Rejection of the licence extension plea comes as a serious jolt to Vodafone, putting its services and operations in peril.
The Department of Telecommunications (DoT) has rejected Vodafone's plea to extend licence in seven circles – Maharashtra, Gujarat and UP (East), Kerala, Tamil Nadu, Haryana and Rajasthan. Vodafone had sought an extension of 10 years as its 20-year licence is set to expire in December 2015.
According to the telecom department, Vodafone should buy unified licences and obtain spectrum through “market-related process for continuing the service in the service areas”. The DoT says "circumstances have materially changed" since the original licences were issued in 1995, ruling out the possibility for an immediate extension. "Your request for extension of licences cannot be acceded to," DoT said. "Vodafone may apply for Unified Licence at appropriate time and obtain spectrum through market-related process for continuing the service in the service areas."
Vodafone has previously sought extension of licences in order to ensure uninterrupted services, operations and most importantly retain the spectrum. A similar plea was made last year ahead of spectrum bidding in Delhi, Mumbai and Kolkata earlier this year, in order to retain 900 MHz band. The plea was rejected by the government. The matter is pending with courts right now.
Rejection of the licence extension plea comes as a serious jolt to the operator, putting its services and operations in jeopardy. The operators owns spectrum in both 900 MHz and 1,800 MHz bands in the seven circles. Fresh auction is likely to put further monetary burden on the operator.
While turning down Vodafone's plea, the telecom department pointed out the Supreme Court's February 2012 verdict that had called for distribution of scarce natural resources like spectrum through auctions. It also mentioned the National Telecom Policy that envisages de-linking spectrum from future licences and making it available through market-related processes like auctions.
Also read: Will the Modi government lead to a telecom industry revival?
Source: TOI, TelecomTiger
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