India’s Department of Telecommunications (DoT) has rejected Vodafone’s request to renew its 2G licences in Delhi, Mumbai and Kolkata.
The licences, which cover 900MHz and 1800MHz frequencies and are valid for 20 years, are due to expire in November 2014.
Vodafone can only maintain 2G service in these regions, says DoT, if it successfully bids for the frequencies in an auction.
Bharti Airtel has been told too that it must bid for its 2G licences that are due to expire in 2014.
The auction of 2G spectrum has already begun, but, according to a Reuters report, Vodafone did not enter the bidding. The operator believed it was entitled to a licence extension.
In February Vodafone filed a petition that challenged the telecoms department’s decision to auction the spectrum.
“Vodafone is deeply disappointed with the summary rejection of its request for extension of licenses in Delhi, Mumbai and Kolkata service areas,” Vodafone said in statement.
It is not the first time that regulatory decisions in India have wrong-footed operators.
Last year, India’s Supreme Court cancelled 122 2G licences that were awarded in 2008 on the grounds that certain local companies’ were favoured illegally in the selection process. The licences were then auctioned off, much to the chagrin of foreign investors that had partnered with local companies (which had acquired the 2G licences) at considerable expense.
In this instance Vodafone benefitted, since it was not among those that had acquired any of the 122 2G licences awarded. Last November, Vodafone India acquired 2G spectrum in 14 telecom circles (or regions) in the government’s subsequent auction of 1800MHz spectrum.
Vodafone, however, is still embroiled in a $2.2 billion dispute with Indian tax authorities over its 2007 acquisition of Hutchison Whampoa’s Indian operations.