SC order directly binding on telcos: DoT source

Telecom firms which did not win any mobile phone spectrum after their licences were cancelled by the Supreme Court, may have to the shut shop with immediate effect.

With Supreme Court refusing any relief to telecom companies which figured in the 122 licences cancelled in Feburary last year, the Department of Telecommunication (DoT) feels there is no scope left for firms that did not win any airwaves in the November spectrum auction.

"Prima facie it seems so that they (quashed licences) will have to immediately close down their operations. Supreme Court order is directly binding on them and we don't need to issue separate order for this. If they continue operations then it will be illegal," a source at DoT said.

The source, however, said that DoT can ascertain action to be taken by it only after it receives legal opinion from its team.

Post Supreme Court order of February 2, 2012, telecom companies Uninor, Sistema Shyam (SSTL), Videocon and Tata Teleservices (TTL) were allowed to continue operations to enable them to buy spectrum in the planned auction.

Out of these, only Uninor and Videocon participated in auction and won spectrum in 6 circles each. SSTL and TTL did not participate in the auction.

SSTL in a statement said that it has "filed an application dated January 10, 2013 in the Supreme Court saying that the company wants to continue its operations and intends to participate in upcoming auctions in March 2013. The Supreme Court is going to give a separate order on the same. The said order is awaited."

On SSTL, the DoT source said "from initial observation, it seems so (SSTL will have to close operations). There official statement is not binding on government unless court tells us something or there lawyer gives us in writing."

Government has also proposed before Supreme Court that will issue temporary licences for quashed permits who are interested to participate in March 2013 auction but the DoT source said the department will have to take legal opinion on the apex court's order to see if there is any scope to issue such licences.

"There is no change of intention but whether SC order permits it , will be known after legal opinion," the source said.

Following the court order, government may increase quantum of spectrum in four circles in 1800 MHz band for the upcoming auction to comply with Supreme Court order which directed it auction entire 2G spectrum freed through licences cancelled by it. 

"DoT may increase quantum of spectrum in upcoming auction in Rajasthan and Karnataka for 1800 MHz to include spectrum that was vacated by licence cancellation. For rest of 18 circles it may go for third round of auction to sell rest of spectrum vacated through licence cancellation," sources said.

The government has announced it will auction 15 megahertz of airwaves each in Delhi and Mumbai in 1800 Mhz band, currently used for 2G GSM services, where as 4.4 Mhz and 13.2 Mhz of spectrum was released through quashed permits.

The government, sources said, does not expect significant realisation from sale of rest of spectrum based on the November 2012 auction experience, which saw no excess demand for spectrum in any circle over the quantum of spectrum that was put for sale.

The government has announced auction of 10MHz each in Karnataka and Rajasthan but spectrum freed from cancellation of licences in these circles was 22 Mhz and 17.6 Mhz respectively.

The DoT source said there will be no impact on schedule for 900 Mhz spectrum auction in March. The 900 Mhz spectrum qunatum includes amount of airwaves in this band held by Bharti Airtel, Vodafone and Loop Mobile through their licences that are due for renewal in 2014.

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