Unfortunate that we are being made to suffer: Idea Cellular

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Unfortunate that we are being made to suffer: Idea Cellular

Responding to the Supreme Court judgement cancelling licenses granted by former minister A Raja, Idea Cellular says that they have ‘unnecessarily been caught in this situation of cancelled licenses’, just because the licenses were granted in January, 2008 which was as late as 18 months from the date of application.

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Moneycontrol Bureau

Responding to the Supreme Court judgement cancelling licenses granted by former minister A Raja, Idea Cellular says that they have 'unnecessarily been caught in this situation of cancelled licenses', just because the licenses were granted in January, 2008, which was as late as 18 months from the date of application.

Idea had applied for nine new licenses in 2006, long before the Government took a decision to award licenses in 2008, says a press release from the company. 

The Supreme Court today cancelled as many as 112 licenses which includes Idea's nine licenses and four of erstwhile Spice Communications which stands merged with Idea Cellular.

Currently, the telecom operator has rolled out services in seven license areas including Tamil Nadu, Kolkata, West Bengal, Orissa, Assam, NESA and Jammu & Kashmir. It has about six million subscribers and these regions account for about 5% of Idea's cumulative capex, 4% of its revenue, and are EBITDA loss making circles. 

"It is unfortunate that a serious incumbent operator like Idea Cellular is being made to suffer due to this cancellation of licenses, despite being fully compliant at each stage of the license allocation process," the press statement says.

It also claims that as per the 'first-come-first-serve' policy, the company must ideally have got its licenses long before 2008. This seems to have been recognized by the Supreme Court as they have not charged Idea any penalty.

The stock did a small V-turn during trade today, rising up to Rs 99 prior to the SC judgment and immediately corrected to Rs 89. Idea however closed the day with a 2.5% gain over the previous closing at Rs 95.

Padma Venkatraman
padma.venkatraman@network18online.com