12, ఫిబ్రవరి 2012, ఆదివారం

Uninor’s plea on spectrum auction and its implications


Uninor is the telecom company that got pan India license(22 licenses for all 22 circles) and consequent allocation of 2G spectrum in 2008. The Supreme Court cancelled total 122 licenses in its judgment on 2-2-2012 in which these 22 licenses of Uninor were included. Since the Supreme Court has cancelled these 122 licenses and spectrum allotted with these licenses, these companies have to close their operations after 4 months from the date of the judgment of the Supreme Court, i.e., by 1-6-2012. Thus the spectrum allotted to them along with their license will be released back by them to the government on 1-6-2012. The total spectrum to be released back to the Government due to the cancellation of these 122 licenses is estimated to be 546 MHz.

As per the Supreme Court judgment the spectrum thus released by the private companies whose licenses are cancelled, has to be auctioned. The guidelines for such auction should be announced by the Government within one month, based on the recommendations of the TRAI. To finalize its recommendations, the TRAI has released a consultation paper seeking the opinion on the modalities of such auction. The Uninor, whose license was cancelled by the Supreme Court, has submitted its views on the TRAI’s consultation paper. As per the views expressed by the Uninor, it is clear that it wants to continue in the telecom business by purchasing the spectrum by participating in the auction to be held  soon. Thus although the spectrum it got was cancelled by the Supreme Court(it will come into effect from 1-6-2012), even after 1-6-2012, it wants to continue in the business by purchasing the spectrum in the auction to be held soon.

The Uninor demanded that the incumbent operators whose licenses and spectrum allotment were not cancelled by the Supreme Court should not be allowed to participate in the auction for the spectrum and only thee operators whose licenses were cancelled and also fresh operators be allowed to participate. Uninor also demanded that the base price of the pan India spectrum (spectrum for all thee 22 circles) should be fixed as Rs 1658 crore(the rate discovered for pan India 2G spectrum in 2001 in the bidding). On this floor minimum, the auction should take place.The companies who thus participate in the auction and succeeded, should be given 6.2 MHz spectrum based on the price discovered in the auction.

Besides this, the Uninor demanded that all the companies who were given the license and spectrum allotment after 2001 should pay this amount for the spectrum with them, since though their licenses are not cancelled by the Supreme Court, they also got the spectrum without bidding. Thus, accoding to this demand of Uninor, all the companies whose licenses and spectrum were allotted in 2008 and cancelled by the Supreme Court on 2-2-2012 should be allowed to participate in the auction to get the spectrum afresh so that they can continue their services with the spectrum thus got in the auction. It also demands that the operators whose licenses and spectrum was allotted after 2001 and before 2008 also should be asked to pay for the spectrum with them, as per the rate to be decided in the auction to be held soon.  This is because these operators also got spectrum without participating in the auction.

While thus intending to purchase spectrum afresh in the auction and thus continue its business, the Uninor is also pressurizing the Government of India to protect its investment so far on the installation of its network and also to refund the amount of Rs 1658 crore entry fee paid towards spectrum, since the allotment of the spectrum was cancelled by the Supreme Court.

The other private operators also, whose licenses were cancelled by the Supreme Court, have been demanding for the same.

But whether the existing operators who were given license and spectrum in 2001 or before, by means of bidding, (Airtel, Vodafone etc) would agree for restricting the auction to those whose licenses were cancelled and also to the new applicants without demanding that they also should be allowed to participate in the auction to get the additional spectrum required by them? This has to be seen.

On 10-2-2012 a high level meeting was held where in the Prime Minister,the Finance Minister, the Home Minister, the Law Minister,  the Communications Minister, the law minister, thee telecommunications minister, the Attorney-General and the DoT Secretary on the issue of the Supreme Court judgment for cancelling the 122 licenses and the fallout of the judgment. The aim of this meeting is to give the detailed information on the Supreme Court Judgment and its effects, to the Prime Minister and others. Finally a decision has to be taken by the Cabinet.

Whether the Cabinet will take decision favoring the companies whose licenses are cancelled, by agreeing to their demand for protecting their investment and allow only them in the auction excluding the existing operators—we have to wait and see. 

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