul Rohatgi and Abhishekh Singhvi, appearing for Airtel and Vodafone, respectively, contended that the existing licences for the spectrum to them should be extended instead of putting them on auction.

While Rohatgi submitted that the apex court should ask the telecom department not to declare the result of the auction till it decides the appeals, Singhvi contended that Vodafone was having the licence for 20 years since 1994, so it has the right over the spectrum and the licence should be extended for another 10 years.

However, the bench observed, “It does not mean that you should have a monopoly.”

Telecom companies made arguments in the apex court identical to those before the tribunal saying they have made huge investments ranging into several crores of rupees, and hence, had the legitimate expectation for the extension. Any such denial was “illegal and unreasonable,” they said adding that it would also result in the discontinuance of service to their subscribers.

The TDSAT had rejected their plea saying, “The petitioners have failed to establish their right for extension in terms of the relevant provisions in their licences, the matter ends there.”

The tribunal had held that it was satisfied with the reason based on which DoT had denied extension and had asked telcom companies to participate in the spectrum auction starting February 3.

“Denial of extension of the licences to the petitioners is based on good reasons as envisaged under clause 4.1 of the UAS licence and the relevant provision in the CMTS licence and the petitioners can claim no right for extension of their licences under the aforesaid provisions of their licences,” TDSAT had said in its order.

It had further observed that “any extension of the expiring licences was bound to undermine the implementation of the policy and that is justification enough and sufficient for the government to decline the extension for the licences”.

Vodafone and Bharti Airtel are participating in the coming auction and are shortlisted as eligible bidders. Their licenses are expiring by November end this year on completion of the 20-year period as per licence conditions.

However, their participation is without prejudice to their rights and contentions in the petitions pending before TDSAT as per the order passed December 20, 2013. Loop, which operates in the Mumbai circle, has not participated in the auction process as it was waiting for the outcome of this petition. Idea's seven licences would expire in December 2015. Vodafone’s licence is expiring for Delhi, Mumbai and Kolkata circles while for Airtel it is Delhi and Mumbai circles. Airtel, Vodafone and Loop’s spectrum belong to 900 mhz band and a relatively very small portion to 1,800 mhz band.

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