The Hon’ble Supreme Court judgment of cancelling 122 2G licenses on probe of 2G scam has already created great ripples in the telecom Industry. Telecom operators Uninor, Stel and loop Mobile are in major trouble, as they have lost license on most of their telecom circles and they need to find a way out of this within 4 months. Cancelled 2G licenses include 22 of Uninor, 21 of Videocon, 21 of Sistema Shyam (MTS), 21 of Loop mobile, 15 Cheers Mobile(Etisalat—DB), 13 of Idea and Spice Communications, 6 of S-Tel and 3 of Tata teleservices.

Uninor Telecom Operators Reacts on 2G License Cancellation

Uninor whose 22 license was cancelled, said it has been “unfairly treated” and “was shocked” after the Supreme Court’s verdict. Uninor posted messages on their official website Facebook and Twitter pages saying “Dear Fans, Uninor services will continue,The court has not ordered any stoppage of any services. No interruption of our services, We will remain a strong competitor in our circles, More than 36 million Indians have chosen Uninor. Our customers, workforce and partners. Telenor Group has invested over 14,000 crores in equity and guarantees in Uninor, it’s a long-term commitment, We are the competition, And competition will prevail

Uninor Response to Customer on 2G license Cancellation on Twitter
Uninor Response to Customer on 2G license Cancellation on Twitter
Uninor Response to Customer on 2G license Cancellation on Facebook
Uninor Response to Customer on 2G license Cancellation on Facebook

Economic Times report quotes of Telenor CEO Jon Fredrik Baksaas as saying that the option to quit was on the table after calls by investors and analysts putting pressure on the company. He said that the ruling was a very serious attack on the company’s investments, based on the license framework that was spelt out in 2008 and said that it is an action that it had never seen in any country before.

Sistema Shyam which operates in the name of MTS whose 21 license was cancelled, issued a statement on the Supreme Court verdict saying “The Supreme Court of India issued a judgment on February 2nd revoking 122 telecom licenses of 11 telecom operators, including 21 of the 22 licenses held by Sistema Shyam TeleServices Ltd (SSTL). The order was issued on the grounds that these licenses were not granted in accordance with required procedures by the Department of Telecommunication. The court has further directed the Telecom Regulatory Authority of India (TRAI), India’s top telecom regulatory body, to make fresh recommendations on the grant of 2G licenses and the re-allocation of spectrum via auction within 4 months by the Department of Telecom (DOT).
Sistema by way of its investments in SSTL has fully demonstrated its commitment to its Indian operations and is very disappointed by the Supreme Court’s decision. In essence, Sistema and SSTL are being penalized for acting in good faith and in reliance on the appropriateness of the procedures established by India’s telecommunications authorities. Sistema therefore looks forward to a clear, transparent, and equitable policy decision on these matters by the Indian government.
To safeguard its interests, Sistema and SSTL will contest this order by pursuing all available legal remedies. In the meantime, Indian operations will remain business as usual for SSTL, a national telecom operator serving more than 15 million customers, employing over 3500 employees, and with investments of over USD 2.5 billion.

MTS response on 2G license Cancellation
MTS response on 2G license Cancellation

Idea Cellular which took over Spice Communications, losing 13 of its 2G license issued a statement says “ Idea Cellular, one of the original mobile operators had applied for 9 new licenses in 2006, long before the Government took a decision to award licenses in 2008. Today, the Hon’ble Supreme Court has delivered its judgment on PILs in the matter of telecom licenses granted in 2008, where they had quashed all the 122 telecom licenses issued. This includes Idea’s above 9 licenses and 4 licenses of erstwhile Spice Communications which stands merged with Idea Cellular. Idea Cellular has rolled out its telecom services in 7 license areas including Tamil Nadu, Kolkata, West Bengal, Orissa, Assam, NESA and Jammu & Kashmir. The remaining 2 licenses of Idea Cellular and 4 licenses of erstwhile Spice Communications are non-operational. These licenses, as per then stated Government’s “first come first serve” policy, should have been granted to Idea Cellular much earlier than January, 2008. This seems to have been recognized by the Supreme Court as they have not charged us any penalty.
Idea Cellular has unnecessarily been caught in this situation of cancelled licenses, just because the licenses were granted in January, 2008 which was as late as 18 months from the date of application. In fact, Idea Cellular had filed a Petition in TDSAT inter alia seeking to isolate our application from the 2007/08 applications, and thus requesting for priority under the then DoT policy of “first come first serve”. 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.
Idea Cellular in these 7 service areas currently has over 6 million subscribers. These account for about 5% of Idea’s cumulative Capex, 4% of its revenue, and are EBITDA loss making circles.”

Loop Mobile 2G license Cancellation response

Loop Telecom which loosed 21 of its 2G license said that “they had submitted to the Supreme Court (during the course of the hearing of the PILs) on 9th March 2011 that it was not interested in profiteering from mispriced allocation of spectrum, and had offered to the Supreme Court that the licenses issued be taken back and re-auctioned so as to establish a fair market price for the spectrum.

It claims that it did not benefit from the changes which were made to the first come first serve policy, including the notification of a cut off date for applications and the changes in the terms of the LoIs issued on 10.01.2008, and its application for new licenses was in accordance with the governments 2007 policy, looking to expand its presence to from a single circle to a pan India operation. Remember that Loop Telecom did not sell any of its shareholdings after having received such license, it added.”

Cheers =-Mobil-Etisalat-DB

Etisalat which operates as Cheers Mobile, losses 15 2G licenses points out that “the Supreme Court decision relates to events that occurred in January 2008, well before December 2008 when Etisalat invested in Swan. It claims to have no knowledge of what occurred in the license application process for Swan and says it had no involvement in it, saying that the license 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. The company says it will work with EDB’s management and legal counsel to understand the judgment, its ramifications on the operations of EDB, particularly its customers and employees as well as its right to a review of the Supreme Court’s decision.”

India’s top telecom players Airtel, Vodafone and RCom didn’t respond to this issue, as they got their license before January 10, 2008. It seems by this judgement, this companies seems to be getting more benefits, as the users will all together move to them, if any of the telecom operator failed to restore the service after 4 months. The licenses would be canceled from four months from now. It seems to be on of the best time to capture the competitors subscribers without much effort.

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