SC scraps 2G licenses issued by A Raja
The Supreme Court (SC) on Thursday cancelled all the new 2G licences allocated by disgraced former Telecom Minister A. Raja in early 2008. The apex court held that 122 new 2G licences were granted in arbitrary and unconstitutional manner. The affected telecom service providers can operate the cancelled 2G licenses for four months. The SC asked telecom regulator TRAI to make fresh recommendation on grant of 2G licences. Allocation of spectrum will be done through auction within four months. Penalties of Rs. 50mn have been imposed on Tata Teleservices, Unitech Wireless and Swan Telecom. Videocon, Estel and Alliance Infratech have been fined Rs. 5mn each. Essar-Loop and Systema Shyam Telecom have also been penalised. Shares of DB Realty, Unitech, TTML, RCOM and Videocon Industries have taken a severe beating after the Supreme Court's announcement. On the other hand, Bharti Airtel shares jumped amid speculation that it could benefit from the Supreme Court's verdict. The 122 licences were given by A Raja for over Rs. 90bn.
Among the 122 licences issued by him in January 2008 on first-come first-serve basis, Uninor was allotted 22 pan India licences, Loop 21, Sistema-Shyam 21, Etisalat-DB 15, S Tel 6, Videocon 21, Idea 9 and Tatas 3. The judgement was pronounced by a bench comprising justices GS Singhvi and AK Ganguly. The petitions on the issue was filed by NGO, the Centre for Public Interest Litigation (CPIL) and Janata Party chief Subramanian Swamy. Telecom regulator TRAI said today that it needs to study today's Supreme Court judgement thoroughly before outlining the impact on customers. It will urgently try to figure out how companies whose licenses have been cancelled should inform their subscribers about their future course of action. India is the second-largest cellular market in the world by subscribers, with 894mn at the end of December, but call rates are among the lowest due to cut-throat competition. This was a collective failure of the Government which overlooked the warnings given by the CAG and the CVC on the issue, the Janata Party chief, Dr Subramanian Swamy, said. "Everyone had warned including the CAG and the CVC but the Government overlooked it," Dr Swamy said after the apex court's ruling.
Telecom stocks fall as SC scraps 2G licences
SC asks trial court to decide on probe vs. Chidambaram
The Supreme Court (SC) on Thursday refused to direct the CBI to probe the alleged role of Union Home Minister P. Chidambaram in the 2G scam. The apex court left it to the discretion of the trial court to decide on probe against Chidambaram in the 2G case. The Supreme Court also said that there was no need to set up a Special Investigation Team to monitor CBI's inquiry into the 2G scam. The CVC would monitor CBI's status report into the 2G scam investigation, the apex court said. judgement was pronounced by a bench comprising justices GS Singhvi and AK Ganguly. The petitions on the issue was filed by NGO, the Centre for Public Interest Litigation (CPIL) and Janata Party chief Subramanian Swamy. The issue of Chidambaram's role in the 2G scam was raised in the Supreme Court by the petitioners who claimed they had evidence to show that the decision regarding pricing of spectrum was taken jointly by him and A. Raja. Judge Saini's verdict on this petition is expected on Saturday.
Govt to examine SC verdict on 2G case: FM
Finance Minister Pranab Mukherjee said on Thursday that the Government will examine the implications of the Supreme Court ruling in the 2G case. "Judgements have come and we will have to examine judgements and its implications. Government will examine it," Mukherjee told reporters in New Delhi. The apex court today ordered the quashing of the 122 2G licences granted by former telecom minister A. Raja on the ground that they were issued in a totally arbitrary and unconstitutional manner. The court also imposed a fine of Rs. 50mn each on three telecom companies, which offloaded their shares after getting the licenses. It also directed regulator TRAI to make fresh recommendations on allocation of 2G licences.
2G scam...SC accepts Swamy's plea on prosecution
SC ruling in 2G case may affect 10k jobs
The Supreme Court order canceling 122 2G spectrum licences is likely to impact around 10,000 jobs in the telecom sector, according to reports. Reports stated that the operations in the cancelled licences involve approximately 4,000 direct jobs and over 6,000 indirect jobs. These are in areas like telecom sales, customer support and tower management and maintenance, says report.
2G scam fallout...70mn users may have to switch operator
Reactions to SC verdict on 2G scam: -
ASSOCHAM reacts to SC ruling on 2G scam
Industry body ASSOCHAM said the Supreme Court judgment will be in the interests of serious and long-term investors – both domestic and foreign. The apex court has strongly underlined the need to follow an open, transparent, fair and rational approach for the development of infrastructure sector and allocation of scarce national public property such as spectrum, said The Associated Chambers of Commerce and Industry of India (ASSOCHAM). The chamber has always stood for strong, consistent and stable policy and regulatory regime. "We want strong regulation and process for the growth and development of infrastructure sector, especially telecommunications which is a highly capital intensive industry," it said in a statement.
SBI not worried about exposure to new '2G' licences
State Bank of India (SBI) is not concerned about potential loan losses arising out of the cancellation of new 2G telecom licences, its deputy managing director Santosh Nair said. Telecom companies, whose licences have been cancelled, may bid again, he added. Shares of SBI'> SBI fell as much as 4% after the Supreme Court revoked all 122 telecoms licences issued under the tenure of former Telecom Minister A. Raja. SBI Chairman Pratip Chaudhuri was quoted as saying that he saw no spike in stressed assets following the apex court's ruling. SBI has given loans of Rs 11bn to these companies and has provided guarantees for another Rs 34bn, which now stand cancelled, Nair said. Public sector bank Central Bank of India reportedly has exposure to a couple of affected telecom companies while IDBI Bank does not have a large exposure. State-run Punjab National Bank (PNB), Bank of Baroda (BOB), Allahabad Bank, Canara Bank, Corporation Bank, and private sector Yes Bank too have exposure to these companies.
RCOM licences not affected by SC ruling
Uninor 'shocked' at SC scrapping 2G licences
Uninor, a joint venture between India's Unitech and Norway's Telenor, said on Thursday that it was shocked to hear that the Supreme Court has cancelled all its telecom licences. The apex court today revoked 122 telecoms licences issued under a scandal-tainted 2008 sale. "We will study the order in detail and exercise all options available to ensure that Uninor continues to operate in India," Uninor said in a statement. Uninor has about 36 million subscribers in India.
Sistema Shyam studying legal remedy on SC ruling
Idea Cellular's statement on SC judgement
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. 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. 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.
Loop Statement on Supreme Court Judgement
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