The deadline for auction of new 2G spectrum licenses has been extended till August 31, 2012 by the Supreme Court. This has been done in light of the 122 telecom licenses that were cancelled lately. The operators with cancelled licenses can operate till 7th of September, 2012. This has been done to avoid any trouble to the subscribers of these telecom companies.
In Feb this year Supreme Court had cancelled 122 2G licenses issued by the then Telecom Minister A Raja in 2008. The court had cancelled them citing flawed basis like first come first serve to allot important resources like airwaves.
The Supreme Court rejected Centre's plea to allot 400 days for the 2G auction.
The Supreme Court said, "the entire exercise would have been avoided if little effort was made earlier. A fact has been brought to our notice that 7800 crores were lost on each license."
"We are still not in position to believe that officers of the DoT (Department of Telecommunications) are so naive that they overlooked all this. So we are not in a position to accept 400 days of extension," the court added.
TRAI had recommended a high base price for auctioning the 2G spectrum. The court had asked TRAI to make proposals on the 2G auction by June. TRAI however justified its setting steep prices because it feels that this spectrum has varied uses like in the 2G, 3G, etc. Telecom stocks fell because of these recommendations.
The extension of the operational deadline till September 7 for telecom companies whose licenses have been cancelled will benefit their subscribers and would allow them to move smoothly over to other operators. However we still hope that TRAI reverses on its proposal for steep hike in 2G prices.