Vodafone & Airtel both face an uncertain future thanks to India’s Department of Telecommunications (DoT) rejecting their requests for interim extension of 2G licenses. What’s going to hurt these companies further is that these licenses are for the prime circles of Delhi, Mumbai and Kolkata.
Why are these players being targeted?
Vodafone as well as Airtel has always been one the most active telecom players in the country. Good services, coupled with relatively dependable network & lucrative tariff plans ensured they kept on adding not just individual, but corporate customers as well.
However, these two are suffering since they did not toe the line of the Government. Our readers are well aware of the 2G Scam & its aftermath. These companies incidentally stayed away from the recently concluded re-auctions for the 2G spectrum allocation. Maintaining their claim of innocence & no wrongdoings, the companies demanded an ‘Extension as per Clause 4.1’, which sort of assured immunity to companies who had rightfully obtained licenses.
The Clause: Under Clause 4.1 of the license agreement, the government can extend the period of license by 10 years at one time, if the request is made by the operator during the 19th year of the license period.
The crux of the matter lies in the fact that many companies chose to illegally acquire licenses by offering kick-backs to the then telecom minister A Raja. In this occurrence Vodafone clearly benefited as it was not among those that had acquired any of the 122 2G licenses awarded. Hence the company feels it is right to demand an extension.
But DoT feels otherwise, “Unless you participate in auctions and get your bid confirmed, you would not be entitled to wireless license, which is a requisite”. Accordingly, in an official communication to both these companies DoT has clearly stipulated that, “Under the new policy on spectrum allocation, airwaves have been separated from license. Therefore, the firm(s) must participate in the auctions to be held later this year to access airwaves at market price.”
With the licenses officially set to expire next year, the two companies have very little time to fight for an extension. Else they risk plunging their customers into the dark ages of no cell reception. Do let us know your views about this stand-off.
Image Courtesy | indiatoday.intoday.in