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Supreme Court: Auction for 2G spectrum can take place, but outcome subject to final orders

The order would be applicable to the auction process for all the 17 circles for which Notice Inviting Applications was issued on January 9.

Written by Utkarsh Anand | New Delhi |
February 27, 2015 1:25:48 am

The Supreme Court on Thursday said that the outcome of the upcoming auction of 2G spectrum shall not be finalised without its final order, as it examines issues arising out of the tendering process.

A bench led by Justice Dipak Misra, however, allowed the government to go ahead with the auction scheduled from March 4 but placed a caveat that no rights would be created in favour of successful bidders until the court finally decides on a batch of petitions pertaining to the auction.

The order would be applicable to the auction process for all the 17 circles for which Notice Inviting Applications was issued on January 9.

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The court underscored “a prima facie inconsistency in the stand of the government” but said it would not stay the auction as sought by a few telecom companies, since the auction may help it understand some issues. The controversy arises from a tender condition stipulating that an existing operator, whose licence is coming to an end in 2015-16 or a new operator, could bid for a minimum of 5 MHz of spectrum.

However, on their petitions, the Tripura High Court had on February 12 modified this condition, permitting Reliance Telecom and Bharti Hexacom to make two bids — one online and other offline — for 4.4 MHz, and other for 5 MHz of 2G spectrum in 900 MHz band for the North-Eastern states.

Three other high courts — Allahabad, Delhi and Karnataka, also entertained similar challenges, compelling the government to move the Supreme Court. The bench agreed to transfer all the cases to itself and started hearing the arguments on Thursday.

During the arguments, the court noted inconsistencies in the policy relating to the entities that presently hold 4.4 MHz. The government said they would have to top it up by bidding for a minimum of 0.6 MHz to take it to the mandatory 5 MHz.

However, while the licence for 4.4 MHz may expire in 2017 for companies like Dishnet and BSNL in the north-eastern states, they would continue to hold 0.6 MHz for the next 20 years even if they fail to get an extension.

A submission by the government that they could trade the 0.6 MHz did not cut ice with the court, which noted that the top-up spectrum should be co-terminus with the existing spectrum.

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