Government for extending 2G auction deadline to November (Lead)

August 7th, 2012 - 10:21 pm ICT by IANS  

P. Chidambaram New Delhi, Aug 7 (IANS) The government will file an application in the Supreme Court seeking an extension of the deadline for the auction of 2G spectrum, Communications Minister Kapil Sibal said Tuesday.

The apex court had set Aug 31 as the date by which the auction has to be completed.

However expressing concern, telecom operator Sistema Shyam Teleservices (SSTL) has said due to the prevailing regulatory and legal uncertainties the company is facing huge losses per day which is likely to escalate following the extension.

“Due to the prevailing regulatory and legal uncertainties, SSTL is losing approximately Rs.7 crore per day. With the auction timelines getting further delayed, it is bound to add to the losses of the company,” said Vsevolod Rozanov, president and chief executive officer, SSTL.

SSTL, a joint venture between Russia’s Sistema and India-based Shyam Group.

According to Norway-based Telenor Group which has been operating in India under a joint venture with India-based Unitech, such delays prolong uncertainties. “Such delays are a matter of concern to us as they prolong the uncertainties we face. We urge the government to conclude the auction process at the earliest,” the company said in a statement.

“Ofcourse, until any such extension is sought and granted, we have to continue working with the existing deadlines. As regards the validity of our licenses, the principle of licenses continuing until after the auctions has already been established and applied by the Hon’ble Supreme Court of India while granting extension on April 24, 2012,” it added.

The decision to seek extension was taken at a meeting of the Empowered Group of Ministers (EGoM) on telecom headed by Finance Minister P. Chidambaram Tuesday.

“We are going to move the Supreme Court, place before them the facts and what the government has done, and also place before them that in terms of this schedule it isn’t possible to perhaps to complete the auction by Aug. 31,” Sibal told reporters after the meeting.

Though Sibal did not elaborate on the extended timeline, a senior official said the auction would likely begin by early November.

Sibal did not say whether an extension of the deadline will allow the affected companies to continue offering services beyond Sep 7.

According to Rajan Mathews, director general, Cellular Operators Association of India (COAI) the problem will be greater for operators whose licences stand to be cancelled.

“These operators are hugely being affected due to the uncertainties prevailing in the market,” Mathews told IANS.

The Supreme Court had cancelled 122 licences Feb 2 and asked the telecom department to redistribute them through an auction.

The Cabinet had last week finalised Rs.14,000 crore for 5 MHz spectrum in the 1800 MHz band.

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