India’s government sides up with Sistema
The Indian subsidiary of Russia’s AFK Sistema, Sistema Shyam Teleservices (SSTL), has appealed the decision of the Supreme Court of India revoking 21 of the company’s 22 telecommunications licences, AFK reported. It has controlled SSTL since 2007, having invested $2.5 billion during this period. This operator used to work in just one of India’s telecommunications districts, Rajasthan, but now covers all the 22 districts, servicing over 15 million subscribers (ranked 9th among India’s operators). Yet, at the beginning of February, India’s Supreme Court cancelled 122 GSM and CDMA licences issued in 2008, including those of SSTL. The court upheld the state regulator’s arguments that mobile frequencies had been sold at low prices, thus damaging India’s budget to the tune of $34 billion. The operators may use the frequencies until 2 June 2012, after which they will be auctioned off.
SSTL argues that a more careful approach is needed for CDMA and GSM licences, and points out that it is the only company operating in India using CDMA standards.
The appeal period expired last Saturday, 3 March. As of Friday evening, appeals had been filed by nine of the eleven operators affected by the cancellation, as well as ex-Telecoms Minister Andimuthu Raja, who oversaw the allocation of the licences.
There is one more appellant in the case: the Indian government has lodged two appeals, a source close to an Indian operator told Vedomosti. Vedomosti has obtained copies of both appeals. In one, the Indian government says the four months assigned by the Supreme Court are not enough to prepare an auction for re-allocation of the cancelled licences.
The government’s second appeal requests that the Supreme Court review its February decision, taking into account fundamental political considerations. The government does not share the court’s position that exhaustible resources, such as radio frequencies, should only be allocated by auction, and it also challenges the ideology of the decision: it is not for the court to decide which policy is best for the country.