Strengthened by the Supreme Court's February judgment cancelling 122 2G licences issued by the jailed ex-Telecom Minister, A. Raja, a coalition of GSM mobile phone giants has dragged rivals Reliance and Tata to court, demanding that their licences also be revoked.

“We have filed a fresh petition that places additional factors arising as a result of the recent 2G ruling for the consideration of the Supreme Court,” says Rajan Mathews, director-general of the Cellular Operators Association of India (COAI). “Our plea is that our old petition be clubbed with the new one and the hearing of the case, which is pending for over a year, be accelerated.”

The COAI represents a coalition of operators using GSM technology, including Bharti, Vodafone, Idea, and Aircel.

The controversy relates to the grant of precious GSM spectrum to Reliance and Tatas in 2007-08 by Mr. Raja under what is known as the “dual technology regime.” Until then, these two operators, who received licences between 2001 and 2004, offered mobile services solely on the rival CDMA platform.

On August 28, 2007, the Telecom Regulatory Authority of India recommended that GSM spectrum be granted at 2001 prices to CDMA operators and vice versa under the dual technology regime.

Mr. Raja announced his decision to follow this recommendation on October 19, 2007. In January 2008, Reliance, Shyam and HFCL were granted GSM spectrum based on their applications that were filed earlier in 2006-7. The Tatas, who applied on November 22, 2007, received spectrum between April 2008 and May 2009.

Initially, both Reliance and Tatas stood together in defending dual technology issues. However, Tatas later complained of discrimination and delays by Mr. Raja by questioning how other CDMA operators such as Reliance were granted GSM spectrum even though the Tatas were the first to file an application after the announcement of the policy.

GSM operators responded by petitioning the Telecom Disputes Settlement Appellate Tribunal against dual-technology operators in November 2007 itself. Their plea was rejected, but appeals were filed and have now made their way to the Supreme Court.

Supreme Court findings

Three findings of the Supreme Court have encouraged GSM operators to escalate their attack.

First, the Supreme Court found that TRAI's recommendations on allocation of spectrum overlooked the objectives of the National Telecom Policy of 1999 and were non-transparent. Secondly, the Court held that that spectrum ought to have been allocated through a market-determined process, preferably auctions, rather than given at a 2001 price. Thirdly, the Court found that the actions of the Department of Telecommunications officials under Mr. Raja's leadership were wholly arbitrary, capricious and contrary to public interest.

The Supreme Court, in an earlier order issued on December 16, 2010, also instructed the Central Bureau of Investigation to investigate and register an FIR in the dual technology case, but 14 months later, the agency has failed to act.

With this, dual technology licences now face an attack on three fronts: the original petition, the Supreme Court's December order, while a potential third attack arises if the government raises the question of the legality of dual technology in its proposed Presidential reference on 2G.

The legal war is not without risks for GSM operators as well, since at least three of the big four — Aircel, Vodafone, and Idea — also received spectrum in 2008 at 2001 prices.

The allocation was based on licences granted to them in December 2006 by the former Telecom Minister, Dayanidhi Maran.

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