NEWS ALERT: India’s Supreme Court cancels 122 2G telecom licenses
February 2, 2012
The 2G spectrum licensing scam dates back to 2008 when nine telecom companies were issued airwaves and licenses for second generation mobile phone services at less than $350 million for a pan-India operation. As many as 122 circle-wise licenses were issued.
The Congress-led UPA government was criticised for giving the airwaves for too little and on a controversial first-come, first-served basis. Later, based on the auction of airwaves for third generation (3G) services, which gave nearly $15 billion to the exchequer, and that of broadband access, which went for over $8.5 billion, the notional loss for 2G rights was estimated at almost $40 billion. Prime Minister Manmohan Singh has consistently defended the decision and said that his minister had only implemented a policy already in place.
Now the Indian Supreme Court (SC), in its landmark ruling today, has ordered the cancellation of these 122 spectrum licenses, issued during A. Raja’s tenure as Telecom Minister, saying they were granted in an arbitrary and controversial manner. The SC has imposed a fine of Rs. 5 crore ($ 1 million) on three of the telecom companies and directed the Telecom Regulatory Authority of India (TRAI) to make fresh recommendations on allocation of 2G licenses, which the government has been directed to act on within a month. It has also directed that the allocation be done through auction within four months. In addition, the Court also referred the demand for probe of the alleged role of the then Finance Minister P. Chidambaram into the scam to the trial court instead of the Central Bureau of Investigation; and deputed the Central Vigilance Commission to monitor the case.
For full Supreme Court decision click here.
See below for more news and analysis on the court decision from India’s leading news sources.
News
Supreme Court cancels 122 2G licenses
In a huge embarrassment to the government and a jolt to the telecom sector, the Supreme Court today cancelled 122 2G licenses granted during the tenure of former telecom minister A Raja declaring it as “illegal” and blamed the government’s flawed first-come-first served policy.
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Supreme Court’s Telecom Verdicts: Ten big facts on what happened today
The Supreme Court has delivered three verdicts today with huge ramifications for the government, India Inc and cell phone users across the country. Here are ten big facts on today’s verdicts, delivered by Justices GS Singhvi and AK Ganguly, who retires today.
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2G scam: Supreme Court verdict factbox
India is divided into 22 telecoms zones and there are a total 281 zonal licences in the market of 894 million users and 15 mobile operators, led by Bharti Airtel, Reliance Communications and Vodafone’s India unit.
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2G case: SC pulls up TRAI for ‘lopsided’ approach in recommendations
The Supreme Court today pulled up the Telecom Regulatory Authority of India (TRAI) for adopting a “lopsided” approach in recommending grant of 2G spectrum at 2001 prices and methodology which suffered from several deficiencies.
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Don’t see much impact on customers, auction preferred: Trai
Telecom regulator Trai today said there will not be much impact on customers due to cancellation of 122 2G licenses of eight companies, as around 95% of total subscribers belong to operators which got licenses before January 2008.
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Political Reactions
2G telecom policy set by NDA, we merely followed it, says govt
Putting up a defiant face to the Supreme Court’s indictment of its spectrum sale policy, the government on Thursday passed the blame on the previous NDA regime for putting in place a ”faulty policy” on allocating spectrum which his government then merely followed.
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Sack Chidambaram’, BJP asks PM
BJP on Wednesday demanded that PM Manmohan Singh sack home minister P Chidambaram for his alleged role in the 2G scam, saying it was the only way Singh could restore his credibility after the delay by PMO in sanctioning prosecution of sacked minister A Raja in the same case.
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2G case: SC order a severe indictment of UPA-II government, says opposition
Major opposition parties today said the Supreme Court ruling on the 2G scam was a “severe indictment” of the UPA-II government and demanded that the Prime Minister own up responsibility but stopped short of demanding his resignation.
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Opinion
Implications of Cancellation of 122 2G Telecom Licenses In India & What Happens Next
Putting up a defiant face to the Supreme Court’s indictment of its spectrum sale policy, the government on Thursday passed the blame on the previous NDA regime for putting in place a ”faulty policy” on allocating spectrum which his government then merely followed.
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‘SC ruling: Five reasons why old telecom players will gain’ – by R. Sree Ram
The Supreme Court’s decision to cancel 122 2G telecom licenses has come as a shot in the arm for the incumbent telecom players. The euphoria can be gauged by the performance of the telecom stocks.Read Article
Supreme Court 2G Scam Verdict Impacts Over 53.31M Connections In India
How many connections are likely to get impacted, assuming the worst case scenario, that none of the 122 licenes are bought again or sold? Our estimates suggest that this base will be over 76 million connections, which is roughly 8.52% of India’s connection base of 893.84 million connections (as of 31st December 2011).
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