New operators shocked by SC verdict; may file review petition

Jolted by the Supreme Court’s judgement that cancelled 122 telecom licences issued in 2008, the new operators today expressed shock over the verdict and indicated that they may file review petition. The affected companies whose licences are cancelled include Uninor (joint venture between Unitech and Telenor of Norway), Sistema-Shyam (joint venture between Shyam Telecom and Sistema of Russia), Videocon, Loop Telecom, Idea Cellular, Etisalat DB (joint venture between DB Realty and Etisalat of UAE) among others. Sistema-Shyam, which offers mobile services under the MTS brand and Unitech-Telenor joint venture that provides services under brand Uninor have made huge investments for rolling out the services across the nation. [caption id=“attachment_201791” align=“alignleft” width=“380” caption=“Reuters”]  [/caption] The companies have said that they have been unfairly treated claiming that they simply followed the government process for acquiring licences. “Sistema-Shyam is still awaiting the full text of the judgement… The company would like to state that being a law abiding organisation, it reserves the right to protect its interests by using all available judicial remedies,” SSTL said in a statement. Uninor expressed shock on the verdict and said, “We have been penalised for faults the court has found in the government process.” The new licences bundled with 2G spectrum were issued by former telecom minister A Raja in January 2008 for Rs 1,651 crore for a pan-India licence. On this, the government auditor CAG had assumed a presumptive loss of revenue of up to Rs 1.76 lakh crore to the exchequer. According to estimates, cancellation of these licences may free about 500 Mhz of 2G spectrum which may be auctioned by the government. Leading service provider Idea Cellular said the company was unnecessarily caught in this situation of cancelled licences just because they were granted in January, 2008, which was as late as 18 months from the date of application. “It is unfortunate that a senior incumbent operator like Idea Cellular is being made to suffer due to this cancellation of licenses, despite being fully compliant at each stage of the license allocation process,” Idea Cellular said in its strongly worded reaction. Norway-based Telenor, majority stake holder in Uninor, said, “We look to the government to arrive at a fair outcome that doesn’t jeopardise our lawful investments.” Sistema-Shyam claims to have invested over USD 2.5 billion (about Rs 12,500 crore) so far for acquiring licences and rolling out services. Telenor claims to have already invested over Rs 6,100 crore in equity and over Rs 8,000 crore in corporate guarantees as a foreign investor that trusts a licence stamped by the government of India. The GSM operators lobby group COAI said, “It respects the Supreme Court decision. At the same time, it is imperative that the government is sensitive to the huge investments that have gone into the sector… We are hopeful that a balanced approach will be adopted by the Government keeping in view the interest of all the stakeholders. PTI