2G licences won’t be cancelled, govt tells apex court

New Delhi: The 2G spectrum allocation irregularities during A Raja’s tenure as telecom minister continued to get bigger as the Centre admitted that 103 of the 122 mobile telephone licensees failed to roll out services, but said it would be unwise to cancel the agreements.
It said demand for cancellation of all allocations in 2008 at 2001 prices and their fresh auction could jeopardise foreign direct investments already made in the sector and suggested that levying penalty on them was the right course of action.
“Demand notices levying liquidated damages for failure to comply with the roll out obligation have also been issued up to February 9, 2011, in respect of 103 licences out of the 122 issued in 2008,” the Department of Telecom (DoT) said in an affidavit before the Supreme Court.
Petitioners Centre for Public Interest Litigation (CPIL) and Janata Party president Subramanian Swamy had said the licensees were obliged to start mobile telephone services within a year of allocation of spectrum and cover 90% of the area in a metro and 10% of non-metro area. Both had sought cancellation of all licences and their fresh auction.
The DoT said: “Issues relating to investments made and foreign direct investment receipts to the country may have to be also taken into consideration.” It also stated the response of the licensees to the cancellation-cum-penalty notices. The licensees took the stand that worldwide the start of services get delayed and could invite monetary penalty and not cancellation.
“If the licence is to be cancelled after it is acted upon, only on account of delayed roll out, the investment made in infrastructure etc would be rendered nugatory which may not be in public interest,” they said. The DoT said liquidated damages demand notices were issued after ascertaining the delay in meeting the roll out obligations.