Telcos whose permits were cancelled may not get to bid in next round of auction

Inter-miniterial panel Telecom Commission has accepted the recommendation by a Department of Telecom (DoT) committee to remove the eligibility rule that allowed such companies to participate, the sources said.

The DoT committee has suggest that the eligibility condition would require modification with respect to quashed licences as there would be no such licence holder in the next auction. It has suggested that any eligible entity can participate as new entrant or existing licence holder.

This view is different from the one given by the Telecom Regulatory Authority of India (TRAI) for the third round of spectrum auction.

It recommended that "eligibility conditions prescribed in the recently held auctions (November 2012 and March 2013) should be retained for the upcoming auction".

The DoT committee has said however that it is "of the view that the eligibility condition would require modification with respect to quashed licencee as there would be no quashed licencee in the next auction. This will have to be suitably incorporated in the NIA".

According to sources, Telecom Commission has upheld the views of DoT panel, saying that "Recommendations of DoT's committee may be accepted".

TC is expected to take final view on all recommendations of TRAI on October 29 which will be then send to Empowered Group of Ministers on spectrum, headed by Finance Minister P Chidambaram, for final decision.

In February last year, the Supreme Court had cancelled 122 telecom licences in the 2G spectrum allocation case. They covered 22 licences of Uninor, 21 of Loop Telecom, 21 of Sistema-Shyam, 15 of Etisalat DB, 6 of S Tel, 21 of Videocon, 3 of Tatas and 9 of Idea Cellular.

They were able to get benefit of government decision to set-off the amount they paid for impacted permits against final price they had to pay for spectrum in auctions.

Uninor, Sistema Shyam, Videocon and Idea Cellular were among those companies that were allowed to adjust the licence fee they paid for quashed licences.

Loop Telecom, Etisalat DB, S Tel and Tata Teleservices have so far not participated in auctions.

Foreign investor in Loop Telecom, Khaitan Holdings Mauritius Ltd, has filed international arbitration against Indian government seeking damages of about USD 1.5 billion in the matter.

Meanwhile, TC has given in-principle approval to spectrum trading recommendation of TRAI which would allow telecom firms to take spectrum from other companies.