By Telecom Lead Team: Idea
Cellular announced it will explore possibilities to protect investment in
mobile circles following the Supreme Court order to cancel license of operators
who got license in 2008.
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 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, according to a press release from Idea
Cellular.
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 said in a statement.
Idea
Cellular in these 7 service areas currently has over 6 million subscribers.
These account for about 5 percent of Idea’s cumulative Capex, 4 percent of its
revenue, and are EBITDA loss making circles.
