The Department of Telecom is looking to cancel the licences of some of the new operators even before the 4-month deadline set by the Supreme Court on grounds that these players were not eligible at the time of applying for mobile permits.
This option is being considered by the DoT in a bid to put the onus of the 2G spectrum mess on the new operators instead of the Government's flawed policy.
The Supreme Court ordered the Government to cancel all 122 licences issued on or after January 2008 on grounds that the process of licence allocation was flawed. The Court had declined to take a view on the CAG report because it was being examined by the Joint Parliamentary Committee.
Some of the affected players have indicated that they will use the apex court's observations against the process followed by the Government to claim damages. Therefore DoT is looking to minimise legal action by cancelling the licences based on CAG's observation instead of the apex court ruling, according to Government sources.
According to an internal DoT note, legal view is being taken on whether licences of the new operators can be cancelled based on the observations made by the Comptroller and Auditor General (CAG), which had blamed operators including Swan Telecom (Etisalat DB), Unitech Wireless and Loop Telecom for misrepresenting facts at the time of applying for licences. The CAG had said that these players were not eligible at the time of applying for licences and hence they should be cancelled.
While the companies have refuted the allegations made by CAG, the Department of Telecom had sent show cause notices to these companies with a 60-day notice period on the basis of the CAG report. And even before the Department could take further action, the Supreme Court on February 2 gave its landmark ruling.
“The apex court has not barred termination of licence on account of ineligibility of the applicant companies, as pointed out by the CAG report, prior to the expiry of 4 months,” an internal DoT note stated. DoT officials, however, said that future action will be taken after receiving legal opinion on the issue. The apex court's ruling blaming the ‘flawed' Government policy has left the Telecom Ministry embarrassed as it had been saying that there was nothing wrong with the First-Come-First-Served principle for allocating licences.