Unsuccessful bidders and telecom companies that kept out of the first round of fresh auctions for 2G spectrum will not be allowed to provide services, the Supreme Court said on Monday.

The apex court asked the Government to take a position on the issue and said the telecom companies that continued operations after the February 2, 2012 verdict will have to make payment based on the reserve price fixed for the fresh auction.

‘More litigation’

The court had allowed the telecom companies whose licences were quashed by the verdict last year to continue operations till the fresh auction for 2G spectrum was completed.

“You (Department of Telecommunication) have to take a position on those who have been unsuccessful in the auction conducted on November 12 and 13, 2012. They cannot be allowed to operate in the events when there are bidders who have been successful. Those who did not go for the bid are also not entitled to continue,” the Bench of Justices G. S. Singhvi and K. S. Radhakrishnan said while reserving its order on the issue.

The Bench said allowing those that were unsuccessful and had not participated in the auction to continue with operation would generate more litigation.

It said the auction will have to be conducted for all those licences for 2G spectrum for which letters of intent were issued in January 2008 and that were quashed by the apex court’s February 2012 judgment.

“Whatever spectrum was released as a result of the quashing of licences must be put on auction,” the bench said, adding that it was only concerned with the 1,800 MHz and 800 MHz bands and not with 900 MHz. The apex court noted that one or the other telecom companies was coming up with different interpretations of its order and said: “We do not appreciate that there is always cartelisation in this matter. Some are trying to frustrate the process of auction.”

Meanwhile, Sistema Shyam Teleservices said it will take a decision on February 22 to choose the circles when the second round of auction commences, on March 11.

Deadline extension

The apex court on January 14 had extended till February 4 the January 18 deadline for existing operators of 2G spectrum to carry out operations.

The deadline was further extended till further orders.

The court in the earlier hearing wanted the Centre to spell out the price to be charged from the telecom companies for continuing with their services after their licences were cancelled last year.

By the apex court order, 21 licences of Sistema Shyam Teleservices (MTS), 16 permits of Telenor controlled Uninor, 15 of Videocon and 3 CDMA permits of Tata Teleservices stood cancelled from January 18, affecting around 25 crore subscribers.

Telenor is in the process of transferring the business of Uninor in six circles to new entity Telewings Communications, which recently won spectrum.

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