Videocon demands permission to use earlier bank guarantees for upcoming 2G auctions

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NEW DELHI: Mobile operator Videocon Telecommunications Ltd that lost its pan-India permit earlier this year when the Supreme Court quashed 122 licences issued by former telecoms minister A Raja, has demanded that the government offset the entry fee it had paid for its licences interest, if the company wins airwaves in the upcoming auctions.

The telco, in an October 5 communication to the government, said it had paid up about Rs 1507 core for its nation-wide permit in 2008. It further said that it had invested Rs 8,800 crore towards capital and operating expenditure for setting up telecom networks.

The mobile operator has also demanded that it be allowed to use the bank guarantees it had submitted with the telecoms department for its 21 pan-India permits (that were quashed by the apex court), for 'acquisition and allotment of new licenses and spectrum if the company were to be successful in the upcoming auctions'.

On Monday, the inter-ministerial panel on spectrum headed by finance minister P Chidambaram, while recommending a one-time spectrum charge on all existing players, also cleared the proposal to refund the entry fee paid by all companies whose permits were quashed by the Supreme Court. This is set to result in a Rs 8,000 crore outgo for the government. Telecom department officials told ET that while the Empowered Group of Ministers (EGoM) had endorsed the proposal to offset the entry fee paid up by companies such as Videocon in 2008, if they were successful in the auctions, the panel was against refunding the same with interest.

The telecom department (DoT) is yet to take a decision on bank guarantees submitted by the nine companies whose permits were quashed. Recently, the telecom tribunal had directed the DoT to return 50% of the Rs 555 crore financial bank guarantees submitted by Loop Telecom in 2008. Loop, which had shut down operations after the Supreme Court quashed its permit in its February 2 orders, has said that it will not participate in the upcoming 2G spectrum auctions scheduled to begin on November 12.

Videocon demands permission to use earlier bank guarantees for upcoming 2G auctions - The Economic Times
 
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