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Why Vodafone Thinks India’s Rejection Of Its License Extension Is Wrong

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Vodafone India has informed that it has sent a letter to India’s Department of Telecommunication (DoT), questioning the rejection of its application for license extension in Delhi, Mumbai and Kolkata service areas.

Vodafone had previously sought an extension of its license in three circles that were up for renewal in 2014, under the clause 4.1 of the license agreement which allowed the government to extend the license for an additional 10 years. However, DoT had rejected Vodafone’s license extension application last week, as indicated by a PTI report (via NDTV Gadgets). DoT had then apparently said that Vodafone should participate in the spectrum auctions and secure spectrum in these areas if it wanted to retain its license and continue its operations. Vodafone India however had previously claimed that it was entitled to a license extension in these circles where it operates in the 900MHz spectrum band as per mutually agreeable terms.

Why Vodafone Thinks DoT’s Rejection Is Wrong

As per the letter, Vodafone India claims that this rejection has several fundamental flaws, contradictions, jurisdictional errors and DoT has not only misinterpreted the clause 4.1 of the license agreement but also made it redundant. The company has now asked DoT to withdraw its rejection letter within three days. Here’s what the company said in the letter:

– Vodafone claims that while DoT stated that the license extension was considered based on the new terms and conditions, it had not provided Vodafone with the new terms, despite repeated requests by the telco, indicating that DoT had not even considered their application as per the clause 4.1 of the license agreement.

– Vodafone had not asked an extension for free or on the same terms and conditions, contrary to the DoT’s statement that Vodafone was insisting on the same terms and conditions in its plea. The company said that it is still awaiting the new terms and conditions from DoT for consideration and mutual discussion as mandated by the clause 4.1 of the license agreement.

– DoT has wrongly interpreted the clause 4.1 by stating that the licenses were for a fixed period of 20 years and operators including Vodafone have no right to continue operations after the expiry of this period, completely ignoring the fact that Vodafone has a right to license extension and the period of license cannot be considered out of the agreement.

– DoT has acted against public interest with this rejection, since it will remove the benefit of 50-60% of the market, which will lead to disruption of service in these areas. The company said that this indicates a pre-determined mind and not a fair consideration of its valid request.

– DoT has made self-contradictory and inconsistent statements on this issue, since on one hand it states that obtaining spectrum through market related process was optional and on other hand, it states that Vodafone is not entitled to this spectrum, unless it participates in the spectrum auctions.

– DoT is wrongly applying the provisions of National Telecom Policy (NTP) 2012, stating that spectrum and licenses are already de-linked, however the company noted that these provisions will apply only for future licenses, since it continues to be governed by the provisions of NTP 1999 and NTP 2012 has no retrospective effect and any subsequent change in the policy cannot to be applied to licenses issued earlier.

– DoT has completely disregarded the company’s network investments in the country, its sincere operations of the license for the past 18 years and its contribution to the revenues of the exchequer and to the national teledensity objectives.

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