TDSAT rejects pleas for licence extension

The telecom tribunal has dismissed the petitions of Vodafone India, Bharti Airtel and Idea Cellular seeking extensions of their licences in the 900 Mhz band in Delhi, Mumbai and Kolkata circles that are set to expire in November, dealing a blow to the operators' hopes of not having to participate in a potentially bruising spectrum auction to ensure uninterrupted services. "

We find no merits in the petitions which are accordingly dismissed," Chairperson Justice Aftab Alam of the two-member Telecom Disputes Settlement and Appellate Tribunal (TDSAT) ruled on 31 January. The tribunal also dismissed a similar plea by Loop Mobile, which however has chosen not to participate in the upcoming auctions starting February 3.

"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 ruled.

"Denial of extension of the licences 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 licences under the aforesaid provisions of their licences".

Bharti Airtel's mobile permits will expire in Delhi and Kolkata, while Vodafone India's licences are due in Delhi, Mumbai and Kolkata circles. Loop Mobile had sought that its license be extended in Mumbai circle, the lone area where it has operations, and Idea Cellular had moved the tribunal against the principal adopted by the telecom department to not extend licences automatically where they are due to expire.

The tribunal's verdict comes as a blow especially to India's top two operators Bharti Airtel and Vodafone India that hold substantial quantum of airwaves in the efficient 900 Mhz bands in Delhi, Mumbai and Kolkata, who will now have to bid aggressively in the auctions beginning Monday to win back their bandwidth holdings.

"Now the issue will be of getting back spectrum through auction, but there is no guarantee that they will get contiguous blocks of 10 Mhz, which has been a concern for telcos," said Rajan Mathews, director general of Cellular Operators Association of India, lobby group representing GSM mobile phone companies including Bharti, Vodafone and Idea.

Vodafone had offered Rs 4,000 crore to DoT and 3 per cent levy of spectrum usage charge on annual revenues for extending its licences in the three metros. The Indian arm of Vodafone Goup Plc and Bharti Airtel had in May last year moved the Delhi High Court that had directed DoT to hear the pleas of the companies. Airtel and Vodafone had urged DoT to extend their licences else million of customers would face complete breakdown of services. The department however rejected their pleas. Idea's licences in some circles are due for renewal next year; hence it could feel the impact of Friday's order later. Loop is not participating in this auction though the company said in a statement that it was "exploring all other possible options seeking extension of its license and continuation of its services in Mumbai." Bharti Airtel and Vodafone are likely to take a legal recourse and may appeal in the Supreme Court over the next week, people close to the thinking of the companies said.

However, the duo declined to comment. BK Syngal, senior principal at telecoms consultancy firm Dua Consulting said that the judgment has brought in lot of clarity for operators, just before the auctions begin February 3. "The judgment is in the right direction because extension of licences would have been possible on mutually agreed conditions, which could have been carried on for a long time. In the backdrop of auctions starting on Monday, this will bring some sense into the madness and now companies can bid for spectrum and get on with the business," he said.

The two-member tribunal also separately ruled that Reliance Communication and Tata Teleservices were not entitled to any additional spectrum as their dualtechnology license approvals have come under the scanner after the Supreme Court cancelled 122 mobile permits given to nine companies in February 2012, after they were found to be illegal. "We have no hesitation in holding that the approval for dual technology granted in their favour and the consequent amendments in their licences have come under cloud and it will be highly unsafe to make those licences the basis for allocation of additional spectrum which is scarce natural resource and an invaluable national asset," the judgment said.

However, Aircel and Dishnet have been allowed to get additional 1.8 Mhz. "The concerned authorities in DoT are accordingly directed to make available to Aircel and Dishnet the additional 1.8 MHz spectrum in the service areas as indicated in the opening part of the judgment, subject of course to the availability of spectrum in the respective service areas," the tribunal ruled.

Under the previous licensing regime ---Unified Access Services Licences --- telecom companies were allocated 4.4 Mhz of GSM spectrum to start mobile services. However, based on certain parameters, they could claim additional 1.8 Mhz. The policy has now been changed to Unified License under which spectrum has been de-linked from permits and will be auctioned. Tata Tele and RCom did not reply to ET's queries on whether they will appeal against this decision in a higher court.

Source: http://cablequest.org/news/telecom-news/item/4197-tdsat-rejects-pleas-for-licence-extension.html