2nd UPDATE: India Regulator Seeks Initial Views On Bandwidth Auction
February 03 2012 - 11:26AM
Dow Jones News
India's telecommunications regulator Friday invited initial
views by Feb. 15 on framing rules to auction bandwidth for basic
mobile-phone services, following an order from the Supreme Court
that also canceled as many as 122 telecom licenses allotted to
several companies in 2008.
Some of the affected companies said they will continue their
operations in India and will contest the ruling by the court, which
said the first-come, first-served process used to allot the
licenses and bandwidth was "arbitrary and unconstitutional," and
facilitated corruption.
The order will become effective only after four months and, by
law, the companies can seek a review of the order.
The court directed the Telecom Regulatory Authority of India to
issue new proposals for the granting of licenses and allocation of
bandwidth through auction.
"Keeping in view the time-bound nature of exercise [to frame new
rules], no extension of time will be given" to provide suggestions,
the regulator said in a statement.
The regulator, which had in January sought initial views on the
allocation of telecom licenses, said Friday it is also inviting
views for framing auction rules along the lines of a bandwidth
auction for third-generation services in 2010.
It had already submitted its views on separating bandwidth from
licenses in 2010; in 2008, the licenses were bundled with
bandwidth.
India raised INR677.19 billion ($13.89 billion) through an
auction of bandwidth for 3G telephone services in 2010, compared
with initial expectations of INR350.00 billion.
Norway's Telenor ASA (TEL.OS) and Russia's Sistema JSFC
(AFKS.RS) said their Indian units would continue their
mobile-telephone operations and they are looking for legal remedies
following the court's order.
The court had ordered cancellation of all the telecom licenses
of Telenor's joint venture with Indian real-estate company Unitech
Ltd. (507878.BY) and Sistema's unit, Sistema Shyam Teleservices
Ltd. Both Telenor and Sistema acquired their stakes in the Indian
companies after the 2008 license and bandwidth allotment.
In separate statements, Telenor and Sistema said they will
contest the order, along with their Indian joint-venture firms.
Unitech Wireless had 36.30 million users at the end of December,
while Sistema Shyam had about 15 million subscribers.
Telenor also said it is writing down NOK4.2 billion in relation
to licenses and goodwill in India, following the court ruling.
After the writedown, Telenor's remaining accounting exposure to
India is NOK2.4 billion after tax, it said.
-By R. Jai Krishna, Dow Jones Newswires; +91-11-4356-3333;
krishna.jai@dowjones.com
(Sven Grundberg in Stockholm contributed to this article.)
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