The Department of Telecom has rejected Vodafone's request for the extension of its licences in seven circles. These licences were given for a twenty year period and are set to expire in December 2015. The seven circles includes Maharashtra, Gujarat and UP (East). Vodafone had written to the department seeking an extension of the licences for another 10 years. The other circles are Kerala, Tamil Nadu, Haryana and Rajasthan.

The DoT, however, said that "circumstances have materially changed" since the original licences were granted in 1995 and there is no immediate need for an extension of the licences. "Your request for extension of licences cannot be acceded to," DoT said. "Vodafone may apply for Unified Licence at appropriate time and obtain spectrum through market-related process for continuing the service in the service areas."

This is not the first time that Vodafone has sought extension of its licences in order to maintain continuity of operations and retain spectrum. The company had made a similar plea last year ahead of the spectrum auctions in Delhi, Mumbai and Kolkata in early 2014. However, the government had rejected the demand that had prompted Vodafone and other operators to compete for spectrum acquisition. A legal challenge on the matter is, however, still pending in the courts.

Vodafone holds spectrum in both 900 MHz and 1,800 MHz bands in the seven circles and a fresh auction could result in new and hefty investments by the company, which has just realized its first profit in the country in the previous fiscal. The company had spent Rs 19,600 crore in the February auctions where it bagged 900 MHz and 1,800 MHz spectrum in around a dozen circles.

Rejecting Vodafone's plea, the DoT also made a mention of Supreme Court's February 2012 judgment that said that scarce natural resources like spectrum should be distributed through a non-discriminatory method like auctions as this will result in protection of national/public interest.

DoT also spoke about the National Telecom Policy that had advocated de-linking of spectrum from future licences and recommended its availability at prices determined through market-related processes like auctions.