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December 10, 2010, 5:43 PM EST
By Ketaki Gokhale and Subramaniam Sharma
Dec. 11 (Bloomberg) -- India said the telecommunications regulator has recommended scrapping 38 wireless spectrum permits held by companies including Aircel Ltd., Dishnet Wireless Ltd., Etisalat DB Telecom Pvt. and Unitech Wireless Pvt.
The Telecom Regulatory Authority of India also suggested “legal examination” of 31 licenses given to Aircel, Allianz Infratech (P) Ltd., Etisalat DB, Loop Telecom Ltd., Sistema Shyam Teleservices Ltd. and Videocon Telecommunications Ltd., Sachin Pilot, junior telecommunications minister, said in a statement to Parliament posted on the government’s website.
Prime Minister Manmohan Singh’s government is under fire from opposition parties and the chief auditor for the way airwave permits were awarded in 2008. The sale of 157 licenses, mostly to ineligible bidders at “unbelievably low” prices, may have cost India’s treasury as much as 1.4 trillion rupees ($31 billion) in revenue, according to the auditor.
The regulator’s “stance is that this is a scarce national resource and this is the harshest way of punishing these operators,” said Naveen Kulkarni, an analyst at MF Global Ltd. in Mumbai.
Recommendations from the regulator aren’t binding on the nation’s department of telecommunications, he said. The department has the power to cancel the licenses.
Gurdeep Singh, chief operating officer at Aircel, couldn’t be reached on his mobile phone. Shahid Balwa, vice chairman at Etisalat DB, couldn’t immediately be reached for comment.
No Communication
Unitech Wireless hasn’t received any “formal communication” from the government, Sharad Goswami, spokesman at the company, said in an e-mailed statement. Arif Kumar, spokesman for Loop Telecom, and Vineet Kumar, a general manager at Dishnet Wireless, declined to comment.
The telecommunications ministry awarded 85 of the second- generation licenses to 13 ineligible companies, the Comptroller and Auditor General of India said in a 77-page report on Nov. 16. Singh has said the government will punish anyone who broke laws.
The licenses were sold for a combined 123.9 billion rupees in January 2008, according to the auditor. By comparison, the government raised 677.2 billion rupees selling third-generation licenses to 11 operators this year.
Telenor ASA and Emirates Telecommunications Corp. were among operators that purchased stakes in Indian companies whose license applications should have been rejected in 2008 because they were unqualified, according to the auditor’s report.
Minister’s Resignation
Andimuthu Raja, the telecommunications minister when the licenses were awarded, resigned two days before the auditor’s report was released. India’s Central Bureau of Investigation is probing the sale of airwave licenses and raided 14 locations including two of Raja’s residences on Dec. 8.
Raja’s successor Kapil Sibal said Dec. 9 that the government will send so-called “show-cause” notices to companies holding 85 licenses to prove they’re entitled to keep offering services.
Satyendra Prakash, a spokesman for the telecommunications department, declined to comment on the status of the notices.
--With assistance from Rakteem Katakey in New Delhi, George Smith Alexander and Anoop Agrawal in Mumbai. Editors: Abhay Singh, Josh Fellman
To contact the reporters on this story: Subramaniam Sharma in New Delhi at ssharma@bloomberg.net; Ketaki Gokhale in Mumbai at kgokhale@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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Dec. 11 (Bloomberg) -- India said the telecommunications regulator has recommended scrapping 38 wireless spectrum permits held by companies including Aircel Ltd., Dishnet Wireless Ltd., Etisalat DB Telecom Pvt. and Unitech Wireless Pvt.
The Telecom Regulatory Authority of India also suggested “legal examination” of 31 licenses given to Aircel, Allianz Infratech (P) Ltd., Etisalat DB, Loop Telecom Ltd., Sistema Shyam Teleservices Ltd. and Videocon Telecommunications Ltd., Sachin Pilot, junior telecommunications minister, said in a statement to Parliament posted on the government’s website.
Prime Minister Manmohan Singh’s government is under fire from opposition parties and the chief auditor for the way airwave permits were awarded in 2008. The sale of 157 licenses, mostly to ineligible bidders at “unbelievably low” prices, may have cost India’s treasury as much as 1.4 trillion rupees ($31 billion) in revenue, according to the auditor.
The regulator’s “stance is that this is a scarce national resource and this is the harshest way of punishing these operators,” said Naveen Kulkarni, an analyst at MF Global Ltd. in Mumbai.
Recommendations from the regulator aren’t binding on the nation’s department of telecommunications, he said. The department has the power to cancel the licenses.
Gurdeep Singh, chief operating officer at Aircel, couldn’t be reached on his mobile phone. Shahid Balwa, vice chairman at Etisalat DB, couldn’t immediately be reached for comment.
No Communication
Unitech Wireless hasn’t received any “formal communication” from the government, Sharad Goswami, spokesman at the company, said in an e-mailed statement. Arif Kumar, spokesman for Loop Telecom, and Vineet Kumar, a general manager at Dishnet Wireless, declined to comment.
The telecommunications ministry awarded 85 of the second- generation licenses to 13 ineligible companies, the Comptroller and Auditor General of India said in a 77-page report on Nov. 16. Singh has said the government will punish anyone who broke laws.
The licenses were sold for a combined 123.9 billion rupees in January 2008, according to the auditor. By comparison, the government raised 677.2 billion rupees selling third-generation licenses to 11 operators this year.
Telenor ASA and Emirates Telecommunications Corp. were among operators that purchased stakes in Indian companies whose license applications should have been rejected in 2008 because they were unqualified, according to the auditor’s report.
Minister’s Resignation
Andimuthu Raja, the telecommunications minister when the licenses were awarded, resigned two days before the auditor’s report was released. India’s Central Bureau of Investigation is probing the sale of airwave licenses and raided 14 locations including two of Raja’s residences on Dec. 8.
Raja’s successor Kapil Sibal said Dec. 9 that the government will send so-called “show-cause” notices to companies holding 85 licenses to prove they’re entitled to keep offering services.
Satyendra Prakash, a spokesman for the telecommunications department, declined to comment on the status of the notices.
--With assistance from Rakteem Katakey in New Delhi, George Smith Alexander and Anoop Agrawal in Mumbai. Editors: Abhay Singh, Josh Fellman
To contact the reporters on this story: Subramaniam Sharma in New Delhi at ssharma@bloomberg.net; Ketaki Gokhale in Mumbai at kgokhale@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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