Telecom operations in India were in doldrums in the year 2012. The licences of many telecom service providers involved in 2G spectrum allocation were cancelled after the directions of Supreme Court of India.
Even taxation issues were in limelight when Vodafone dragged the disputed tax to the level of Supreme Court and won the case. Now Indian government has once again served a tax due notice upon Vodafone. Vodafone has reacted to the same by denying any pending tax payments and has made Vodafone’s intention of invoking international arbitration for tax disputes with India very clear.
One of the telecom operators whose licence was cancelled by the Supreme Court is MTS. The Russian industrial group Sistema owns 57% of shareholding and stakes in the MTS and the remaining is with its Indian partner. MTS has also made it clear that it will continue its operations after its licences expire on 18 January 2013. The company is optimistic for a favourable decision in its favour to an appeal filed by it against a decision in 2012 to cancel its licences.
Telecom Regulatory Authority of India (TRAI) has already told all telecom operators affected to tell their customers of the expiry of the licences after 18 January. MTS has responded by saying it “wishes to inform millions of its customers that being fully committed to its customers and the investments it has made in India, it intends to continue its operations beyond 18 January 2013 and in this context has taken and is taking all the possible steps, to ensure the continuity of its services beyond 18 January 2013”.
MTS has already filed a curative petition against the judgment seeking to annul the cancellation of its licenses. MTS believes that it has a very good case in the curative petition both in facts and law and is hopeful of a favourable order of restoration of its licences.