Watghdog wants 69 teleom licences scrapped for poor roll-out

Thursday, November 18, 2010

NEW DELHI - In a new twist to the controversy that led to the resignation of A. Raja communications minister , India’s telecom watchdog Thursday recommended scrapping of 69 of the 130 licences given for 2G phone services since December 2006.

“The roll-out of services on these licences has failed to comply with the set norms. Six companies had been given these 69 licences,” a senior official of the Telecom Regulatory Authority of India (TRAI) said.

“These companies must also be penalised,” said the official, adding that the licensing terms clearly spell out how much network has to be rolled out in the licensed area each year, and the penalty entailed for failing to do so.

Of the 69 licences, 20 have been issued to Loop Telecom, 15 to Etisalat DB, 11 to Sistema-Shyam, 10 to Videocon, 8 to Uninor, and 5 to Aircel.

According to officials at Sanchar Bhavan, the headquarters of the Department of Telecom (DoT), the recommendations will be examined and, if required, notices could be issued to the companies to show cause why the licences should not be scrapped.

“These are not directions but recommendations. These will be duly examined,” a senior official said, explaining the process involved.

In a letter to Telecom Secretary R. Chandrasekar, TRAI Secretary R.K. Arnold, said the licences stipulate coverage of at least 90 percent of the areas in metro centres within one year.

In non-metro areas, 10 percent of the towns must be covered in the first year and 50 percent within three years.

“The licences issued from 2006 onwards also cover cases of Idea Cellular and Spice Communications. In so far as their compliance of roll-out obligation is concerned, a letter is being addressed separately,” said the letter.

The suggestions come after the most serious indictment on the 2G-spectrum scam in which India’s official auditor said former communications minister A. Raja even ignored Prime Minister Manmohan Singh’s advice and allotted radio frequency to new telecom players at low prices.

The Comptroller and Auditor General of India has estimated the presumptive revenue loss to the exchequer at between Rs.58,000 crore ($12.8 bilion) and Rs.1.76 lakh crore (nearly $40 billion), based on different valuation parameters.

In the 96-page report including annexures tabled in parliament, the auditor sought to spell out what it felt was the potential loss to the exchequer in 2G spectrum allocation in 2007-08 due to policies followed by Raja.

“The entire process of spectrum allocation was undertaken in an arbitrary manner,” said the report, adding that the estimate of loss was based on various parameters — without recourse to any “mathematical or econometric models” — and “presumptive” in nature.

The issue has been simmering for over two years and after refusing to resign, saying he had done no wrong, Raja quit his cabinet post late Sunday, ending an opposition-Congress standoff that, however, continues to paralyse parliament.

Filed under: Economy

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