2G: Put all quashed licences for auction, failed bidders out, orders Supreme Court

The Supreme Court on Friday directed that the "entire" licences quashed by it for 2G spectrum be auctioned without "further delay" and those Telecom firms which were unsuccessful and did not participate in the auction process will cease to operate "forthwith".

The apex court also held that those companies which benefited by its interim orders to continue with operations following the quashing of their licences by its February 2, 2012, verdict will have to pay the reserve price fixed by the government for the purpose of conducting auction in November 2012.

It said the successful bidders should be allowed to operate in those circles/areas where the existing service providers have lost the licences.

A bench of justices GS Singhvi and KS Radhakrishnan clarified that its directions will have no bearing on the allotment of spectrum in 900 MHZ band which was not the subject matter of the petitions leading to scrapping of 122 licences for 2G spectrum in 22 circles.

The bench also clarified that the liabilities of those telecom companies which on scrapping of their licences discontinued their operations since the date of judgement will be decided separately.

In its 12-page order, the bench said, "We have considered the respective submissions. In our view, once the licenses granted to the private respondents on or after January 10, 2008, and subsequent allocations of spectrum were quashed by this court, the government is duty bound to auction the entire spectrum, which became available as a result of such quashing and it cannot avoid compliance of the court's order in guise of acting on the recommendations made by TRAI."

While acting tough on the telecom companies, which took benefits of its interim orders, the bench said, "Such of the licencees, who continued operations after February 2, last year, whether or not they gave bid in the auction conducted on November 12 and 14, 2012, shall pay the reserve price fixed by the government for the purpose of conducting auction in November 2012.

"The licencees, who did not give bid in the auction conducted on November 12 and 14, 2012, or who remained unsuccessful shall forthwith discontinue their operations in the concerned circles/areas and the successful applicants should be allowed to operate in those circles/areas."

The bench also clarified about the telecom companies which opted out to provide service after the cancellation of the licenses by saying, "The issue relating to liability of the licensees, who discontinued their operations between February 2, 2012 and this date (today) shall be decided separately."

The apex court said since the issue relating to the allotment of the spectrum in 900 MHZ band was not the subject matter before it, the legal issue arising on it could be decided by "competent judicial or quasi judicial forum".

"Since the issue relating to allotment of spectrum in 900 MHZ band was not subject matter of consideration in the writ petition, we deem it proper to make it clear that judgement dated February 2, 2012, will have no bearing on the litigation, if any, filed in the matter of allotment/re-allotment of spectrum in 900 MHZ band and the competent judicial/quasi judicial forum shall be free to adjudicate upon the pending matter or which may be filed hereinafter in relation to the allotment of spectrum in 900 MHZ band and connected issue," it said.

The apex court had on February 2, last year cancelled 122 licences for 2G spectrum and had directed the Department of Telecommunication (DoT) to hold fresh auction for them within four months. The deadline was extended by its interim orders from time to time.

As per the apex court order, 21 licences of Sistema Shyam Teleservices (MTS), 16 permits of Telenor controlled Uninor, 15 of Videocon and 3 CDMA permits of Tata Teleservices were to stand cancelled from January 18, affecting around 25 crore subscribers in the country.

Telenor is in the process of transferring the business of Uninor in 6 circles to new entity Telewings Communications, which recently won spectrum in fresh auction.

In the November 2012 auction, five telecom operators -- Bharti Airtel, Vodafone, Telenor-promoted Telewings, Videocon and Idea Cellular -- had applied for participating in the auctions.

Sistema Shyam Teleservices Ltd (SSTL) had not participated while Videocon and Telewings won spectrum in six circles each.

Idea won spectrum in eight circles.

SSTL has said that the company wants to continue its operations and intends to participate in the upcoming auction in March, 2013.