The Supreme Court on Friday refused to stay the auction of spectrum scheduled for February, as sought by Vodafone India and Bharti Airtel.
While Vodafone wanted extension of its licences by another 10 years in six telecom circles — Maharashtra, Gujarat, Haryana, Kerala, Rajasthan and Uttar Pradesh (east), Bharti had sought such extension in five circles. The licences, given by DoT for a period of 20 years, are due to expire in December 2015.
A bench headed by Justice Anil R Dave while tagging the appeals with similar pending pleas refused to restrain the government from spectrum auction that will take place in February. However, without passing any order, it observed the parties can negotiate after the companies vehemently argued they were ready to pay the auction discovered price for their share of spectrum.
Even similar petitions filed earlier by Vodafone, Airtel and Idea Cellular seeking extensions of licences in the 900 Mhz band in Delhi, Mumbai and Kolkata circles are pending before the court.
Vodafone in the present petition had challenged DoT’s order that rejected its request for extension of its licences for six circles and asked the operator to obtain spectrum through auction.
Counsel KK Venugopal, appearing for Vodafone, argued the department had no legal right to put the allocated spectrum to auction as the service provider is entitled to extension of its licences along with already allotted spectrum “on fair and reasonable terms” for its continued usage. Besides, the National Telecom Policy-2012 issued by the government delinking spectrum from the licence is applicable only to “new licences’ and not “existing licensees,” he said, adding Vodafone has a subscriber base of 71 million and had made an investment of Rs 19,535 crore.
“Delinking spectrum in respect of present licences is not fair as a licence has now become a piece of paper without spectrum. Let them (DoT) fix whatever price they want, I am ready to pay. Don’t take away my 900 Mhz band spectrum. I will be left high and dry. We will be out of business completely,” Venugopal argued on behalf of Vodafone.
Senior counsel AM Singhvi, appearing for Bharti, also sought to declare a part of the 2012 policy that applied to the existing licensees as “unconstitutional and void” and wanted to restrain DoT from taking away, divesting and creating third party rights under the existing policy/contract, including its already allocated spectrum.
Stating that Bharti has made an investment of Rs 25,500 crore and has a 213 million subscriber base in all 22 telecom circles, Singhvi further submitted that it should have the right to the spectrum it already owned if it agreed to pay the auction-discovered price. He added: “You (DoT) don’t give me slight preemptive edge. Your interest is to get the best auction discovered price. I undertake for Bharti to pay that… You (government) are encouraging fly-by-night operators and depriving an existing licensee. Without any protection, I have chance to lose everything.”
Earlier, DoT accused Vodafone of concealment of material facts saying its contention regarding making investments on the basis of a reasonable expectation of extension by another 10 years was “demonstrably false”.
Asserting the government’s power to frame policy to regulate telecom, DoT stated that Vodafone has sought to challenge a policy decision to delink spectrum from telecom licences, which gave effect to the apex court judgment in the 2G case, mandating auction as the method to allocate spectrum.