Supreme Court verdict on 2G: Response from Telcos

By Telecom Lead Team: New
mobile operators have expressed shock over the Supreme Court verdict to cancel
122 licences.


Since these operators spend
huge money for getting licences and launching telecom services, they may file
review petition.


Review petition is important
as the prime minister’s office is unlikely to step in to save the telecom
industry which is going through a tough phase.


Telecom equipment vendors
are also feeling the pressure as these operators are expected to spend around
$1.5 billion as capital expenditure in 2012.

Sistema Shyam (MTS India) and Telenor said that they have been unfairly treated
claiming that they simply followed the government process for acquiring

“Sistema-Shyam is still awaiting the full text of the judgement… The
company would like to state that being a law abiding organisation, it reserves
the right to protect its interests by using all available judicial
remedies,” SSTL said in a statement.


Uninor expressed shock on
the verdict and said, “We have been penalised for faults the court has
found in the government process.”

Idea Cellular said: It is unfortunate that a serious incumbent operator like
Idea Cellular is being made to suffer due to this cancellation of licenses,
despite being fully compliant at each stage of the license allocation process.
As per information available from the media, we understand that the license
holders are allowed to continue operations for the next 4 months and an auction
will be conducted for these licenses within this period. We will study in
detail the above Supreme Court judgment and explore all possibilities to
protect our investment.”

The COAI said it
always stood by the principle of spectrum pricing via fair market-price based


We find it
unfortunate that the large investments made by many operators in network,
services, staffing and training are now in jeopardy for no apparent fault of
theirs. It is imperative that the executive is sensitive to these issues and
ensure that the misdeeds of a few are not visited on the many. This is vital to
ensure the financial health, sustainability and growth of an industry which is
critical to the growth of the nation and the wellbeing of its citizens,” said
Rajan S Mathews, director general, COAI.


We are hopeful that a
balanced approach will be adopted by the government, keeping in view the
interests of the consumers, suppliers as well as the investor community. We
will examine the ruling in detail to understand its implications and are committed
to working closely with the government to ensure that the interests of the
customers and the investors in the industry are protected,” Mathews added.

Official statement from RCOM said, “Reliance Communications’ licenses were all issued in 2001 and prior. RCOM’s licenses are not affected by the Supreme Court judgment pronounced today.”

Etisalat, however, said, “The Supreme Court decision relates to events that occurred
in January 2008, well before December 2008 when Etisalat invested in Swan.
Etisalat has no knowledge of what occurred in the license application process
for Swan, far less did it have any involvement. The licence applications were
entirely conducted by the promoters and their associates who subsequently
marketed the Swan investment opportunity to Etisalat through a well-known
international investment bank.”


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