Following India’s Supreme Court decision in early February to cancel 122 2G licences that, it says, were illegally attributed, several affected companies have taken legal steps to protect their investments in the country.
Most recently, on Saturday…
Following India’s Supreme Court decision in early February to cancel 122 2G licences that, it says, were illegally attributed, several affected companies have taken legal steps to protect their investments in the country.
Most recently, on Saturday [3 March], Indian mobile JV Sistema Shyam TeleServices (SSTL) filed a review petition before the Supreme Court to overturn the judgment, which saw it losing 21 licences.
Russian financial group Sistema, which owns a 56.68% stake in SSTL, had previously said that it “believes that the cancellation of SSTL’s licences following Sistema’s investment of billions of dollars into the Indian cellular sector is contrary to India’s obligations under the [Bilateral Investment Treaty between Russia and India], including obligations to provide investments with full protection and security and obligations not to expropriate investments.”
The Russian company added if the dispute was not resolved by the end of August 2012, it would consider commencing proceedings against the Indian government as provided in the BIT.
A couple of weeks ago, number four Idea Cellular also applied for clarification with the Supreme Court, arguing that the revocation order should not apply to its licences.
“Idea’s licence applications were unjustly delayed until 2008, otherwise they fall in the same category as other 2004 and 2006 UASL [Unified Access Service Licensing] applications mentioned in the judgment, but which do not form part of the cancelled licences.”
Several other operators, including Tata Teleservices, Uninor and Videocon, have also reportedly sought clarification from the Supreme Court on its judgment.
Meanwhile, India’s Siva Group, which holds a majority stake in mobile operator S Tel, reportedly wrote a letter to Prime Minister Manmohan Singh offering to surrender the company’s 2G and 3G licences, as well as its infrastructure, to the government in return for its investment.
The company added that it was seeking a fair and equitable solution from Indian authorities.
This decision to exit the sector comes after Siva’s partner in S Tel, Bahrain Telecommunications Company (Batelco), said it would sell its stake in the JV to Siva following the licence cancellation.
UAE-Etisalat also said it would shut down its Indian business, Etisalat DB.
In the face of increasing pressure from mobile operators, the government is reportedly seeking clearer directions from the Supreme Court on the timing of a new 2G auction in order to reassure investors.
It was first announced that the auction would take place before the end of May. But the telecom ministry was forced to revise this timeline, saying that the process would take at least 400 days.
This means that the operators that will lose their 2G licences within the next few weeks will have to wait approximately a year before they can provide 2G services again
