Band aid

The Supreme Court order on Thursday has created a window of opportunity for a segment of telecom companies to contest the government's plan to refarm the 900 mhz spectrum. Since February 2012, when the court order led to the cancellation of 122 licences, and the consequent empty slots in the airwaves, the government has been planning to bundle the allocation of airwaves in such a way that legacy issues are settled. The court order had impacted the players in the 1,800 mhz and 800 mhz bands, but had not touched those plying their trade in the 900 band. The logic was that they had come earlier and their operations were outside the purview of the fresh batch of licences given out since 2008.

But with past allocations, too, coming under question, the government raked in these bands as well. In any case, since, in the telecom business, the 900 mhz band has a better propagation characteristic, the operators coming in late had always claimed they suffered a disadvantage as they did not have the airwave space in this band to offer their services. The government was willing to buy this argument, and clubbing it with the issue of setting an auctioned price, had decided to set fresh allocation rules for this band too.

This is where Thursday's court ruling has come in handy. The court has said that matters regarding the 900 band were beyond the case being decided on. It observed that the appropriate forum to decide on them was the telecom regulator or tribunal. This complicates matters for the government as it tries to make the upcoming auction for the 1,800 mhz slots attractive. As long as operators were worried about losing the 900 band, they were more willing to consider migrating to the 1,800 band and therefore bid at the auctions. Now, with the spectre less compelling for the companies, there may be cause for more concern for the telecom department. An issue left unaddressed is the fate of operators like Sistema, whose telecom roll-out plans had got caught in the crossfire between the courts and the companies. The matter involves both the issue of delivery of justice from Indian courts and the treatment of foreign investment in the country. The government must step in.

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