New Delhi: The Telecom Regulatory Authority of India (Trai) on Thursday recommended cancellation of 34 telecom licences of companies -- issued by the government in 2008 –- due to non-compliance of roll-out obligations.
In a swift action against new telecom players who were given licences in 2008, telecom regulator Trai on Thursday asked the government to cancel 62 licences given to five companies including Etisalat (Swan), Uninor and Videocon.
The recommendation for this strong action was made to the Telecom Ministry today owing to the companies' non-compliance or irregular roll-out of network, as laid down in the contract.
The action comes amid the Comptroller and Auditor General slamming the Telecom Ministry for irregularity and impropriety in giving licences to new players in 2008, causing a loss of a whopping Rs 1.76 lakh crore to the exchequer.
As per the TRAI report, cancellation has been sought for licence in 15 circles given to Etisalat, a company earlier known as Swan that CAG had dubbed as a front company of Anil Ambani group.
Besides, licences to Unitech group's Uninor in eight circles, 10 to Sistema-Shyam, a joint venture between Russia's Sistema and India's Shyam group, 10 to Videocon, which Venugopal Dhoot-led group acquired from Mahendra Nahta's Datacom, and 19 of Loop.
The action also coincides with the Supreme Court hearing into the allocation of 2G spectrum in 2008 at 2001 prices. According the telecom regulator, just a handful have met all licence conditions - which specified how much of the network had to be rolled out each year. By the end of the third year, the entire network has to be rolled out.
Though the government is not bound to accept the Trai recommendations, the move is important in the current context of the CAG report since the government will be under pressure to explain why it has not acted.
The Trai recommendations are not based on whether irregularities have been committed in the licensing (this is what the CAG is concentrating upon), but on the rules of the licences.
Under the law, the Trai's only mandate is to ensure firms meet the various conditions specified in the licence. So if a firm has not rolled out its network (10% in the first year of getting the licence), it has to pay a penalty. Since the DoT has not levied this penalty, Trai is recommending this be done. (with PTI inputs)
Reliance Communications, India's No. 2 mobile operator, said it had no shareholding in unlisted Swan Telecom at the time when the company was granted licence to start operations.
A government audit report has said Swan Telecom, which has since been bought into by the UAE's Etisalat, was given a licence despite a unit of Reliance Communications holding over 10 per cent of equity, a violation of rules.
Reliance Communications said its wholly owned unit was a 9.9 per cent shareholder in Swan till Dec. 5, 2007, while Swan was granted licence on Jan. 10, 2008. The company said it would provide all relevant information to resolve the doubts expressed by the auditor.
The government today said leading telecom operators Bharti Airtel and Vodafone have not fully complied with the requirements of submitting documents needed for verifying their gross revenues by the government auditor CAG.
"Bharti Airtel, Reliance Communications, Vodafone and Tata Teleservices and their group companies have been selected by the CAG of India for the current year. The operators were asked to provide relevant accounting records for three years commencing 2006-07 by DoT," Minister of State for Communications Sachin Pilot said in a written reply to the Rajya Sabha.
Out of these four companies, RCom and TTSL have submitted most of the information, while Vodafone and Bharti Airtel have not fully complied with the requirements, he added. The Department of Telecom has already conducted special audit on the books of operators like RCom, TTSL and Bharti Airtel to ascertain the correctness of gross revenue (GR).
This exercise is only for the verification of correctness of the GR and not the audit of accounts of private telecom companies, he added. "CAG proposes to take up the verification of the correctness of the revenue of all operators in a phased manner," Pilot said.
He added, however, that the issue regarding the powers of the CAG to audit the account books of private telecom firms is sub-judice and any change in the agreement may be considered only after the issue is finally adjudicated upon. Private companies are against the prospect of CAG looking into their books of account.
Shyam-Sistema refutes Trai charge on roll-out obligations
Refuting telecom regulator Trai's charge that it has not met its roll-out obligations, Sistema-Shyam, today said the company has launched services in all 22 circles and has over seven million subscribers.
"Amongst the new telecom operators, Sistema Shyam Teleservices Ltd (SSTL) was the first company to launch its services. The company has complied with all its roll-out obligations in all the 22 telecom circles and has already secured over 7 million voice subscribers and over 3,00,000 data customers," the company said in a statement.
Telecom Regulatory Authority of India (Trai) today said Sistema-Shyam has failed to meet roll-out obligations in 10 circles and has recommended cancellation of its licences in those areas.
A joint venture between India's Shyam group and Russian giant Sistema, Sistema-Shyam is the only new telecom operator which is offering CDMA based services across the nation.
Among the new licensees, no irregularity was found by the government auditor CAG, which has said that 2G spectrum allocation by the government cost the exchequer up to Rs 1.76 lakh crore. CAG report also mentioned a few companies, saying that they were ineligible for telecom licences.
Russian firm Sistema holds nearly 74 per cent equity in the company, and has also roped in the Russian government which holds nearly 19 per cent stake.
Didn't hear from Trai on licences: Telenor India unit
Telenor's India unit said on Thursday it had not received any information from the telecom regulator regarding its licences in the country.
The Telecom Regulatory Authority of India had recommended to the government the cancellation of 69 telecoms licences allocated to companies, citing delay in rolling out services, two TV channels said on Thursday. The NDTV channel said this included eight licences held by the Telenor unit.
"Therefore, we can't comment on this matter," the company said in a statement. "We have 13.7 million customers and are a real operator providing new alternatives for consumers in the Indian mobile market," it added
Source: Indian Express & Agencies