The Supreme Court's judgment on Thursday scrapping 122 telecom licences granted in 2008 and clearly defining that auction should be the most preferred route for granting spectrum, may well trigger the series of reforms by a government hit by protests over policy paralysis and criticism for a series of scandals.
For telecom service providers, the game may change.
The verdict is set to hasten the process of implementing a new telecom policy (NTP 2011) that will attempt at corruption-proofing spectrum allotment by delinking it from licences and, allowing the sharing, trading of spectrum and facilitating resale at the service providers’ level.
Addressing a press conference on Thursday, Sibal said the judgment had given clarity on issues plaguing the sector. He said the government will delink 2G license from spectrum allocation and the verdict will not affect subscribers.
Spectrum will be auctioned, he said, and Telecom Regulatory Authority of India (Trai) will prepare the guidelines. He also hinted at allowing all companies to bid for spectrum.
The draft policy, unveiled in October, envisages sale of spectrum to operators through market-linked processes, including auctions. Start-up spectrum was issued to the operators on a first-come-first-served basis at R1,650 crore for pan-India spectrum.
Both the low price and manner of allocation were at the heart of the scam.
“The government will initiate steps to enact a spectrum act that will deal all issues connected with wireless licences and their terms and conditions," said an official.
"There was a complete logjam on the telecom policy front due to the 2G scam. But the SC ruling will set the process of setting the house in order. It will definitely bring more transparency and accountability into the sector," said Kamlesh Bhatia research director at Gartner.
“This should facilitate the acceleration of growth of this sector, and we look forward to conducive government policies ... to encourage the required investments in telecom services,” said Kiran Karnnik, chairman of CII's national committee on telecom and broadband.