Supreme Court rejects telcos’ pleas to stay spectrum auction
4 Feb 2014 3:56 AM IST
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 which is starting Monday and extension of their licences by another 10 years.
Bharti Airtel, Vodafone, Reliance Jio Infocomm and five other telecom firms will battle it out at the spectrum auction on Monday, from which the government expects to garner at least Rs 11,300 crore. 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 1800 MHz band in 10 circles, including Delhi, Kolkata and Mumbai, from about a total of 403 MHz planned earlier.
However, in an extraordinary urgent hearing on Sunday, a bench comprising justices A R Dave and S A Bobde admitted the appeals filed by Airtel and Vodafone challenging the 31 January 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'.
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 that '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 its 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 the Department of Telecom (DoT) had denied extension and had asked telcom companies to participate in the spectrum auction starting 3 February. 'Denial of extension of the licenses to the petitioners is based on good reasons as envisaged under clause 4.1 of the UAS license and the relevant provision in the CMTS license and the petitioners can claim no right for extension of their licenses under the aforesaid provisions of their licenses,' TDSAT had said in its order.
It had further observed that 'any extension of the expiring licences is bound to undermine the implementation of the policy and that is justification enough and sufficient for the government to decline the extension for the licenses'.
Licences of Vodafone and Bharti Airtel 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 20 December, 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 1800 MHz band.
Bharti Airtel, Vodafone, Reliance Jio Infocomm and five other telecom firms will battle it out at the spectrum auction on Monday, from which the government expects to garner at least Rs 11,300 crore. 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 1800 MHz band in 10 circles, including Delhi, Kolkata and Mumbai, from about a total of 403 MHz planned earlier.
However, in an extraordinary urgent hearing on Sunday, a bench comprising justices A R Dave and S A Bobde admitted the appeals filed by Airtel and Vodafone challenging the 31 January 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'.
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 that '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 its 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 the Department of Telecom (DoT) had denied extension and had asked telcom companies to participate in the spectrum auction starting 3 February. 'Denial of extension of the licenses to the petitioners is based on good reasons as envisaged under clause 4.1 of the UAS license and the relevant provision in the CMTS license and the petitioners can claim no right for extension of their licenses under the aforesaid provisions of their licenses,' TDSAT had said in its order.
It had further observed that 'any extension of the expiring licences is bound to undermine the implementation of the policy and that is justification enough and sufficient for the government to decline the extension for the licenses'.
Licences of Vodafone and Bharti Airtel 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 20 December, 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 1800 MHz band.
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