Another hit: No 2G booty next fiscal with re-auction to take 400 days

Following the 4-month deadline set by the Supreme Court to cancel the 122 licences and wind up the operations of tainted mobile operators, telecom secretary R Chandrashekhar on Wednesday said the re-auction of these second generation (2G) spectrum and licences would take not less than 400 days to be completed.

While this puts a question mark on continuity of services of the telecom operators beyond the 4-month deadline, it also comes as a fell blow to the hopes of the government making any money out of the process to repair its overleveraged balance sheet next fiscal.

Meet Malhotra, former member on the legal panel of Telecom regulatory Authority of India (Trai), said the things may not play out for telcos that way because the government would approach the SC to extend the auction period.

“I believe the government will approach the SC not for changing the judgment but informing it that it would take longer for re-auctioning the licences and spectrum. So, it (delay in auction) will be taken as an administrative problem and the licences of the operators may not be cancelled in four months,” he said.

According to Malhotra, another way the operators could offer uninterrupted service would be by securing temporary licences from the government on a special basis till the time the rebidding process is completed.

The apex court, in its order last month, scrapped 122 licences and directed the government to hold re-auction on the lines of the 3G auction held in 2010. The 3G auction had been completed in 688 days.

Some of the telecom companies (telcos), impacted by the SC order, have filed a review petition. The government is awaiting recommendations from Trai on the auction process as directed by the court. The telecom regulatory body has already begun the process by inviting pre-consultation paper from operators, which will help it decide on reserve price, number of blocks, quantum of spectrum and other such issues before it submits its suggestions to the government.

On Wednesday, Chandrashekhar also said the government would decide this week on what legal actions it would take in view of the Supreme Court’s order to cancel telecom licences.