Failed bidders in fresh 2G auction to cease operation: SC

The Supreme Court on Friday held that telecom companies which were unsuccessful in availing fresh 2G spectrum and those which did not participate in the auction process will cease to operate "forthwith".

However, telecom companies which were successful in the fresh auction held on November 12 and 14, 2012 will be asked to start their services in the respective circles immediately, the court ruled.

"The telecom companies which have been unsuccessful in the bidding and those after the cancellation of the licenses did not participate in the fresh auction are directed to cease from continuing from operation forthwith and the successful bidders will immediately start in their respective circles," the court said.

A bench comprising justices G S Singhvi and K S Radhakrishnan directed that those telecom companies which were allowed to continue operation after scrapping of their licences by February 2, 2012 judgement will have to pay the reserved price fixed for the licences in the first round of the auction held in November 2012.

The apex court by its interim orders had extended the deadline for them to continue with the operation.

The bench clarified that the apex court's Feb 2, 2012 judgement will not be applicable on telecom companies holding the spectrum with 900 MHz band.

"The February 2, 2012 order will have no bearing on litigation relating to 900 MHz band," the bench said, adding that it (900 MHz band spectrum) was not the subject matter before it. The bench also directed to immediately put on fresh auction entire 2G spectrum for the licences cancelled by it.

The apex court had on 2^nd February 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 18^th January, 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 had not participated while Videocon won spectrum in six circles and Idea won spectrum in eight circles and Telenor got spectrum in six circles.

Earlier, the Centre had asked the court to consider allowing telecom operators, whose 2G licences were cancelled last year, to continue to operate after the 18^th January deadline with a condition that they "will be liable to pay" for the spectrum as per the proposed price of the upcoming auction on 11^th March.

The DoT had stated its stand in an affidavit which assumes importance as the court has permitted the telecom operators to continue to operate till 18^th January.

The DoT had asked the apex court to consider allowing it to grant "temporary licences" to such operators till the completion of the fresh bidding process.

The court by its various interim orders had allowed the telecom companies whose licences were quashed by the verdict to continue with the operation till the fresh auction for 2G spectrum was completed.

The bench had said allowing those who were unsuccessful and had not participated in the 2G GSM spectrum auction to continue with operation would generate more litigation.

It had said auction will have to be done for all those licences for the 2G spectrum for which letters of intent were issued on January 10, 2008 and were quashed by the apex court's February 2, 2012 judgement.

The bench had also said that it was only concerned with the 1800 MHz and 800 MHz band and not with 900 MHz band.

The apex court on 14^th January had extended till February 4 the January 18 deadline for existing operators of 2G spectrum to carry out operations. The deadline was further extended till further orders.

Prashant Bhushan, appearing for the NGO, Centre for Public Interest Litigation (CPIL), which was one of the PIL petitioners on whose plea the 2G licences were cancelled, had said existing operators should not be allowed to continue as consumers have the option to move to other service providers.

The apex court had on 27^th November last year said that the telecom operators, whose licences were cancelled by it but continued to operate due to delay on government's part to hold fresh auction of 2G spectrum, might have to pay for using the radiowaves on the basis of current price.

The apex court had on 2^nd February 2012, quashed 122 2G licences while allowing telecom operators to run their services for four months after which the order was to become operative.

The date expired on 2^nd May 2012 but the apex court allowed the operators to continue providing services as the Centre failed to put the spectrum on auction which was done only on 12^th November 2012.