Wednesday, Sep 24, 2014

SC quashes plea by Airtel, Vodafone and others, government gets all-clear for Monday’s spectrum auction

Court’s refusal to stay the auction puts operators like Bharti Airtel and Vodafone India, under pressure to bid aggressively to regain their bandwidth holdings. (PTI) Court’s refusal to stay the auction puts operators like Bharti Airtel and Vodafone India, under pressure to bid aggressively to regain their bandwidth holdings. (PTI)
Written by Utkarsh Anand | New Delhi | Posted: February 2, 2014 9:49 pm | Updated: February 2, 2014 10:00 pm

Stating that telecom companies cannot have a “monopoly of unlimited licence holding”, the Supreme Court on Sunday rejected an appeal by Bharti Airtel, Vodafone, Loop and Idea for a stay on the spectrum auction which is scheduled to begin on Monday.

In a relief for the government, a bench of Justices A R Dave and S A Bobde allowed an urgent hearing to the companies but refused to restrain the Centre from going ahead with the auction which is expected to raise Rs 49,000 crore.

Denying interim relief to the companies, the bench said they may have the “wrong notion” that spectrum belonged to them for an indefinite period, whereas the fact is that it was allocated to them only for a specific period of 20 years. It said holding the licence for a long period does not mean that the companies have a “monopoly of unlimited licence holding”.

The bench, however, agreed to hear the companies at length on the legal aspect of the matter, admitting their appeals against the order of the telecom tribunal and expediting the hearing of the matter.

The telecom operators had approached the Supreme Court for a stay of spectrum auction and extension of their licences by another 10 years. During the hearing, senior counsel A M Singhvi and Mukul Rohtagi, appearing for Vodafone and Bharti respectively, argued that the companies had a legal and contractual right to get extension of their licences. They said the companies were willing to pay a fair market-determined price for the spectrum already allocated to them, and hence there was no real need for an auction.

However, Additional Solicitor General K V Vishwanathan opposed their contentions, saying the government could not hold “mock” auctions if these companies were allowed to keep the spectrum with them. He also urged the court not to pass any interim restraint order, saying it would  scare away other bidders and could also take away the vibrancy of the spectrum auction.

The court’s refusal to stay the auction puts operators like Bharti Airtel and Vodafone India, which hold substantial quantum of airwaves in the efficient 900 Mhz bands in Delhi, Mumbai and Kolkata, under pressure to bid aggressively to regain their bandwidth holdings.

The licences of Vodafone and Bharti Airtel expire in November this year on completion of the 20-year period. Idea’s seven licences will expire in December 2015. Loop, which operates in the Mumbai circle, has not participated in the auction process as it was waiting for the outcome of this petition.

The Telecom Disputes Settlement and Appellate Tribunal had on Friday dismissed the operators’ plea and denied extension of their licences, saying the operators had for years been holding the spectrum in excess of the contracted quantum. It said the operators held licences in the most premium band on rates fixed in 2001.

The tribunal said 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 February 3.

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