Vodafone is the second largest network operator in India with Bharti Airtel holding the lead by subscriber base. Vodafone has licences which cover the 900MHz and 1800Hz frequencies. The 20 years licences are due to expire in November 2014.
It appears that Vodafone had become complacent with the previous structure of maintaining licences and had neglected to follow the new procedure, which relies on the company bidding successfully in an auction. Vodafone appeared to be under the impression that it was automatically entitled to a licence extension and had earlier challenged the telecoms department’s decision to auction the spectrum. Bharti Airtel has come up against the same blockage.
“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.
India has made several regulatory new decisions which have caused operators to be wrong-footed. In addition, Vodafone is still in dispute on a $2.2 billion tax dispute with the Indian authorities.
Vodafone will need to take quick action if it hopes to maintain the licences it holds in India and any successful bid may be tied-up with a settlement on the tax dispute.