Loop calls on government to auction its licence

10 Mar 2011

Indian mobile network operator Loop Telecom has submitted an affidavit to the country’s Supreme Court proposing that its pan-India telecom licence and corresponding spectrum be put up for auction, the Business Standard reports. Under the operator’s proposition it has requested that its concession and spectrum are sold via auction by the state, with the proviso that it is allowed to submit bids during the sale process and that it be given the right to match the highest offer. Further, Loop has said that should it not re-acquire the licence it should be refunded the INR14.5 billion (USD317.4 million) it paid for the concession, while it said that the government should keep any monies raised by the sale in excess of that amount.

Loop is one of a number of companies that could lose its concession after India’s Supreme Court issued notices to both the Central Government and eleven private telecoms operators in January 2011 regarding a petition which seeks to cancel those 2G spectrum licences it claims were handed to companies either ineligible for such concessions or those that failed to fulfill rollout obligations. The telco is also facing further examination meanwhile, with authorities having claimed that the Essar group had more than a 10% stake in Loop when it was awarded the licence; under existing norms a telecom company may not hold more than 10% in another company operating in the same telecoms circle, but the Essar group owns a 33% stake in Vodafone Essar. The Essar Group has, however, claimed that its stake in Loop is below the 10% limit.