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India Court Delays Phone Permits Cancellation by 3 Months

April 24 (Bloomberg) -- India’s Supreme Court postponed by three months the deadline for cancellation of 122 mobile-phone licenses to Sept. 7 and said the government must complete its auction of the wireless airwaves within that time.

“If you file for any further direction, we will impose a fine because you will be wasting the court’s time,” Supreme Court Judge G.S. Singhvi said today, rejecting the government’s request for a 400-day window to complete the auction of the canceled airwaves permits. The court had earlier set a four-month deadline for the completion of the auction.

Companies including Norway’s Telenor ASA, Russia’s AFK Sistema and Emirates Telecommunications Corp., or Etisalat, will now gain an extra three months to continue providing services to their Indian subscribers, while considering their options. India’s telecommunications regulator yesterday proposed an 11-fold increase in license fees for the spectrum to offer second-generation mobile-phone services, a move that the Cellular Operators Association of India said could deter incumbents from “reacquiring their spectrum.”

Today’s decision comes almost a month before the Supreme Court’s June 2 auction deadline which it set in February as part of its decision to cancel the 122 permits following a report by the nation’s auditor that said they were sold at “unbelievably low prices” in 2008. The sales may have cost the exchequer as much as $31 billion, according to the report.

“The order comes as a huge relief to our customers, employees, investors and all members of the telecom ecosystem,” Sistema Shyam Teleservices Ltd., Sistema’s local venture, said in an e-mailed statement today.

Telenor spokesman Glenn Mandelid did not answer two calls to his mobile phone.

To contact the reporter on this story: Kartikay Mehrotra in New Delhi at kmehrotra2@bloomberg.net

To contact the editor responsible for this story: Sam Nagarajan at samnagarajan@bloomberg.net

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