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2016 Supreme(Online)(TDSAT) 20
TELECOM DISPUTES SETTLEMENT AND APPELLATE TRIBUNAL
Aftab Alam, CJ, Dr. Kuldip Singh, J, Bipin Bihari Srivastava, J
Sistema Shyam Teleservices Ltd. – Appellant
Versus
Union of India – Respondent
Telecommunication Petition No.57 of 2015 | Telecommunication Petition No.58 of 2015 | Telecommunication Petition No.59 of 2015 | Telecommunication Petition No.60 of 2015 | Telecommunication Petition No.61 of 2015 | Telecommunication Petition No.62 of 2015 | Telecommunication Petition No.63 of 2015 | Telecommunication Petition No.64 of 2015
For the Appellants/Petitioners: A.S. Chandhiok, Amit Sibal, Mansoor Ali Shoket, Vibha Dhawan, Kunal Singh, N. Suri
For the Respondents: Vikramjit Banerjee, Bharat Sood
The petitioner is entitled to exchange non-contiguous spectrum blocks for operational efficiency, under contractual provisions that guarantee such rights, irrespective of later price adjustments in auctions.
Headnote:(A) Telecommunications Act - Sections relevant to spectrum allocation and permissions under Unified Licence - Petitioner sought reassignment of non-contiguous spectrum blocks to enable efficient service provision, citing TRAI recommendations - Court determined Government's refusal to allow exchange with another operator's non-liberalized spectrum was unjustified and required adherence to contractual terms, particularly given similar allowances made previously - Petitioner entitled to reconfiguration of frequency blocks without payment demands that were not applicable to others. (Paras 25-62)
(B) Spectrum Allocation - Principles of equity in treatment of service providers - A unilateral change in regulatory conditions affecting the transaction terms post-auction is impermissible; existing contractual obligations must be preserved regardless of price fluctuations in subsequent auctions. (Paras 63-67)
Facts of the case:
The petitioner, a telecom service provider, held non-contiguous spectrum blocks due to Government auction restrictions and sought a reassignment of frequencies for better efficiency. The Government maintained that it could not adjust frequencies without financial implications.
Findings of Court:
The court found the Government's stance unjust and inconsistent with prior arrangements made with other telecom entities regarding spectrum exchange.
Issues: Whether the petitioner has a legitimate claim to have its non-contiguous spectrum blocks rearranged in a manner that improves operational efficiency.
Ratio Decidendi: The court ruled that the petitioner’s contract terms guaranteed rights that could not be unilaterally altered, and similar treatment should be afforded to them as was given to other operators for spectrum configuration.
Result: Petitions allowed.
| Table of Content |
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| 1. arguments for spectrum contiguity (Para 12 , 13) |
ORDER
By Aftab Alam, Chairperson –
The Petitioner, Sistema Shyam is a telecom service provider. It holds spectrums in 800 MHz in eight service areas. In each of the eight service areas the spectrums held by the petitioner are under 5 MHz and are divided into blocks that are not contiguous but are at different spots in 800 MHz band. The petitioner wants its spectrum blocks in one contiguous series for a better and more efficient use of the spectrums and to that end seeks directions to the Government to
(i) give it frequencies (in the Government’s possession) that might be contiguous to some frequencies held by the petitioner in lieu of some other frequency held by the petitioner at a distant spot in the band and
(ii) allow it to exchange frequencies with other operators even though the spectrums held by them might not be “liberlised”, having been given to them bundled with their licencesunderthepreviousregime.
The facts of the case are simple and can be stated thus. In the 2G case the Supreme Court made the operative order in paragraph 102 of the judgement that containedinteraliathefollowingdirections:
“102. Intheresult,thewritpetitionsareallowedinthefollowingterms:
(i) The licences granted to the private respondents on or after 10.1.2008 pursuant to two press releases issued on 10.1.2008 and subsequent allocation of spectrum to the licensees are declared illegalandarequashed.
(ii) Theabovedirectionshallbecomeoperativeafterfourmonths.
(iii) Keeping in view the decision taken by the Central Government in 2011, TRAI shall make fresh recommendations for grant of licence and allocation of spectrum in 2G band in 22 Service Areas by auction, as was done for allocation of spectrum in 3G band.
(iv) The Central Government shall consider the recommendations of TRAI and take appropriate decision within next one month andfreshlicencesbegrantedbyauction.
(v) xxxxxxxx (vi) xxxxxxxx (vii) xxxxxxxx” (emphasisadded)
In pursuance of the Court’s direction, TRAI made its Recommendations on Auction of Spectrum on 23.04.2012 suggesting that the reserve price of spectrums in 800 MHz and 900 MHz bands should be two times the reserve price of spectrum 1 (2012)3SCC1 in 1800 MHz. And then, on a back reference made by the Government it gave its responseon10.052012inwhichitmadethefollowingrecommendation:
“In respect of 800 MHz, the amount of spectrum available for auction in some Circles is less than 5 MHz. As such, it is not possible with this spectrum, to offer all services that a truly liberalised spectrum can. Therefore, the Authority would be open to the Government fixing the Reserve price of 800 MHz spectrum at 1.3 times the 1800 MHz reserve price. This is only where 5 MHz spectrum is not being made available. The 1.3 factor is twice the value of the unliberalised spectrum in the 1800 MHz band, established by the experts (combined price of
<6.2 MHz and >6.2 MHz in the ration of 6.2:1.8) which bears a ratio of 1.3 to the recommendedreservepriceof1800MHz.”
The Government fixed the reserve price of spectrums in 1800 and 800 MHz bands in light of the recommendations made by TRAI and issued the notice inviting applications (NIA) on 28.09.2012 putting up the spectrums for auction, as directed by the Supreme Court. For this auction spectrum in 800 MHz was available in 21 out of 22 service areas; it was not available in the service area of Rajasthan. Also, in the 21 service areas where spectrum in 800 MHz was offered for sale, it was available in amounts less than 5 MHz and in spectrum blocks that were noncontiguous.
In this auction that took place in November 2012, out of the total of 295 MHz of spectrums in 1800 MHz that were offered for sale, 127.5 MHz was sold out. No bids were received for spectrums in 1800 MHz band in four service areas (Delhi, Mumbai, Karnataka and Rajasthan). Further, no bid at all was received in anyofthe21serviceareasforspectrumsin800MHzband.
After the November 2012 auction tha
