Does judgment imply that licences granted on the principle of first come, first served since 2001 do not have a legal standing?
The government's proposed Presidential reference seeking a review of the Supreme Court judgment cancelling 122 telecom licences is likely to stir up serious torment for telecom players by questioning whether or not all the licences and linked spectrum granted since 1994 using methodologies other than auctions are illegal.
The government specifically wants to know whether the SC's January judgment implies that licences granted on the principle of first come, first served (FCFS) since 2001 have a legal standing. It has also questioned the legality of the dual technology licences awarded in 2008.
“While the decision to opt for a Presidential reference is yet to be finalised, as are the questions which should be included, legal clarity on these issues will be sought in some manner, either through the Presidential reference or by the Telecom Ministry itself,” a senior DoT official told The Hindu.
More confusion likely
Far from providing clarity, any such legal reference even outside the Presidential reference is likely to end up creating more confusion, casting a shadow of gloom over the telecom sector.
Specifically, this affects roughly 81 licences, which include 22 basic services licences issued in 2001 which migrated to the UASL regime in 2003, 26 UAS licences issued by Arun Shourie in 2004, and another 25 issued by Dayanidhi Maran between 2004 and 2007. Of these, Aircel owns the maximum (21) licences, followed by Reliance (18 dual technology), Tata (17 dual technology), Vodafone (9), Bharti (6), and Idea (2). In 1993, 8 licences were issued for the 4 Metro circles through a beauty parade. In addition, there are roughly 29 NLD and an equal number of ILD licences issued since 2003, which were given without an auction based on a fixed price of Rs. 100 crore for NLD and Rs. 25 crore for ILD till 2006, after which the entry fee was reduced to Rs. 2.5 crore each for both categories. The company that is perhaps least affected by these latest developments is Bharti, and to an extent Idea, which has already suffered cancellation of 9 licences earlier in February.
Till February 2012, India had roughly 280 Unified Access licences, 122 have been cancelled as of February 2, 2012, while another 81 are now likely to be placed under the legal scanner. This leaves only 77 mobile licences unscathed, of which roughly 38 were issued through a bidding process in 1995, 17 through the 2001 auction and the remaining awarded to BSNL and MTNL between 1999 and 2000.
The government's motivation in framing the Presidential reference in the manner that the internal notes suggest is unclear. Especially considering that the Supreme Court has already ruled (in response to senior counsel Harish Salve's plea) that the judgment does not apply to licences issued before 2008 since those were not in front of the court.
If these questions of law are included in the Presidential reference which, in turn, will be resolved through open court hearings of the Constitutional Bench, a dominant part of the telecom industry faces an uncertain future until legal resolution is available. This could take from four months to more than a year, jeopardising the present and future investment plans and placing the auction of spectrum that is expected back from the 122 cancelled licences at risk.
Keywords: 2G spectrum scam, 2G licence cancelltion, UPA government, Supreme Court verdict, FCFS policy, Presidential reference
While the GOI is within its right to seek clarification from the Apex court about the retrospective applicability of SC's judgement ,cancelling licences of 122 telecom players beyond 2008 to 2001.But, the intention of GOI is to create confusion.
The five judge bench of SC, in all probability, while considering the Presidential Reference will first order enforcement of its latest verdict regarding revocation of 122 licences which were allotteed electromagnetiv waves (Spectrum)on FCFS basis,before taking up the Reference. The SC is not obliged to consider the Presidential Reference. It could refuse to consider it at this stage.Let us wait and watch.
The government is trying to question the licenses given during non UPA rule.. The UPA is on set back after the February 2 decision, cancelling 122 licenses granted by then telecom minister Mr. A.Raja, of the supreme court.The government has lost its prestige due to this recent ruling of the S.C and is attempting to bring attention of the people to the policies used by its precedent non UPA alliance. Instead of focusing on the matter how to resolve all this mess created by its telecom ministry ,the govt is busy in to seek attention of the people for the same mistakes made by its rival precedent govt.
How much hindsight ? The SC ruling implies that FCFS did not fetch the right price for 2G licenses. So it is clear that there will be an impact on industry players who participated in tainted auctions. In older times, 1993 and 2008, Beauty parade and FCFS were probably needed ? Or, were they not? To find the answer, look at the numbers. The number of mobile phones in circulation was much smaller and the Average Revenue Per Unit (ARPU) was also different. It is unclear whether the motivation is to deliver collective punishment to the industry. The players who participated in tainted auctions should feel the pinch, but should innocent bystanders be tied onto them like a "human shield" ? This raises many questions which are unanswered.
The aim of all this reference is to save the skin of the corrupt Union ministers and the Congress chief. The bribe should be exposed. Nobody believes the government and no amount of reports like this can lend any faith in the intentions behind the government seeking legal clarifications.
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