Bad news for Idea, Spice, HFCL

By SiliconIndia   |   Monday, 24 December 2007, 08:00 Hrs
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New Delhi: The process of issuing letters of intent (LoIs), which already drew flak from major telecom players, is about to face a fresh legal hurdle, reported The Times of India.

A top DoT official told The Times of India that there is a growing consensus within the DoT to award inter se priority amongst new entrants based on date of payment of license fee rather than the date of application.

The companies such as ByCell (which applied in January 2006), Idea (June 2006), Spice (August 2006), Swan/Cheetah (March 2007), HFCL (May 2007), S-Tel (July 2007) and Parvsnath (August 2007), will lose their place in the queue with this decision. They have been in the queue for almost 12 to 22 months for spectrum.

With DoT deciding only to process applications received before September 25, it appears that companies like IndiaBulls, Unitech, Allianze and Shipping Stop (Ruias) may now stand some chance of securing spectrum, which was almost ruled out earlier.

Implementing inter se priority based on date of payment could invite a legal challenge from companies like Idea, Spice and HFCL. These companies are already feeling short-changed due to the inclusion of Reliance and possibly Tatas in the inter se priority list ahead of them due to the crossover spectrum policy.

They already have an appeal pending in TDSAT opposing the crossover policy. A legal challenge is also expected from companies which have been left out of the September 25 cut-off date.

They could now argue that if the basis of inter se priority is date of payment and not the date of application, then all applicants should be given an equal opportunity to make a rush for payments.

The DoT has received nearly 575 applications from 46 companies all chasing a bargain price of $410.27 million for pan-India spectrum. The arbitrage margins from resale are expected to be from $1 billion to $1.25 billion. Naturally, Sanchar Bhawan has become a battleground for spectrum hunters, who are buying into every little bit of speculation and insider information in the hope that this single gamble will turn them into billionaires overnight.

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