2G Scam: Supreme Court Quashes 122 Licences issued in 2008

[HetalDP 947]

Good For = Loop, Etisalate, Videocon they might get their funds back which they already wanted

BAD For = Uninor Lost whole India licence.

BAD For = MTS they lost whole Indian Licence except Rajasthan (This Company was not involved in any scam - Feeling very very bad for it)

Good for all old Operators like Airtel, Aircel, Idea, RCOM, Tata, Vodafone, BSNL (7 Players is enough Competition)

[Arun 795]

Have to devise how customers less than 90 days can port: TRAI

NDTV, Updated: February 02, 2012 12:51 IST

After the Supreme Court cancelled 122 licenses issued in 2008 by former minister A Raja, the regulatory body for telecom TRAI has been asked to recommend a new process for allocating licenses and auctioning spectrum. This is what TRAI chairman JS Sharma told NDTV:

- As far as the cancelled licences are concerned, together they hold less than 5% of the total base . In terms of numbers they may be big but in terms of percentages, it’s small.

- We will have to issue necessary directives for the company to inform their customers (about cancelled licenses).

- Customers who are affected can always port to a different operator .. there is no difficulty .. only for those customers less than 90 days old, porting is not possible.

- We will definitely stick to the timeline (of recommending auction process in four months). We will issue a consultation paper in the next few weeks.

- I will refrain on commenting on what is exactly is the status of these (cancelled) licenses .. let me read the judgement copy.

- As far as the new guidelines is concerned we are yet to frame it … but auction is the way ahead in terms of policy.

[SUDYEcaZ 67]

2G Scam: Supreme Court Quashes 122 Licences >> http://timesofindia....ow/11723653.cms

In a major setback for the government, the Supreme Court on Thursday quashed all 122 spectrum licences granted after January 2008.

The apex court left it open for the trial court to decide whether home minister P Chidambaram needs to probed in the 2G scam.

can we have list of 122 licences...

I think few might belong to Idea also when did Tata got license to operate GSM?

got this link, but it does not have the complete list

http://www.rimweb.in/forums/topic/12200-govt-issues-new-telecom-licenses/

Edited February 2, 2012 by SUDYEcaZ

[Karthik R 246]

The operators who got their licenses canceled have been barred from participating in future auctions?

[csmart 472]

I think, MTS may go for review to higher bench in SC.

Loop is advertising a lot in Mumbai newspapers since last couple of days. want to see next ad, "we've got fix to yr network problem. We are closing it down."

[rajanmehta 4,056]

can we have list of 122 licences...

Details of 122 Licences.

• Unitech Wireless Ltd (Uninor) was granted 22 licences all over India.
  
• Loop telecom was granted 21 licences all over India except Mumbai.
  
• Siestema Shyam (MTS) was granted 21 licences all over India except Rajasthan.
  
• Tata telecom was granted three licences in Assam, Jammu and Kashmir and Northeast.
  
• Etilsalat DB was granted 15 licences in Bihar, Madhya Pradesh, Andhra Pradesh, Delhi, Gujarat, Haryana, Karnataka, Kerala, Rajasthan, Mumbai, Maharashtra, Punjab, Tamil Nadu, Uttar Pradesh East and Uttar Pradesh West.
  
• S-Tel was granted six licences in Assam, Northeast, Bihar, Orissa, Himachal Pradesh, Jammu and Kashmir.
  
• Videocon was granted 21 licences all over India except Punjab.
  
• Idea was granted nine licences in Assam, Jammu and Kashmir, Karnataka, Kolkata, Northeast, Orissa, Punjab, Tamil Nadu and West Bengal.
  
• Spice (Idea) was granted four licences in Andhra Pradesh, Delhi,Haryana and Maharashtra.
  

[KapilAgrawal 340]

They have 4 Months time before they have to stop their service. And in the mean while Fresh auctions will be there for 2G again as per guidelines laid by TRAI.

At least MTS & Uninor are going to bid high to save their investment.

[inception 75]

Can any new company bid for 2G now say Moserbaer, Tulip, Oswal who also participated in 2008 give away?

[csmart 472]

as per Kabil Sibal statement, "

any aggrieved corporate can approach the court for relief" (

check TOI). I feel court will grant them some sort of stay or provide relief, like Vodafone case. This way govt also saves it face and assure that foreign investment is safe in India and also calm public that cos are penalised.

[KumaarShah 143]

^^^

Exactly this is what will happen eventually... Today it is a slap on the GoI's face, tomorrow it will be a kiss or a smooch and what not...

[kesav 127]

This judgement by supreme court is utter non-sense.

I lost all my faith in Indian judiciary and it has acted in arbitrary manner without any logic.

It simply shows that SC was shamelessly dancing to the music played by the media.

I feel this judgement was scripted in haste by Judge A.K.Ganguly to leave some kind of legacy behind him rather than serving meaningful Justice.

It's pointless to pass this judgement when the trial is going on the special court.

Why can't judges adopted similar position in this case as they've adopted for P.Chidambaram's case?..... Simply ask the special court to continue the trial and pass the judgement....

Is it not eating into the functional area of the lower court by the higher court? What kind of legacy is it???

What is the necessity to rush into judgement ???

Will they ever be able to bring back this time-space relation if the special court finds later that certain licencees had never violated the terms???....

There were 2 issues before the SC on this case.

(1) First Come First Serve(FCFS) Policy

(2) Wrong implementation of FCFS policy

This judgement catastrophically fails on both accounts.

If FCFS is wrong policy, then all the licences from 2001 must have been cancelled.

If it's wrong implementation then the licences which have not violated the policy should never have been cancelled. MTS, TTSL licences(to name a few) will fall in fair category.

Further looking at a major picture,

Judiciary does not have any role in policy matters unless it infringes on fundamental rights of the citizens. It's prerogative of the executive.

In that sense, it just simply can't rule FCFS policy is wrong.

This is simply judicial overreach. Let us hope Chief Justice is watching this unconstitutional move by his colleagues.

In my opinion, I see one and only reason.

Retirement of Mr. A. K.Ganguly.

The most respected Judge has lost all his credibility due to this act of personal gratification at the 11th hour.

For his personal empowerment, he has sabotaged the Indian Judiciary.

Let us focus on future,

Let us pray sincerely to God that at least special court judge will be meaningful and work for true Justice and not for his media status.

Govt. must immediately apply for review petition on this utterly irrational judgement.

Chief Justice must control his wards to work within their constitutional limits. He must crystal clearly define which are the areas in which Judiciary can pass judgments and the areas in which it should not. If not, balance of power between legislative, judiciary & executive will collapse and eventually democracy falls apart.

[chitshar 25]

MTS and UNINOR have spent more than 10000 crores each till date so they are here to stay no matter what they have to do. But if they have to bid for spectrum then they might have to shell out a very big amount of money which i think will be upwards of 5000 crores. How will they offer cheap services then? We know quality wise they cant match the biggies. These two are in a very tight situation.

[commonman 228]

MTS licence covers CDMA or GSM spectrum?

if CDMA, they could possibly make a case out of that itself.

and in terms of customer base, MTS CDMA is definitely not a small operator.

Add to that the fact that MTS Russia is owned by the Russian Govt.

[Chirag Thakkar 4]

10 Facts and whats the impact going to be?

http://www.ndtv.com/article/india/supreme-courts-telecom-verdicts-ten-big-facts-on-what-happened-today-172576?pfrom=home-lateststories

[sgiitk 32]

This judgement by supreme court is utter non-sense.

There were 2 issues before the SC on this case.

(1) First Come First Serve(FCFS) Policy

(2) Wrong implementation of FCFS policy

This judgement catastrophically fails on both accounts.

If FCFS is wrong policy, then all the licences from 2001 must have been cancelled.

I feel it is an excellent judgement. Should be a big nail in the coffin of crony capitalism, not only in Telecom but all over.

As for FCFS I understand that the earlier pricing was arrived after multiple rounds of bidding. So it was only the implementation which was FCFS. Remember the total base in India was (if I remember right) 7m and in the Raja mess it was about 100x. Also, where was FCFS. Every conceivable (and a few more) goalpost was moved. I bet the UPA jokers have been into the NDA policy with a fine comb and found nothing.

What happens to the Zero loss theory of Sibbal. Two Harvard trained lawyers have been bested by a Harvard don!!

[kesav 127]

You started with praising the judgment but concluded by slamming the judgment.

I can understand this duality which I've seen in most of the normal onlookers of this case.

Judgement runs along the chord which says that TRAI's recommendation is flawed which simply implies that FCFS is a wrong policy.(In that sense, your statement

So it was only the implementation which was FCFS

straight away rejects the Judgment)

If that has to taken, then all licences issued from 2001 must be cancelled without any distinction.

If we assume that Mr. Raja has done wrong implementation, The CBI has clearly identified the set of licenses which falls in this category.

Then only those licenses should have been cancelled.

This judgment looks like childish master yelling at his servants that "all are fired" on some major provaction.

For this 'non-sense', you don't need judges sitting on the papers for so long. This could have been delivered as soon as Mr. Raja was chargesheeted.

Are we becoming a foolish judiciary where judgments are driven by media pressure??

Where is Cheif Justice of India???? Is he sleeping??

What is his opinion on this non-sense??

Here is a judgment which neither Judges nor the parties to case could explain to the nation.

Edited February 3, 2012 by kesav

[phonegeek 588]

Though it seems that you have read the judgement in full, but still some of your queries are addressed in the following :

New Delhi SENDING a clear message to the CBI court that the 2G spectrum allocation of 2008 is a scam and not the result of a government policy decision, the Supreme Court today quashed the grant of 122 UAS licences and allocation of spectrum to 12 private companies.

Even as the trial in the 2G case progresses in a Patiala House trial court in Delhi, a bench of Justices G S Singhvi and A K Ganguly held former telecom minister A Raja and his department guilty of “virtually gifting away an important national asset at throwaway prices.” The bench also slammed the telecom regulator, TRAI, accusing it of doublespeak for giving the First-Come-First-Served (FCFS) policy of spectrum allocation a go-by in the name of “level playing field” without emphasizing on transparency in allocation through an auction process.

But no one was more strongly indicted than Raja himself, the court even claiming that officers were “cowed” down fearing his “wrath.”

The bench went on to impose a fine on the private telecom companies, saying they tweaked the “power circles” at the expense of the Public Exchequer.

These findings have been included despite the court saying that observations and conclusions in the judgment will neither influence Special Judge OP Saini, in whose court the trial is on, nor affect the “pending investigation” by the CBI, Directorate of Enforcement and others agencies, or for that matter, prejudice the defence of the accused, including Raja, who are facing prosecution.

Countering the private companies’ argument that if the FCFS allocation of spectrum has “resulted in violation of the institutional integrity, then all the licences granted 2001 onwards should be cancelled,” it said those who have got licences between 2001 and September 24, 2007 are not parties in these petitions and their legality has not been questioned before this Court.

The judgment comes on petitions filed by Centre for Public Interest Litigation (CPIL), an NGO, Janata Party chief Subramanian Swamy and others.

The court, in the judgment, endorses advocate Prashant Bhushan’s arguments that spectrum is a national asset and cannot be distributed by adopting the principle of FCFS on the basis of the application received by the DoT without any advertisement and without holding auction.

To this end, the court invoked the international principle of Public Trust Doctrine to explain why spectrum is considered a “finite natural resource” owned by the public and not to be spent as “largesse” by public officials and political entities on their whims and personal gains.

”Spectrum has been internationally accepted as a scarce, finite and renewable natural resource which is susceptible to degradation in case of inefficient utilisation. It has a high economic value in light of the demand for it on account of growth in the telecom sector. Although, it does not belong to a particular State, the right of use has been granted to the States as per international norms. It is hence to that extent a national asset,” Justice Singhvi, who wrote the judgment, observed.

“What needs to be emphasised is that the State and/or its agencies/instrumentalities cannot give largesse to any person according to the sweet will and whims of the political entities and/or officers of the State,” said Justice Singhvi invoking a 1996 case law New India Public School v. HUDA.

Justice Singhvi said his judgment is inspired by the 1997 MC Mehta case verdict, which says that “natural resources are vested with the Government as a matter of trust in the name of the people of India and it is the solemn duty of the State to protect the national interest and natural resources must always be used in the interest of the country and not private interests.”

Basing his judgment on this principle, the Bench declared the allocation of spectrum to the 12 companies as illegal and non-existent in four months.

The court gave the TRAI two months to make fresh recommendations for grant of licence and allocation of spectrum in 2G band in 22 Service Areas by auction, as was done for allocation of spectrum in 3G band.

The Central Government shall consider the recommendations of TRAI and take appropriate decision within the next one month and fresh licences be granted by auction, the court said.

Of the dozen telcos, Etisalat, Unitech Wireless Group and Tata Teleservices Ltd will have to pay Rs 5 crore each for having benefited by a “wholly arbitrary and unconstitutional action taken by the DoT,” the court said. Special mention was given to the fact that they reaped “many thousand crores in the name of fresh infusion of equity or transfer of equity” through off-loading their stakes.

Loop Telecom Pvt Ltd, STel, Allianz Infratech (P) Ltd and Sistema Shyam Tele Services Ltd have also been directed to pay a cost of Rs 50 lakh each “because they too had been benefited by the wholly arbitrary and unconstitutional exercise undertaken by the DoT” in 2008. Fifty percent each of the costs imposed shall go to help legal aid and the Prime Minister’s Relief Fund, respectively.

The court traces the roots of the scam to the August 28, 2007 recommendations given by TRAI on spectrum allocation which led to the “scarce commodity” being allocated cheap to private players.

“Although, while making recommendations on 28.8.2007, TRAI itself had recognised that spectrum was a scarce commodity, it made recommendation for allocation of 2G spectrum on the basis of 2001 price by invoking the theory of level playing field,”

The TRAI turning its back on the implications of the FCFS policy was in contravention of the Cabinet endorsement of the recommendations of the Group of Ministers (GoM on October 30, 2003 that DoT and Ministry of Finance were required to discuss and finalise the spectrum pricing formula, the court said.

“To say the least, the entire approach adopted by TRAI was lopsided and contrary to the decision taken by the Council of Ministers and its recommendations became a handle for the then the Minister of C&IT and the officers of the DoT who virtually gifted away the important national asset at throw away prices. This becomes clear from the fact that soon after obtaining the licences, some of the beneficiaries off-loaded their stakes to others, in the name of transfer of equity or infusion of fresh capital by foreign companies, and thereby made huge profits.”

The bench goes on to add: “We have no doubt that if the method of auction had been adopted for grant of licence which could be the only rational transparent method for distribution of national wealth, the nation would have been enriched by many thousand crores”.

With this, the court concludes that it has “no hesitation to record a finding that the recommendations made by TRAI were flawed in many respects and implementation thereof by the DoT resulted in gross violation of the objective of NPT 1999.”

Saying this, the court proceeds to attack the FCFS policy itself: “There is a fundamental flaw in the principle of first-come-first-served inasmuch as it involves an element of pure chance or accident”.

“Any person who has access to power corridor at the highest or the lowest level may be able to obtain information from the Government files or the files of the agency/instrumentality of the State that a particular public property or asset is likely to be disposed of or a contract is likely to be awarded or a licence or permission would be given. He would immediately make an application and would become entitled to stand first in the queue at the cost of all others who may have a better claim,” court reasons. On the other hand, the court said a transparent auction of a public asset lets no room to “scuttle the claim of worthy applicants”.

“When it comes to alienation of scarce natural resources like spectrum etc., the State must always adopt a method of auction by giving wide publicity so that all eligible persons may participate in the process. Any other methodology for disposal of public property and natural resources/national assets is likely to be misused by unscrupulous people who are only interested in garnering maximum financial benefit and have no respect for the constitutional ethos and values,” it said.

LINK

[rajanmehta 4,056]

Copy of Supreme Court Full Judgement Cancelling 122 Licenses if anyone is interested to Read.

Supreme Court Judgement Cancelling 122 Licenses.pdf

[kesav 127]

Countering the private companies’ argument that if the FCFS allocation of spectrum has “resulted in violation of the institutional integrity, then all the licences granted 2001 onwards should be cancelled,” it said those who have got licences between 2001 and September 24, 2007 are not parties in these petitions and their legality has not been questioned before this Court.

This is exactly where I've lost breath to understand.

When the entire judgment runs on the theory of 2001's FCFS being faulty, what crappy sense has descended upon them to annul only the licenses granted after Sep 2007???

When they 've scraped the policy of 2001, why on earth they've not scraped the entire beneficiaries??

When there's scope for impending judgment to annul one particular policy, why not ask all the beneficiaries to be made part of the case???

What way pre-2007 beneficiaries different from post-2007 beneficiaries????

It's ironic to see that when the judgment is passed against favoritism, the judgment itself is a favor for some beneficiaries.

Is this a judgment????

In nutshell,

Why the rush to deliver this foolish judgment???

Why does A.K.Ganguly not trust his successor??

Is A.K.Ganguly's personal gratification outweighs the integrity of his institution(Supreme Court)??

This judgment is going to kill the faith in the judiciary.

Edited February 3, 2012 by kesav

[me_saket 73]

all 6 idea circle where idea is having good customer base will be continued, other 3 will be return and exit.

MTS will bid again for 21 circle.

uninor may skip few circle, where they haven't got spectrum or are very less interested like JK, assam etc. will continue in 13+ circle.

Stel will close 2G operation and move out, and will sell 3G license to that operator who don't have 3g license in that area. this way batelco will continue with it's investment in india.

tata will bid again for those 3 circle.

videocon will return spectrum & exit biz,

etisalat may look new telecos (preferably Rcom) and will close down current Cheers mobile, DB realty will exit. spectrum return back to govt

Loop will Sell and exit. or may return back and exit., it's mumbai circle will be merged with other operator like idea/vodafone.

spice communication return and exit biz.

[kesav 127]

Out of all the operators, MTS will get back the spectrum at a cheap price(base price to be assigned by TRAI) since there'll be zero competition for CDMA spectrum.

I expect neither RCOM nor TATA nor BSNL nor MTNL to bid for CDMA spectrum.

Now, it's imperative upon TRAI to complete the auction process within the grace period of 4 months in order to avoid trouble for subscribers of prospective re-winning operators of shifting to other operators during interim period.

Edited February 3, 2012 by kesav

[me_saket 73]

@kesav

rightly said no one will bid for cdma spectrum.

and those company need not bid in auction for any additional spectrum.

BTW

3 circle of tata tel where it's license gets cancel will have to compulsorily bid to get spectrum, bcoz tata had already started operation with good amount of subscriber base of Photon+ customers.

J&K, assam and north east,, bcoz they are having maximum cities under EVDO in these circles. total 71 cities in these 3 circle

So price in these circle might be slightly higher for MTS. but otherwise considering these circle into C category, base price so low that even 10% rise wont affect these two companies

Edited February 3, 2012 by me_saket

[commonman 228]

I have been told by a lawyer who was part of the case that the whole PIL was funded by Airtel & Voda and even most of the data/documents submitted were also provided by them. The judgement also delivers maximum benefit to these two.

The judgement faults the FCFS policy of 2001 but keeps licences issued till 2007 out of its purview. Airtel and Voda got majority of their licences during this period.

On one hand, judgement leaves decision of PC to the lower court but on the other has declares all licences after 2008 as illegal.

Judge retires immediately after the judgement.

Now, are we getting a pattern here?

[chitshar 25]

As expected both MTS and UNINOR have put up strong messages on their website saying business as usual, we are competition, competition will prevail, will use all legal means necessary, uninor says have invested 14000 crores, mts says have invested 12500 crores, both saying services will not stop. So auction no auction these are here to stay. IT might become an opportunity for MTS to get gsm airwaves also and it will also become a dual tech operator.

[me_saket 73]

any way 7 operator per circle is more than enough competition in such sector, where u have to give connectivity to each village in india.

all new operator haven't enter any of village in last 3 years