DoT rejects Bharti, Vodafone demand for license extension

It's a set back for Bharti Airtel and Vodafone. The Department of Telecom (DoT) has rejected the representations of these two companies seeking an extension of their licenses along with their existing 900 mhz band spectrum. The DoT is clear that the license has already been de-linked from the spectrum and that these companies will have to win back spectrum by paying a market determined price, reports Malvika Jain of CNBC-TV18.

The DoT will soon formally reject Bharti Airtel and Vodafone's demand for extending their license along with the 900 Mhz band spectrum auction. Official sources have told CNBC TV18 that the response would be sent this week and would insist that these companies will have to re-acquire their existing 900 Mhz band spectrum by participating in a mandatory auction proposed to be held later this year.
This development follows the Delhi High Court telling the department to make its stance clear on the matter. These firms will only be able to retain 2.5 Mhz of their existing 900 Mhz band spectrum and will have to bid for the rest. The auction discovered price will apply to the retained portion as well.
The DoT has also rejected the contention of the telcos that they should be allowed to continue with their existing licenses. As per the new telecom policy, these companies will have to switch to the Unified Licensing framework once their existing licenses expire. The decision, which will be soon conveyed formally to the companies, is likely to challenged once again by the companies, who could approach the Delhi High Court.
Although the companies will only respond once the formal order reaches them, Vodafone in the past made it clear that such a decision would be arbitrary and disruptive to its business plans. Vodafone said, it believes that it is entitled to a fair and reasonable extension of its license as per mutually agreeable terms. Both the policy and license provide for continuity and this action of DoT to arbitrarily withdraw the 900 MHz spectrum is not only against the provisions of policy and license but also disruptive and against public interest.
This development will mark yet another chapter in the ongoing protracted legal battles between Indian telecom operators and the government and could well cast a shadow on the proposed refarming agenda as well as the expected revenue from spectrum sales for the exchequer.