Foreign investors press India over 2G permits

Dylan Bushell-Embling
10 Dec 2012

With the January 18 deadline for the cancellation of Indian 2G licenses looming closer, foreign participants in the nation's telecom market have ramped up their legal wrangling to salvage their investments.

Russian conglomerate Sistema has pledged to follow through with threats to seek billions of dollars in compensation via international arbitration, unless India agrees to reinstate Indian JV Sistema Shyam operating licenses before the annual Indo-Russian summit commences on December 24.

The company has written a stern letter to the external affairs and telecom ministries, warning that the issue is likely to dominate the summit – and could ultimately harm Indian-Russian trade relations - unless the situation is amicably resolved, Economic Times reported.

Sistema Shyam and eight other operators stand to lose their licenses to operate 2G services on January 18 next year, once the court's decision to cancel the 122 2G licenses allocated during 2008 finally takes effect.

India's minister of state for communications and IT has meanwhile revealed that five other foreign investors besides Sistema have filed legal notices seeking settlements of the dispute under bilaterial investment treaties.

These include Malaysia's Axiata and its two Indian investment units – which are investors in Idea Cellular – as well as Telenor's Asian unit and several foreign investors in Loop Telecom.

The minister said the Department of Telecom has convened an inter-ministerial group to develop a co-ordinated response to the legal notices and any settlement claims.

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