Government moving swiftly to re-sell cancelled 2G licences

A day after the Supreme Court's 2 February judgement cancelling some 122 telecom licences granted after January 2008, the department of telecommunications (DoT), the licensor for all the operators, wrote to the Telecom Regulatory Authority of India (TRAI) asking it to put together a road map for the way ahead, according to a report.

The operative part of the Supreme Court ruling was for the licensees to hand over the spectrum to DoT within 120 days. DoT sources told Mail Today that it has now asked TRAI to give the necessary recommendations on the new auction process, as nine operators surrender their spectrum to DoT.

DoT secretary R Chandrasekhar confirmed that once TRAI's recommendations on the matter come in they will initiate a formal auction process instantly.

Part of a normally lethargic government's anxiety not to delay the auction of vacated spectrum can be explained by the amount of extra revenue it will gather from the re-sale, according to some analysts. The government is always strapped for money thanks to its politically motivated oil and fertiliser subsidies, employment schemes, and general profligacy.

According to the Mail Today report, DoT sources were categorical that in the new auction several operators whose licences have been invalidated would return to participate because they already have business operations in India. It added that they have been having regular meetings with operators like Norway's Telenor and Russia's Sistema, and the general perception is that these two at least would return for the auction.

Once TRAI's recommendations come in, DoT will take over and initiate a formal auction process. While it will do this 'as fast as possible', it should be remembered that the successfully implemented 3G auction in 2010 actually took 688 days before it saw the light of day.

"We are very clear that the SC has mandated that the process needs to be adhered to in two months. Our effort and endeavour is to deliver our recommendations in that time frame. We are gearing ourselves to do that," Mail Today quoted TRAI chairman J S Sarma as saying.

On the re-allocation of spectrum through auction, TRAI had issued a pre-consultation paper on 3 February seeking comments from stakeholders by 15 February. With as much as 540 MHz of spectrum being freed, the DoT has to set in motion a credible auctioning process. TRAI will have to recommend a reserve price, and the eligibility criteria will also have to be settled.