The Indian Government’s Telecom Ministry headed by Mr. Kapil Sibal has reportedly refused, to extend Telecom licences that expire in Nov 2014. Those seeking extension include Airtel (in Delhi & Kolkata circles), and Vodafone (in Delhi, Mumbai & Kolkata circles). Their license extension implies the use of Spectrum that they have in possession since last 20 years. Idea and Reliance licenses come up for renewal only in 2015.
As per licensing conditions then, Government has drafted it in such a way that the licenses could be renewed upon mutually acceptable terms without any clarity. However, Airtel and Vodafone are likely to litigate against the Government’s decision on license extension, adding to a long list of pending litigation in the sector.
Since the failure of March 2013 auction noise levels in the Indian telecom sector have risen sharply with issues like DoT’s penalty and order to stop 3G intra-circle roaming, legal summons to key telecom executives (including Bharti Airtel chairman Mr. Sunil Mittal) and now, DoT’s refusal to extend licenses. All this appears to be happening at the behest of one Businessman from Mumbai who has unrealistic Telecommunications Ambition and maybe filling the pockets of Telecom Minister as well as the Congress Party.
The government had cut reserve price for the 800MHz band by 50% as this band saw no bidders. Reserve price for un-bid 1800MHz circles was also cut by 30%. Against this backdrop, there is an expectation that the government will review spectrum pricing again in light of failed March 2013 auctions that saw no bidders for 1800 & 900Mhz. We can expect one more Auction soon atleast for 1800MHz Spectrum Band. High noise levels on policy issues hurt investor sentiment across industries and is bad for the Indian Economy in general.