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Special Reference 1 of 2012

Special Reference 1 of 2012

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Published by: Bar & Bench on Sep 27, 2012
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Page 1
RE: SPECIAL REFERENCE NO.1 OF 2012[Under Article 143(1) of the Constitution of India]O P I N I O ND.K. JAIN,
In exercise of powers conferred under Article 143(1)of the Constitution of India, the President of India has on12
April, 2012, made the present Reference. The full textof the Reference (sans the annexures) is as follows:
in 1994, the Department of  Telecommunication, Government of India (“
”),issued 8 Cellular Mobile Telephone ServicesLicenses (“
CMTS Licenses
”), 2 in each of the fourMetro cities of Delhi, Mumbai, Kolkata and Chennaifor a period of 10 years (the “
1994 Licenses
”). The 1994 licensees were selected based onrankings achieved by them on the technical andfinancial evaluation based on parameters set outby the GoI in the tender and were required to paya fixed licence fee for initial three years andsubsequently based on number of subscriberssubject to minimum commitment mentioned in thetender document and licence agreement. The1994 Licenses issued by GoI mentioned that a
Page 2
cumulative maximum of upto 4.5 MHz in the 900MHz bands would be permitted based onappropriate justification. There was no separateupfront charge for the allocation of Spectrum tothe licensees, who only paid annual Spectrumusage charges, which will be subject to revisionfrom time to time and which under the terms of the license bore the nomenclature “licence feeand royalty”. A copy of the 1994 Licenses, alongwith a table setting out the pre-determinedLicence Fee as prescribed by DoT in the Tender, isannexed hereto as
Annexure I (Colly)
in December 1995, 34 CMTSLicenses were granted based on auction for 18telecommunication circles for a period of 10 years(the “
1995 Licenses
”). The 1995 Licensesmentioned that a cumulative maximum of up to4.4 MHz in the 900 MHz bands shall be permittedto the licensees, based on appropriate justification. There was no separate upfrontcharge for allocation of spectrum to the licenseeswho were also required to pay annual spectrumusage charges, which under the terms of thelicense bore the nomenclature “licence fee androyalty” which will be subject to revision from timeto time. A copy of the 1995 Licenses, along with atable setting out the fees payable by the highestbidder, is annexed hereto as
Annexure II (Colly)
in 1995, bids were also invited forbasic telephone service licenses (“
BTS Licenses
”)with the license fee payable for a 15 year period.Under the terms of the BTS Licenses, a licenseecould provide fixed line basic telephone servicesas well as wireless basic telephone services. Sixlicenses were granted in the year 1997-98 by wayof auction through tender for providing basictelecom services (the “
1997 BTS Licenses
”). The license terms, inter-alia, provided that basedon the availability of the equipment for Wireless inLocal Loop (WLL), in the world market, thespectrum in bands specified therein would be
Page 3
considered for allocation subject to the conditionsmentioned therein. There was no separate upfrontcharge for allocation of spectrum and thelicensees offering the basic wireless telephoneservice were required to pay annual Spectrumusage charges, which under the terms of thelicense bore the nomenclature “licence fee androyalty”. A sample copy of the 1997 BTS Licensescontaining the table setting out the license feespaid by the highest bidder is annexed hereto as
Annexure III (Colly)
in 1997, the Telecom RegulatoryAuthority of India Act, 1997 was enacted and the Telecom Regulatory Authority of India (the
”) was established.
on 1
April, 1999, the New Telecom Policy 1999 (“
NTP 1999
”) was broughtinto effect on the recommendation of a Group on Telecom (“
”) which had been constituted byGoI. A copy of NTP 1999 is annexed hereto as
Annexure IV
. NTP 1999 provided that CellularMobile Service Providers (“
”) would begranted a license for a period of 20 years on thepayment of a one-time entry fee and licence fee inthe form of revenue share. NTP 1999 alsoprovided that BTS (Fixed Service Provider or FSP)Licenses for providing both fixed and wireless(WLL) services would also be issued for a period of 20 years on payment of a one-time entry fee andlicence fee in the form of revenue share andprescribed charges for spectrum usage,appropriate level of which was to berecommended by TRAI. The licensees bothcellular and basic were also required to pay annualSpectrum usage charges.
based on NTP 1999, a migrationpackage for migration from fixed license fee toone time entry fee and licence fee based onrevenue share regime was offered to all theexisting licenses on 22
July, 1999. This came

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