DoT rejects Vodafone’s request to renew permits in seven circles

[mmadhankumar]

The Department of Telecommunications (DoT) has rejected Vodafone India's request to renew its licences in seven regions where they are expiring in December next year as well as to keep the associated spectrum.

The department has instead told the country's No. 2 telecom operator by number of subscribers to convert the permits into unified licenses and buy bandwidth in an auction that is likely to be held later this year.

In May, Vodafone applied for extending its licences in Kerala, Tamil Nadu, Haryana, Rajasthan, Uttar Pradesh East, Maharashtra and Gujarat under the licensing rules in 1995, when it received these licenses. Rules at the time allowed operators to seek extension to their permits for 10 years after the initial term of 20 years ends.

In a note rejecting the request, DoT said too much had changed in the Indian telecom scene for such an extension to be granted, and that Vodafone would need to participate in a competitive auction to retain the airwaves.

The Supreme Court in 2012 told the government to conduct auctions to allot scarce resources such as airwaves, after it revoked 122 telecom licences given in 2008 under 1994-95 regulations. Since then, the government has conducted three airwave auctions, including in this February.

DoT had rejected Vodafone's request to renew its licences before the February auction too. The company then wanted the government to extend its permits in Kolkata, Delhi and Mumbai where they would expire in this November. Vodafone and bigger rival Bharti Airtel, whose licences would be expiring in Kolkata and Delhi, had to buy back airwaves in the February sale, paying top dollars so that they can continue uninterrupted services in those circles.

Vodafone had last year moved the Delhi High Court - much before the February auction - challenging DoT's decision not to extend the licences in Kolkata, Delhi and Mumbai. An order on this is still expected.

The significance of the earlier awarded spectrum is that it is in the 900 MHz band, which has farther reach and penetrates more easily through walls compared with the 1800 MHz and higher bands that are freshly available. Because of this, operators scrambled for the airwaves during the February sale, driving up the price in Mumbai and Delhi.

As many as 29 mobile permits of top operators including Bharti Airtel, Vodafone, Idea Cellular and Reliance Communications are due for renewal between December 2015 and April 2016. Each of them is expected to be well contested as the incumbent operators and the new entrant, Reliance Jio Infocomm, vie for these airwaves.

In a recent interview to ET, Vodafone India chief Marten Pieters said the company would love to have 900 MHz everywhere, "but reality is there are more takers", indicating that the competition for the resource will be tough. "We will fight for where we have it because it is painful to change the network," he had said.


DoT rejects Vodafone’s request to renew permits in seven circles - The Economic Times