The Claimants assert that "the only remaining issue in this case is the amount of compensation that the Claimants are entitled to receive from the Respondent arising out of the Respondent's multiple treaty violations, as set out in the Tribunal's July 25, 2016, Award."¹

The Claimants contend that the determination of compensation due is governed by the principles put forward by the Permanent Court of International Justice in the Chorzów Factory case, and that compensation should restore them to the situation which would have existed if the unlawful acts had not been committed.²

The Respondent disagrees with the relevance for the present case of the test set out in the Chorzów Factory judgment, as it considers that the Tribunal held that the Claimants are entitled to compensation under Article 6 of the Treaty, not on the basis of any other theory or measure.¹⁴

By Notice of Arbitration dated July 3, 2012, the Claimants commenced arbitration proceedings against the Respondent pursuant to Article 3 of the Arbitration Rules of the United Nations Commission on International Trade Law (1976) (the "UNCITRAL Rules") and Article 8 of the September 4, 1998, Agreement Between the Government of the Republic of Mauritius and the Government of the Republic of India for the Promotion and Protection of Investments, which entered into force on June 20, 2000 (the "Mauritius-India Treaty" or the "Treaty").

On July 25, 2016, the Tribunal issued the Award on Jurisdiction and Merits (the "Award on Jurisdiction and Merits" or "Partial Award"), the dispositive part of which provides:

501. For the reasons set out above, the Tribunal decides and awards as follows:

(a) Unanimously, that the Claimants' claims relate to an "investment" protected under the Treaty;

(b) Unanimously, that the notice of termination of the Devas Agreement sent by Antrix to Devas constituted an act of State attributable to the Respondent.

(c) By majority, that the Tribunal lacks jurisdiction over the Claimants' claims insofar as the Respondent's decision to annul the Devas Agreement was in part directed to the protection of the Respondent's essential security interests;

(d) By majority, that the Respondent has expropriated the Claimants' investment insofar as the Respondent's decision to annul the Devas Agreement was in part motivated by considerations other than the protection of the Respondent's essential security interests;

(e) By majority, that the protection of essential security interests accounts for 60% of the Respondent's decision to annul the Devas Agreement, and that the compensation owed by the Respondent to the Claimants for the expropriation of their investment shall therefore be limited to 40% of the value of that investment;

(f) Unanimously, that the Respondent has breached its obligation to accord fair and equitable treatment to the Claimants between July 2, 2010 and February 17, 2011.

(g) Unanimously, that the Claimants' other claims shall be dismissed;

(h) Unanimously, that any decision regarding the quantification of compensation or damages, as well as any decision regarding the allocationof the costs of arbitration, shall be reserved for a later stage of the proceedings.²¹

On March 23, 2018, the Claimants informed the Tribunal that the Parties had agreed on a submission date of April 26, 2018 at 10 p.m. United States Eastern Daylight Time. The Claimants also expressed their understanding as to the content of such submissions, and noted that they intended to seek permission from the Tribunal to submit a copy of the Deutsche Telekom AG v. India interim award on jurisdiction and merits (the "DT Award") into the evidentiary record and to make written observations on its relevance to this proceeding as part of their April 26, 2018 submission.

On May 2, 2018, the Respondent submitted a Reply to Claimants' Observations on the Impact of the DT Award in this Arbitration.

On May 25, 2018, the Tribunal issued Procedural Order No. 12 Concerning Quantum Evidence Tendered in Proceedings Instituted by Deutsche Telekom. Pursuant to this Procedural Order, the Respondent "[wa]s requested, in accordance with Article 23(4) of the UNCITRAL Rules, to produce the DT quantum papers, including but not limited to witness statements by DT's (former) Head of Corporate Finance and Vice President in Mergers and Acquisitions, to the Claimants and the Tribunal by 1 June 2018. (…) The Claimants [we]re invited to provide any preliminary comments on the DT quantum papers that they may have by 15 June 2018, without prejudice to the right of both sides to address the matter further at the Hearing." Moreover, the Tribunal considered "that it would assist the Tribunal's task if DT's (former) Head of Corporate Finance and Vice President in Mergers and Acquisitions, who seems to have submitted a statement in the DT Arbitration, were willing to testify before the present Tribunal as witness. The Tribunal accordingly invite[d] him to appear as witness at the forthcoming hearing on quantum (…)."

For the Claimants:

Counsel and Advisors

Mr. John L. Gardiner
Mr. Timothy G. Nelson
Ms. Betsy A. Hellmann
Ms. Sharmistha Chakrabarti
Mr. Gunjan Sharma
Ms. Jennifer Huang
Mr. Aaron Shorr
Ms. Emma Keldsen
Ms. Amanda Esteves
Ms. Paulina Pavese
Skadden, Arps, Slate, Meagher & Flom LLP

Mr. Harish Salve
Mr. Ciccu Mukhopadhaya
Mr. Syed Omar Balil Ahmad

Indian Counsel

Witnesses and Client Representatives

Mr. Coleman Bazelon
Mr. Benjamin Sacks
Mr. Lucrezio Figurelli
Mr. Florin Dorobantu
Mr. Ramachandran Viswanathan
Mr. Kim Larsen
Mr. Gary Parsons
Mr. Arun Gupta
Mr. Serge Martin

For the Respondent:

Counsel and Advisors

Mr. George Kahale, III
Mr. Benard Preziosi
Mr. Fernando Tupa
Mr. Fuad Zarbiyev
Mr. Simon Batifort
Ms. Gloria Diaz-Bujan
Mr. Christopher Grech
Curtis, Mallet-Prevost, Colt & Mosle LLP

Mr. Suresh Chandra
Secretary to Government of India, Ministry of Law and Justice, Government of India

Mr. P.S. Narasimha
Additional Solicitor General of India, Government of India

Mr. K.M. Arya
Additional Legal Advisor, Ministry of Law and Justice, Government of India

Mr. K. Parameshawar
Advocate, Junior to Additional Solicitor General of India

Mr. Anoop Srivatsava
Joint Secretary and Financial Advisor, Department of Space, Government of India

Mr. Praveen Karanth
Director, Department of Space, Government of India

Mr. M.S. Krishnan
Officer on Special Duty, Department of Space, Government of India

H.E. Mr. Venu Rajamony Ambassador of India to the Kingdom of the Netherlands

Dr. Kajal Bhat
Counsellor (Legal), Embassy of India, the Netherlands
Witnesses and Experts

Mr. A. Vijay Anand
Mr. K. Sethuraman
Mr. K.S. Parikh
Mr. Nitin Jain
Smt. M. Revathi
Mr. M. Bhagirath
Mr. Jacob Sharony
Mr. Daniel Flores
Mr. Ettore Comi
Mr. Ivan Vazquez
Ms. Eleanor Coates

Arbitral Tribunal

Hon. Marc Lalonde, P.C., O.C., Q.C. (Presiding Arbitrator)
Mr. David R. Haigh, Q.C.
Hon. Shri Justice Anil Dev Singh

Expert Advisor to the Tribunal

Prof. Alix Mandron

Registry

Mr. Dirk Pulkowski
Ms. Elena Laura Álvarez Ortega
Permanent Court of Arbitration

On March 7, 2019, the Respondent submitted into the record the Bilcon et al v. Canada (Ex. R-237) award and the South American Silver v. Bolivia award (Ex. R-238), indicating the paragraphs to which it called the Tribunal's attention.

On March 12, 2019, the Claimants indicated the paragraphs of the Bilcon et al v. Canada and the South American Silver v. Bolivia awards to which the Claimants drew the Tribunal's attention.

126. Each Claimant is separately and independently entitled to an award of compensation for the violation of its rights under the Mauritius-India BIT.

127. The First Claimant, CC/Devas, seeks:

(a) an award of damages in the amount of USD 283 million ;

(b) pre- and post-award interest on that sum, compounded, at LIBOR +4% ;

(c) an order that such sums be payable net of taxes, charges, or other set-offs (i.e. Respondent may not withhold or offset payment of any portion of the award based on a claim that it is subject to taxation or other deductions);

(d) an order that Respondent is to indemnify it with respect to any Indian taxes, charges, or other set-offs imposed on the compensation awarded;

(e) an award of its fees and costs in this proceeding; and

(f) such other relief as the Tribunal may deem just and proper.

128. The Second Claimant, DEMPL, seeks:

(a) an award of damages in the amount of USD 58 million ;

(b) pre- and post-award interest on that sum, compounded, at LIBOR +4% ;

(c) an order that such sums be payable net of taxes, charges, or other set-offs (i.e. Respondent may not withhold or offset payment of any portion of the award based on a claim that it is subject to taxation or other deductions);

(d) an order that Respondent is to indemnify it with respect to any Indian taxes, charges, or other set-offs imposed on the compensation awarded;

(e) an award of its fees and costs in this proceeding; and

(f) such other relief as the Tribunal may deem just and proper.

129. The Third Claimant, Telcom Devas, seeks:

(a) an award of damages in the amount of USD 283 million ;

(b) pre- and post-award interest on that sum, compounded, at LIBOR +4% ;

(c) an order that such sums be payable net of taxes, charges, or other set-offs (i.e. Respondent may not withhold or offset payment of any portion of the award based on a claim that it is subject to taxation or other deductions);

(d) an order that Respondent is to indemnify it with respect to any Indian taxes, charges, or other set-offs imposed on the compensation awarded;

(e) an award of its fees and costs in this proceeding; and

(f) such other relief as the Tribunal may deem just and proper.²⁷

199. Each Claimant is separately and independently entitled to an award of compensation for the violation of its rights under the Mauritius-India BIT.

200. The First Claimant, CC/Devas, seeks:

(a) an award of damages in the amount of USD 263 million, reflecting its losses as of February 17, 2011;

(b) pre- and post-award interest on that sum from February 17, 2011 onwards, compounded annually, at the one-year LIBOR rate +4% ;

(c) an order that such sums be payable net of taxes, charges, or other set-offs (i.e. Respondent may not withhold or offset payment of any portion of the award based on a claim that it is subject to taxation or other deductions);

(d) an order that Respondent is to indemnify it with respect to any Indian taxes, charges, or other set-offs imposed on the compensation awarded;

(e) an award of its fees and costs in this proceeding; and

(f) such other relief as the Tribunal may deem just and proper.

201. The Second Claimant, DEMPL (sic.),²⁸ seeks:

(a) an award of damages in the amount of USD 263 million, reflecting its losses as of February 17, 2011;

(b) pre- and post-award interest on that sum, compounded annually, at the one-year LIBOR rate +4% ;

(c) an order that such sums be payable net of taxes, charges, or other set-offs (i.e. Respondent may not withhold or offset payment of any portion of the award based on a claim that it is subject to taxation or other deductions);

(d) an order that Respondent is to indemnify it with respect to any Indian taxes, charges, or other set-offs imposed on the compensation awarded;

(e) an award of its fees and costs in this proceeding; and

(f) such other relief as the Tribunal may deem just and proper.

202. The Third Claimant, Telcom Devas (sic.),²⁹ seeks:

(a) an award of damages in the amount of USD 54 million, reflecting its losses as of February 17, 2011;

(b) pre- and post-award interest on that sum, compounded annually, at the one-year LIBOR rate +4% ;

(c) an order that such sums be payable net of taxes, charges, or other set-offs (i.e. Respondent may not withhold or offset payment of any portion of the award based on a claim that it is subject to taxation or other deductions);

(d) an order that Respondent is to indemnify it with respect to any Indian taxes, charges, or other set-offs imposed on the compensation awarded;

(e) an award of its fees and costs in this proceeding; and

(f) such other relief as the Tribunal may deem just and proper.

203. In the alternative, in the event the Tribunal determines that Devas would not have received a terrestrial re-use license to offer BWA services, or would only have received such a license at an uneconomic price, each Claimant is separately and independently entitled to its damages for the loss of an AV-only business. In that event:

(a) The First Claimant seeks an award of damages in the amount of USD 74 million, reflecting its losses as of February 17, 2011, with pre- and post-award interest, and subject to the other conditions set forth in paragraph 200(b)-(f) above;

(b) The Second Claimant (sic.)³⁰ seeks an award of damages in the amount of USD 74 million, reflecting its losses as of February 17, 2011, with pre- and post-award interest, and subject to the other conditions set forth in paragraph 201(b)-(f) above; and

(c) The Third Claimant (sic.)³¹ seeks an award of damages in the amount of USD 15 million, reflecting its losses as of February 17, 2011, with pre- and post-award interest, and subject to the other conditions set forth in paragraph 202(b)-(f) above.³²

For the reasons set forth above, the Tribunal should conclude that the Devas business had no value as of the Valuation Date and award no damages to Claimants. In addition, the costs of this case should be assessed against Claimants.³³

monetary compensation must be sufficient to restore Claimants to the position they would have enjoyed had Respondent not engaged in an unlawful expropriation of their investments in February 2011, not violated its FET obligations with respect to Claimants' investments during 2010/2011, and instead conducted itself with good faith towards Claimants and Devas Multimedia Private Limited ("Devas"), and "fully respected" the contract between Devas and Antrix Corporation Limited ("Devas Agreement"), albeit with a reduced spectrum allocation of just 40% of the originally envisioned 63 MHz of S-band spectrum that had been allocated for Devas's use.³⁷ [footnotes omitted]

The Claimants accepted at the Hearing on Quantum that "those principles would apply under the standard set forth in Article 6(1) of the Mauritius Treaty."⁴⁵ Nevertheless, they reiterated their position and argued that "even if there's no practical distinction in this case between the treaty result (…) and the result under Chorzow factory, under customary International law,"⁴⁶ the treaty standard sets a baseline below which compensation should not fall, and not an upper limit.⁴⁷

the price, expressed in terms of cash equivalents, at which property would change hands between a hypothetical willing and able buyer and a hypothetical willing and able seller, acting at arm's length in an open and unrestricted market, when neither is under compulsion to buy or sell and when both have reasonable knowledge of the relevant facts.⁴⁸

balance of probabilities (…) scientific certainty is not required and it is widely acknowledged by investment treaty tribunals and publicists that the assessment of damages is often a difficult exercise and will usually involve some degree of estimation and the weighing of competing (but equally legitimate) facts, valuation methods and opinions (…).⁵¹

The Respondent denies the applicability of the Chorzów Factory standard of compensation to this case as it considers that the Tribunal held in the Award on Jurisdiction and Merits that the only applicable standard to calculate compensation is Article 6 of the Treaty.⁵³

at no point does the Treaty, being a lex specialis, distinguish between lawful and unlawful expropriation (…) Once the violation of the Treaty provisions regarding expropriation is established, the State has breached the Treaty. Neither is the Tribunal convinced that the generally accepted fair market value standard was intended to apply only in cases of the so-called "lawful expropriation" (…).⁵⁵

The BIT makes no distinction between the compensation to be provided in respect of an unlawful expropriation as opposed to a lawful one, and the Tribunal does not find any reason to believe that the illegality of the expropriation renders what the BIT deems to be "just and effective compensation" suddenly inadequate.⁵⁶

Moreover, the Respondent claims that the Tribunal expressly held in the Award on Jurisdiction and Merits that the Claimants are entitled to "compensation under Article 6 of the Treaty,"⁵⁷ which provides that compensation for expropriation "shall amount to the market value of the investment expropriated." Accordingly, "Claimants are only entitled to claim compensation for the 'market value of the investment' as of the valuation date, February 2011, not the Chorzów Factory standard, as Claimants wrongly allege."⁵⁸ [emphasis in original]

This approach is found specifically in Article 6(1) of the Treaty in relation to valuing property that has been expropriated. It says, in part, "[s]uch compensation shall amount to the market value of the investment expropriated immediately before the expropriation or before the impending expropriation became public knowledge." The Tribunal recognizes this provision embodies what is practically a universal principle to be applied in expropriation cases: the expropriating authority cannot take advantage of its own conduct where it may have negatively influenced or adversely affected the value of what was to be taken ahead of the valuation date.

The Respondent says that Article 6 provides only that compensation for expropriation "shall amount to the market value of the investment expropriated" which may be something less than the fair market value that might be potentially claimed under the Chorzów Factory standard.⁷⁴ Moreover, the Respondent says that the Tribunal did not make an express finding of unlawful conduct in the Partial Award and that such a finding would have been necessary in order to apply the Chorzów Factory standard.⁷⁵ Despite these submissions, the Respondent concedes, however, that the discussion about the compensation standard is purely academic in this case since even under the Chorzów Factory standard, the result would be the same.⁷⁶ Contrary, it says, to the Claimants' arguments, the Chorzów Factory standard does not allow the Claimants to ignore any fact that negatively affects value. "Rather, it requires all factors, negative as well as positive that 'in all probability' would have been present must be taken into consideration."⁷⁷ Several authorities are cited in support. Among others, India refers to CDSE v. Costa Rica,⁷⁸Phillips Petroleum v. Iran,⁷⁹ and Yukos v. Russia.⁸⁰

In response, the Claimants pointed to findings in the Partial Award in relation to breaches of Articles 4(2) and 6 of the Treaty (governing fair and equitable treatment ("FET") and expropriation, respectively), contending that these findings amounted to a finding of unlawful expropriation (as well as bad faith conduct in breach of the FET standard).⁸¹ The Claimants also argue that India has not disputed that, in principle, the relevant business asset should be valued based on its "highest and best use."⁸²

The Tribunal will, therefore, review the issues raised in this quantum phase of the arbitration with the objective of finding an amount that will, "as far as possible, wipe out all the consequences of the illegal act and re-establish the situation which would, in all probability, have existed if that act had not been committed."⁸⁴

(a) reconfigured one of the two Satellites (and not used the other), and (b) worked with new technology for its ground network to maximally use the 25.2 MHz of spectrum available (…) with these technology changes, having 25.2 MHz of spectrum would not have materially affected Devas's ability to deliver BWA and AV services in the urban areas in India (…) from where the vast bulk of its revenues were to be generated.⁸⁹ [footnotes omitted]

Mr. Parikh's assumptions about bandwidth and channels, and guard bands also would result in large amounts of empty, unused spectrum and would clearly hamper India's use of the S-band for military needs. These arguments are manifestly implausible, and therefore cannot be accepted for valuation purposes.¹⁰²

In all events, even had there been some delay in launching a satellite that would allow Devas to start offering services, this would not have affected the basic viability of the business because, as Claimants have shown, they would fully have met that challenge in a manner that preserved its business, e.g. by accelerating the roll-out of its services to make up for any delay, to ensure that its rollout was not impaired.¹¹⁴

[N]one of the last three satellites that India claims were for military use have in-orbit operational back-ups nor has India launched two complementary satellites in order to "diversify" its risk of in-orbit failure. Indeed, in the two years since GSAT-6 was launched, and despite its claims of an alleged "grave risk" in not having a second satellite in orbit, India has not launched GSAT-6A, as a back-up or otherwise.¹²³ [footnotes omitted]

the Government's reconfiguration of the satellites for dual military/commercial usage, the Government's assessment of the causes for the GSLV launch failures, its development of solutions and the testing of the modified launch equipment, and the Government's need to develop ground systems (including handheld devices) that were compatible with the S-band satellite signals.¹²⁹

[O]nce it had been determined to use a satellite with India's state-or-the-art unfurlable antenna for the Government's essential security interests, an identical satellite would not have been permitted to have been launched with a foreign launch vehicle.¹⁴³

Devas could not reasonably expect to offset the costs associated with increasing download speeds with an increase in the price of the services, as the large Indian companies that are offering BWA services are actually charging prices that are lower than prices that Claimants' experts are projecting for Devas[…]¹⁵⁹

are actually 69% higher than the prices Devas had in its own model. If one were to use the 30 to 1 oversubscription ratio together with the prices in the Devas model and leave all of Claimants' other untenable assumptions intact, the Devas business would have a net present value of negative US$104.5 million.¹⁶⁸ [footnotes omitted]

Devas had finalized a draft WPC application for its AV/BWA business with the input of high-level Antrix/ISRO representatives and was prepared to submit the application as soon as it received a firm launch date from ISRO, a prerequisite for submission.¹⁷⁵

From the outset, DOS/ISRO, therefore, at all times knew that, at the appropriate time, they would be contractually obligated to support an application by Devas for frequency authorization to operate the terrestrial component (…) It further follows that DOS was not aware of any actual prohibition on the use of the terrestrial component of the system in S-band spectrum (…) (otherwise, DOS would have had no reason to embark on this venture in the first place).¹⁸⁸

given that the primary motivation of DOT appears to have been to aid Dr. Radhakrishnan in his effort to annul the Devas Agreement (a process that was deemed unlawful by this Tribunal), these letters should be excluded from any consideration of the value of the spectrum that was lost as a consequence.¹⁹⁴

the licenses to be granted to potential satellite radio service providers should allow for the evolution of services from the initial simple, audio/data broadcasting to include video, internet applications and other advanced services. Such a licensing regime will encourage free growth of new applications and services which could be exploited due to the technological developments in the field of broadcasting and telecommunication. This licensing approach will also lead to flexible and efficient utilization of resources including scarce radio frequency spectrum.²⁰²

the terrestrial component of the satellite AV services already had been considered and approved by TRAI as part of its regular process and recommendations, the WPC could not legitimately have declined an application by Devas to provide AV services using CGC, particularly since Devas was always willing to pay the fees set out in the 2005 TRAI Recommendations.²⁰³

DT (…) actually undertook due diligence with regard to the spectrum issues. DT invested in Devas knowing that there was uncertainty as to whether the required licenses to roll out the Devas services would be granted.²¹²

DT approached WPC as part of its due diligence in order to get comfort on the licensing issue, and the WPC did not provide the desired comfort; and that DT then requested Devas to obtain comfort from the WPC in writing, but Devas never obtained that comfort and did not even want to approach the authorities at that stage.²¹³

It was obviously the strategy of Devas and its shareholders to wait to make an application for an operating license for Devas' hybrid system until the satellite was launched (…) hoping that with the launch the Government would change its policy regarding the use to which the S-band spectrum could be put and ignore its level playing field policy.²¹⁶

the hybrid satellite/terrestrial multimedia services that Devas intended to provide would not have been permitted without review by the Apex Committee and, ultimately, a favourable recommendation by the TRAI, after its review in a transparent public process.²²³

pre-dated its recommendations in 2007 and 2008 relating to auction (…) The 2005 recommendations, relating to a different service, were issued prior to the time that the value of spectrum was fully appreciated and would have had no effect on the amount that would have been imposed in 2011 for the use of the spectrum in S-band, which had not been designated for terrestrial use and which would have been subject to a separate TRAI consultative process.²³⁰

[T]echnological developments in telecommunications are taking place at an abnormal pace. Various policy decisions taken at one point of time may, therefore, require a relook (…) circumstances may even mandate change of existing policy altogether.²³¹

the exclusive privilege to establish, maintain and work the telegraphs (…) and has the right to grant licenses to others "on such conditions and in consideration of such payments as it thinks fit."²³³

does not identify with any specificity, which 2007 recommendations or 2008 recommendations somehow superseded the 2005 TRAI Recommendations (…) no "hypothetical buyer" would somehow intuit, as India suggests, that the 2005 TRAI Recommendations silently had been overridden.²³⁵

[T]he issuance of licenses is different from the granting of spectrum, and that the (…) fee paid for Infotel for authorization to provide new services was not inadequate as Infotel had already been allocated spectrum and was not looking for more spectrum in order to provide these additional services.²⁴⁶

If anything, Devas (like Infotel) required an additional authorization from the WPC to re-use its allocated satellite spectrum terrestrially to provide additional services, in its case BWA services. Just as Infotel received permission to provide mobile voice telephony services by the payment of an incremental license fee, Devas equally should have received permission for terrestrial re-use to provide BWA services (…) To suggest that Devas would have been required to pay auction-level prices for this additional WPC authorization to use its already-allocated spectrum is unsupportable.²⁴⁷

the Indian government was at liberty (through the WPC) to levy a fee that effectively prohibited Devas from operating a business (…) surely would have given rise to further BIT violations, either on the basis that the purported "fee" amounted to a confiscatory measure in violation of Article 6, or that it constituted a breach of the FET or MFN provisions in Article 4.²⁵¹

The upfront spectrum charge for the use of 25.2 MHz of S-band spectrum based on the price obtained in the June 2010 auction of BWA spectrum in the 2300-2400 GHz band would be US$ 3,428 billion.²⁶⁹

does not withstand objective scrutiny because it fails to take into account: (a) the significant policy differences between the re-use of satellite spectrum and the auctioning of terrestrial spectrum; (b) the fact that, far from being a new entrant, Devas was the S-band spectrum incumbent (…) by virtue of the "box-out" position held by Devas, there was no terrestrial competitor capable of bidding for spectrum (thus making the auction paradigm irrelevant).²⁷⁶

India's claim that the WPC would have rejected an application by Devas to use CGC as part of its AV-only business is disingenuous – particularly given that its witnesses elsewhere acknowledge that TRAIs pronouncements play a significant role in the telecommunications arena in India.²⁷⁸

With the full 70 MHz of spectrum available, Devas's planned AV services would be delivered nationally via satellite broadcast, and supported by a network of terrestrial towers in urban areas while Devas's planned BWA services would be offered in urban areas over a terrestrial BWA network using the same satellite spectrum that had been allocated to Devas under the Devas Agreement.²⁹¹

4G networks, like Devas's planned BWA network, are capable of providing high throughput and download speeds in ways 2G and 3G networks cannot, so this smartphone-related demand radically increased the demand for, and value of, 4G (i.e. BWA) spectrum (…) So as of at least early 2011 there was a strong expectation of high and growing demand for 4G services in the coming years with a single private nationwide competitor for Devas (…) By 2010 the view that, eventually, every cellphone user would have a smartphone and demand lots of bandwidth had moved from a potential future to reality (…) In India, the number of mobile subscribers grew from 99 million voice subscribers by year end 2007 to 584 million by year end 2010.²⁹³ [footnotes omitted]

Devas would broadcast the AV content using ten downlink transponders and five spot beams on two satellites in the downlink frequency bands, and have user communication to the satellites through the MSS spectrum (…) Devas's AV services would consist of basic (free-to-air) channels and premium packages as well as pay-per view services (…) Devas's original plan was to use 20 MHz of spectrum to offer the AV broadcast service and use an additional 10 MHz as a "guard band." This would allow it to utilize 20 MHz of the remaining BSS spectrum for its BWA service (with an additional 10 MHz available) (…) Devas planned to offer BWA services via a terrestrial network to fixed and mobile devices in cities with populations greater than 200,000 people. As of 2009, Devas planned to offer differentiated retail and enterprise plans (…) By at least 2010, Devas had determined it would roll out its network using LTE from the outset.²⁹⁷ [footnotes omitted]

instructed to assume that the first satellite would have been launched on July 1, 2010 and that the second satellite would have been launched six months later on January 2011. The lease term under the Devas Agreement would, accordingly, start on July 1, 2010. Roll-out of the AV terrestrial network would start in October 2010 in Devas Group 1 (Bangalore) (…) Devas would not have had to reconfigure the satellite to accommodate the reduced spectrum and therefore would not have delayed the launch date by one year, as assumed in the Reduced Spectrum Case.³⁰³ [footnotes omitted]

Devas would have had available 30 MHz for its BWA network. Under the high Terrestrial Re-Use Fee I was instructed to apply, I assume that Devas would use only 20 MHz of spectrum for BWA services and leave the additional 10 MHz available as an option for future capacity expansion. This is a conservative assumption because, as I noted, Devas and the WPC would be rationally expected to reach an agreement on a reasonable fee that would allow such spectrum to be put to its highest and best use.³¹⁰

[S]ince in the Original Spectrum Case the terrestrial AV retransmissions do not use the BWA network, the fee applied to the BWA spectrum in the Reduced Spectrum Case would not be appropriate in the Original Spectrum Case. Instead, recognizing that the TRAI recommended a fee for AV repeaters of 4% of AGR and that I already model Devas paying 6% of AGR, I did not include any fee for the AV portion of the terrestrial network.³¹⁴

an inappropriate terrestrial spectrum fee, roof rental costs, tower height, and the premature rollout of AV services. In addition, Devas' AV-only business would still face a number of issues, including uncertainty over obtaining authorization for a terrestrial repeater network, competition from other TV providers, and a lack of marketability.³²⁷

(a) Devas' subscriber base projection, which was updated to reflect India's population growth projections on the basis of a 2011 census;

(b) Devas' decision to roll out its network using LTE instead of WiMax by at least mid-2010;

(c) higher cell capacity and reduced network costs as a result of the implementation of a cell site configuration made possible by the use of LTE technology;

(d) lower costs of LTE radio equipment than assumed in the Darwin Model;

(e) doubling the speed initially available under the retail BWA plans that Devas expected to offer to customers (while maintaining the price), given the speed of BWA services offered by competitors as of 2011;

(f) higher costs for Devas of acquiring content for AV services.³³⁷

Starting in mid-2008 the iPhone, and similar easy-to-use flat-screen mobile devices, known as smartphones, rapidly and substantially increased the demand for high download speeds and high throughput capacity on wireless networks. For example, in 2009, AT&T's U.S. network (then the exclusive network for iPhones in the United States) experienced severe service problems due to a "tsunami" of demand for bandwidth that "no one was prepared for"³⁴⁴ due to the iPhone. 4G networks, like Devas's planned BWA network, are capable of providing high throughput and download speeds in ways 2G and 3G networks cannot, so this smartphone-related demand radically increased the demand for, and value of, 4G (i.e., BWA) spectrum.³⁴⁵