Supreme Court refuses to extend Airtel, Vodafone's licences

The Supreme Court’s refusal to extend the licences of Airtel and Vodafone, will force them to bid the highest during spectrum auctions.

NEW DELHI: The Supreme Court's refusal to extend the licences of the country's two biggestmobile phone service providers, Airtel and Vodafone, will force them to bid the highest during spectrum auctions, if they wish to remain in business beyond November 2014.

After the telecom appellate tribunal refused to extend their licences, which expire in November 2014, Airtel and Vodafone had sought an urgent hearing of their petitions in the apex court and sought extension of their licences, which they have been holding for the last two decades, by another 10 years.

But a bench of justices AR Dave and S A Bobde, which on Sunday heard the matter in the apex court, refused to give any interim relief to the two mobile telephony companies though it admitted their petitions and agreed to hear them expeditiously.

Senior advocates Mukul Rohatgi, A M Singhvi and Maninder Singh, who appeared for the telecom companies, requested the court for extension of licence. When it was refused, they requested the court to direct the telecom ministry to keep the allotted band of spectrum reserved for them during pendency of their petitions and not put it up for auction.

Airtel and Vodafone, which together have 350 million subscribers, pleaded that they had a right to seek extension of the licences bundled with spectrum to provide seamless and continuous mobile telephony services. Both agreed to pay the market determined price for spectrum.

They also cited a recommendation made by an expert committee headed by Subodh Kumar, additional secretary in the telecom ministry, which in 2009 had recommended that existing licensees could be offered the right of first refusal when the time for renewal of the licences comes.

"Security of tenure is a basic feature of telecom licence. This is in line with global practice for extension of licences. The licences have a rolling period to ensure investments are made," the committee had said. Together, the companies claimed to have invested over Rs 20,000 crore to set up telecommunication network all over India. But the bench asked, "Should you have a monopoly over spectrum?"

Vodafone and Bharti Airtel are participating in the spectrum auction and have been shortlisted as eligible bidders
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