Ahluwalia defends Swan, Unitech on stake sale after spectrum allocation
By IANSSunday, January 16, 2011
NEW DELHI - Planning Commission Deputy Chairman Montek Singh Ahluwalia has sought to clear the air on the so-called windfall of Swan Telecom and Unitech Wireless upon selling their stakes after securing airwaves dirt cheap for 2G mobile phone services.
Well, let me try to clarify this point. It’s widely been said and, I think, the public is being misled quite a bit into this, Ahluwalia told Karan Thapar’s Devil’s Advocate programme for CNN-IBN channel.
It is absolutely true Swan and Unitech issued new equity to companies that bought into them because they had telecom spectrum but this money didn’t go to promoters, he said, referring to developments during former communications minister A. Raja’s regime.
It (the money) went into new companies and it is meant to be used to roll-out telecom services. They didn’t sell their equities. They expanded the equity of the company and brought in new people. That’s not the same thing.
Ahluwalia was reacting to Thapar’s question and opposition allegation that promoters of Swan and Unitech — now renamed Etisalat and Uninor — had reaped a windfall by selling their stakes after being allotted second generation telecom spectrum very cheap.
The opposition had alleged that Swan Telecom had bought licences for 13 circles with the necessary spectrum for $340 million but the promoters managed to sell a 45-percent stake in the company to UAE’s Etisalat for $900 million.
This swelled the company’s valuation to $2 billion without a single subscriber.
The opposition also alleged that another new player, Unitech, had paid $365 million as licence fee but sold a 60-percent stake to Norway’s Telenor for $1.36 billion, taking its valuation to nearly $2 billion, again without a single subscriber.
Etisalat and Uninor and among 11 companies that have been issued notices by the Supreme Court on a plea seeking cancellation of licences for second generation phone services during Raja’s tenure.
The other companies are S-Tel, Loop Telecom, Videocon, Allianz Infra, Idea Cellular, Tata Teleservices, Sistema Shyam Teleservices, Dishnet Wireless and Vodafone-Essar.
