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November 30, 2010, 12:33 AM EST
By Subramaniam Sharma
Nov. 30 (Bloomberg) -- Videocon Industries Ltd. and Unitech Ltd. led shares of Indian phone carriers lower after the government said it’s informing companies that they may have suppressed facts when they won wireless permits in 2008.
Videocon tumbled as much as 7 percent and Unitech, the real estate developer that has a partnership with Telenor ASA, slumped as much as 6.9 percent. Reliance Communications Ltd., India’s second-largest wireless operator, declined for a sixth consecutive day to a record low.
Telecommunications Minister Kapil Sibal said yesterday the owners of 85 licenses have two months to respond. Separately, 119 phone companies that have not met network rollout commitments will be issued notices, he said, without identifying any companies.
“If the slow rollout is the problem, then the government will ask for penalties,” said Jagannadham Thunuguntla, the New Delhi-based chief strategist at SMC Global Securities Ltd. “If eventually the steps lead to cancellation of licenses, then whatever investment went in will go for a toss and reputations will be damaged.”
The government issued the notices after the Comptroller and Auditor General of India said earlier this month that the process followed for issuing licenses two years ago lacked transparency and was arbitrary.
The Indian government missed out on as much as 1.4 trillion rupees ($30 billion) in potential revenue from the auction of the so-called second-generation airwaves, according to the auditor.
Videocon fell to as low as 202.15 rupees while Unitech declined to as much as 57 rupees.
Venugopal Dhoot, Videocon’s chairman, couldn’t be reached for a comment. Unitech said earlier this month it was cooperating with the authorities about the investigation into the sale of airwaves.
--Editors: Anand Krishnamoorthy, Young-Sam Cho.
To contact the reporter on this story: Subramaniam Sharma in New Delhi at ssharma@bloomberg.net
To contact the editors responsible for this story: Neil Denslow at ndenslow@bloomberg.net; Young-Sam Cho at ycho2@bloomberg.net
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Nov. 30 (Bloomberg) -- Videocon Industries Ltd. and Unitech Ltd. led shares of Indian phone carriers lower after the government said it’s informing companies that they may have suppressed facts when they won wireless permits in 2008.
Videocon tumbled as much as 7 percent and Unitech, the real estate developer that has a partnership with Telenor ASA, slumped as much as 6.9 percent. Reliance Communications Ltd., India’s second-largest wireless operator, declined for a sixth consecutive day to a record low.
Telecommunications Minister Kapil Sibal said yesterday the owners of 85 licenses have two months to respond. Separately, 119 phone companies that have not met network rollout commitments will be issued notices, he said, without identifying any companies.
“If the slow rollout is the problem, then the government will ask for penalties,” said Jagannadham Thunuguntla, the New Delhi-based chief strategist at SMC Global Securities Ltd. “If eventually the steps lead to cancellation of licenses, then whatever investment went in will go for a toss and reputations will be damaged.”
The government issued the notices after the Comptroller and Auditor General of India said earlier this month that the process followed for issuing licenses two years ago lacked transparency and was arbitrary.
The Indian government missed out on as much as 1.4 trillion rupees ($30 billion) in potential revenue from the auction of the so-called second-generation airwaves, according to the auditor.
Videocon fell to as low as 202.15 rupees while Unitech declined to as much as 57 rupees.
Venugopal Dhoot, Videocon’s chairman, couldn’t be reached for a comment. Unitech said earlier this month it was cooperating with the authorities about the investigation into the sale of airwaves.
--Editors: Anand Krishnamoorthy, Young-Sam Cho.
To contact the reporter on this story: Subramaniam Sharma in New Delhi at ssharma@bloomberg.net
To contact the editors responsible for this story: Neil Denslow at ndenslow@bloomberg.net; Young-Sam Cho at ycho2@bloomberg.net
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