Telcos withdraw case against telecom regulator’s proposal

Telcos withdraw case against telecom regulator’s proposal
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First Published: Tue, May 25 2010. 10 50 PM IST
Updated: Tue, May 25 2010. 10 50 PM IST
New Delhi: India’s top phone company Bharti Airtel Ltd, and rivals Vodafone Essar Ltd and Idea Cellular Ltd have withdrawn the case they brought against the telecom regulator’s recommendations on 2G spectrum, including a proposal to charge them a one-time fee for holding radio waves beyond 6.2 MHz.
The three withdrew the case from the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on Tuesday after the tribunal refused to hear the case against the Telecom Regulatory Authority of India (Trai) on grounds that it lacked jurisdiction to do so and declined to provide them interim relief.
“By no stretch of imagination can a recommendation amount to decision of Trai,” the tribunal observed.
Trai has recommended that existing telecom companies with spectrum of more than 6.2MHz pay a one-time fee based on 3G (third generation) prices for the remaining years that the licences are valid. If adopted, the recommendation would lead to a higher burden on telecom firms that are already hurting from intense price competition.
Shares of Bharti Airtel and Idea have dipped significantly since Trai made the recommendations on 11 May.
Bharti Airtel shares fell 0.73%, or Rs1.95, to Rs264 on the Bombay Stock Exchange (BSE) on Tuesday while the BSE’s benchmark Sensex shed 2.71%, or 447.07 points, to 16,022.48. Idea Cellular lost 1.25%, or Re0.65, to close at Rs51.50.
Bharti, Vodafone and Idea Cellular approached TDSAT on Monday. On Tuesday, senior lawyer C.A. Sundaram, representing the telecom firms, sought the intervention of the tribunal, arguing that a policy change would lead to financial losses for the companies and that the tribunal was an appropriate forum to hear the case.
The tribunal, however, asked the telcos to file the case in another forum, saying it does not have the jurisdiction to hear cases arising out of Trai recommendations.
The phone firms are now considering whether to approach the Delhi high court.
“We are looking into the matter, but are yet to decide on the future course of action,” the regulatory head of one of the three telcos said on the condition of anonymity because of the sensitive nature of the issue.
Phone companies have also criticised Trai for trying to cap spectrum at 8MHz in all telecom circles, except New Delhi and Mumbai, where the limit is 10MHz; they say it would restrict future prospects of the telcos.
Trai has also come under attack for recommending refarming of spectrum under which phone companies holding spectrum in the 900MHz band would be asked to return spectrum as and when their licences come up for renewal. They would be given 1,800MHz in return, which will mean moving to a less efficient spectrum.
The department of telecommunications (DoT) has formed an internal committee to look into the recommendations and give its views by the end of this week.
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First Published: Tue, May 25 2010. 10 50 PM IST
More Topics: TDSAT | 2G | GSM | Airtel | Vodafone |