The department of telecommunications (DoT) has instituted a kind of internal enquiry by seeking details from its sectional officials as well as Bharat Sanchar Nigam Ltd (BSNL) to probe into allegations that a new licensee, Swan Telecom Ltd, was illegally granted licence, spectrum and later intra-circle roaming pacts with BSNL.
The DoT moves comes after the Prime Minister?s Office (PMO) recently asked it to probe the allegations regarding the irregularities after receiving a letter from Dharampal Sabharwal, a Rajya Sabha member of Parliament.
Swan Telecom, which has been granted licences for 13 circles has been in the news recently for offloading 45% stake to the UAE-based telecom major, Etisalat for $900 million, thereby valuing the company at around $2 billion. Since Swan acquired the licence by paying Rs 1,537 crore, at price discovered in 2001, communications and IT minister A Raja has been under fire for causing losses to the exchequer, which subsequently the minister has denied.
Mauritius-based Delphi Investments Ltd holds 9.9% stake in Swan. This share was earlier held by Anil Ambani-led Reliance Communications Ltd (Rcomm). Around 90.1% stake in Swan Telecom is owned by Tiger Trustees Pvt Ltd, which in turn is 99.8% owned by Dynamix Balwas Ltd, which is a Mumbai-based real estate firm.
The Rajya Sabha MP, in his letter had alleged that some key officials were transferred from the DoT?s wireless planning and coordination (WPC) wing when they refused to grant spectrum to Swan. Subsequent to their transfer, the company was allocated spectrum. The WPC wing is responsible for spectrum management.
Further, the MP had alleged that BSNL had entered into roaming pacts with Swan when it does not have similar pacts with any other private operator. The intra-circle roaming pact is a provision which was also provided for by DoT once the new licensees like Swan were granted licence and spectrum. The move basically enables new licensees to switch over to the established players? network in a circle until they established their own infrastructure.
Though BSNL officials deny any wrongdoing, intra-circle roaming so far hasn?t found many takers amongst the incumbent private service providers who view it as a threat since it would help establish new competition within the circles.
In fact, when the intra-circle roaming provision was announced by the DoT, the Telecom Regulatory Authority of India (Trai), chairman Nripendra Misra had written to the latter stating, ?In case of intra-service area (within a state) roaming, if the new service providers start their services without any/limited infrastructure, then the network in which its subscribers will roam, will show an artificial and temporary upswing. This will create a situation where the spectrum with the new service providers will be lying unused while spectrum of the service provider whose network has been used for roaming facility will be heavily used. This may affect the quality of service and may also require a re-look at the present spectrum allocation methodology?.
When FE had drawn Raja?s attention to the Trai?s concern, he had replied that DoT had just made the enabling provision. Any company would take the decision to enter into such pacts purely on availability of spectrum and its network.
Industry analysts view the intra-circle roaming as a move that would indirectly allow spectrum trading in the country. This is because intra-circle roaming allows, operators to put up an exchange, and enter into pacts with existing operators and start operations without having laid out the network in the entire circle.
It has been alleged that such measures helped a company like Swan get a high valuation valuations without either any network in place, subscribers or knowledge of telecom business.
