Supreme Court rejects Telecom companies’plea for extension of licences by 10 years

The Supreme Court has dismissed a batch of petitions filed by various telecom companies, including Vodafone and Bharti Airtel, seeking extension of their spectrum licences by a further period of 10 years.

The Supreme Court had reserved its verdict in a batch of similar petitions filed by Bharti Airtel, Idea Cellular, Vodafone Mobile Services and Loop Mobile India wherein they had sought extension of their 20-year spectrum licences by another 10 years.

The telecom operators had challenged the government's decision to reject their applications for extension of their licences and auction the spectrum surrendered by them.

Companies like Bharti Airtel Ltd, Reliance Telecom Ltd (an arm of Reliance Communications Ltd) and Vodafone India Ltd had approached the court claiming they were governed by the earlier policy as their permits were granted in 1995. The licences of these telecom operators started expiring in November last year for mainly metro areas. The permits will expire later this year for non-metro areas as well. It was in this context that they had approached the court with the plea of extension of their licences.

The telecom companies said not extending the licences will hit consumer interest and could affect services. The government however countered this by saying that over the 20 years since licences were granted to the companies, Bharti Airtel had earned roughly Rs.4.6 trillion, Vodafone India Rs.2.85 trillion, Idea Cellular Ltd Rs.1.76 trillion and Reliance Communications Rs.1.4 trillion.

While telecom companies have argued that the terms and conditions of their 20-year licences state that they were extendable by another 10 years, the government has argued that the norms say it "may" extend the licence, and hence the matter was at its discretion.
The telecom operators had earlier sought a stay on the auction, saying the spectrum, for which the 20-year licence has expired, should not be put on the block.

Rejecting the contentions of the telecom companies, a Bench comprising of Justice Chelameswarand Justice R.K. Agrawal endorsed the Apex Court’s findings in the 2G case [(2012)10 SCC 1]

 that the Court respected the mandate and wisdom of the executive  in the matter of choosing the most suitable method of distribution of natural resources, and said that “this is clearly a matter of an economic policy entailing an intricate economic choice and the Court lacks necessary expertise to make such choice. ”

The Court then proceeded to dismiss the petitions filed by the telecom companies.

Read the Judgment here.