New Delhi:
The Prime Minister will meet with senior ministers tomorrow to review the rules that will apply for an auction of 2G spectrum. 122 licenses for mobile networks issued in 2008 were cancelled by the Supreme Court earlier this month because spectrum or air-waves had not been auctioned. That verdict caused spasms in corporate India, with several foreign investors registering their complaint. The court also ordered that the licenses it had revoked be reassigned in four months, based on an auction process.
Prime Minister, crucially, will also consider whether to cancel 2G licenses issued before 2008 as well because in those cases too, spectrum was granted for free to giants like Tata and Bharti-Airtel. The idea is to explore whether to create a level playing field now for all operators who would like to bid for licenses. The Supreme Court said that it had not struck down the licenses issued before 2008 because they were not mentioned in the petition that it considered.
The 2G licenses that were declared null and void by the Supreme Court were allocated by A Raja when he was Telecom Minister in 2008, a term apparently suffused with corruption and an intransigent subversion of rules. Mr Raja followed a first-come-first-serve policy on paper; in practice, he allegedly manipulated the line of applicants to help a few chosen companies pole-vault to the head of the queue. Mr Raja has just completed a year in jail.
When cancelling the licenses, the Supreme Court said, "There is a fundamental flaw in the principle of first-come-first-served in as much as it involves an element of pure chance or accident. In matters involving award of contracts or grant of licence or permission to use public property, the invocation of first-come-first-served principle has inherently dangerous implications."
Companies like Norway-based Telenor, which partnered with real estate giant Unitech to set up Uninor Wireless, say that the cancellation of licenses punishes them irrationally. Telenor bought 67% stake in Unitech Wireless a few months after the latter bought its 2G license for Rs 1600 crores. Unitech is one of the companies charged with criminal conspiracy and cheating along with Mr Raja. Some of India's biggest companies like Reliance Telecom are also on trial.
Uninor's case has been taken up at a diplomatic level by Norway. The country's IT minister on Tuesday met Kapil Sibal.
As a consequence of the Supreme Court verdict last week, Bahrain-based Batelco announced its exit from India, selling its stake in mobile firm STel.
Russia's Communications Minister Igor Shchyogolev is reportedly going to visit India to express the country's concern over its investments in the Indian firm, Sistema Shyam Teleservices (SSTL).
SSTL, a joint venture between Russia's Sistema and India's Shyam Group, which provides its services under the MTS brand name, has also said that it reserves the right to protect its interests by using all available judicial remedies and was mulling the option of filing a review petition in the Supreme Court.
Sistema holds a 56.68% stake in the venture, while the Russian government holds 17.14% and the Shyam Group of India has another 23.98%. The remaining 2.2% is publicly owned.