DoT drills holes in British Telecoms licence applications

New Delhi, Nov 29 | Updated: Nov 30 2006, 09:37am hrs
The department of telecommunications (DoT) has picked a number of loopholes in the national and international licence applications of BT (British Telecom).

In a letter sent to the company, DoT has asked it to submit the required documents immediately for further processing of its licence application. The move will delay the grant of the licence to the company.

Earlier this month BT had said that it was looking at getting the licences in 8-12 week's time.

In a letter to the company (a copy of which is available with FE), DoT has said that the memorandum of understanding does not contain the compliance clause as required under clause 5.6 (iii) of national long distance (NLD) licence. The clause requires an undertaking stating that the company shall acknowledge compliance with the licence agreement as a part of Memorandum of Association of the company. Any violation of the licence agreement shall automatically lead to the company being unable to carry on its business in this regard. The duty to comply with the licence agreement shall also be made a part of Articles of Association.

BT has also not submitted the shareholder agreement, which is required to be submitted along with the application. DoT has said that the Foreign Investment Promotion Board's (FIPB) approval is not in the name of the applicant company rather it is in the name of its foreign partner BT Global Communications (Mauritius) Ltd, which is holding 74% of its share.

The FIPB approval must be in the name of the applicant company, the DoT letter has stated.

The letter has highlighted that BT in its application has mentioned the nationality of its directors and also of CEO/CTO/CFO as India, which does not clarify whether they are resident Indian citizen or not. It may kindly be clarified whether they are resident Indian citizen or not, the letter has mentioned.

DoT has also pulled up BT for not submitting its network roll out plans, which is required. Earlier this month, BT had announced that it has applied for NLD and ILD licences in India, whereby it will offer services for the first time to multi-site corporate customers in the Indian market through a newly formed joint venture. BT has formed a joint venture with Jubilant Enpro under which BT holds a 74% stake with Jubilant holding the balance 26% as the foreign direct investment (FDI) guidelines require an Indian company to hold majority share.