SC extends deadline, government has high hopes despite shaky reception from providers

29 Aug 2012

India’s Supreme Court has granted a reprieve to the cellcos affected by the mass cancellation of 2G licences in February this year, allowing them to continue operations until 18 January 2013, rather than 7 September 2012. Dow Jones Newswires reports that the extension followed confirmation earlier this week that the Department of Telecommunications (DoT) would not meet its 31 August deadline for completing the re-auction of spectrum. With bidding now due to begin in early November, the apex court extended the DoT’s deadline to 11 January 2013.

Despite flagging confidence in the nation’s telecoms sector, the Indian government has said that it is anticipating a great deal of interest in the upcoming spectrum auction. ‘We are expecting significant participation from the new operators and some of the existing operators which require additional spectrum may also participate in the auction’ the Economic Times cites Telecom Secretary R Chandrashekhar as saying. India has seen a number of operators quit the sector in the wake of February’s Supreme Court ruling cancelling 122 operating licences, claiming that regulatory uncertainty was the deciding factor. Amongst those that chose to close up shop in India are the UAE’s Etisalat, Bahrain Telecommunications Company (Batelco) and Augere. Sistema Shyam TeleServices and Uninor have also threatened to pull out of India, and neither has yet confirmed their participation in the tender. Most damaging to investor confidence has been the high reserve prices set for the auction, with operators and interest groups claiming that cellcos would be forced to raise tariffs by up to 50% to stand a chance of recouping their costs.