Dual technology licence scam next in Kapil Sibals crosshairs

Written by Rishi Raj | Sunil Jain | New Delhi | Updated: Dec 1 2010, 08:18am hrs
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After announcing showcause notices on defaulting and ineligible telcos who bagged 2G spectrum during A Rajas tenure, telecom minister Kapil Sibal plans to turn his attention to dual-technology. On Monday, Sibal had said that the department of telecommunications plans to send notices to 85 out of the 122 2G licencees.

Sibal will soon start focussing on dual-technology licences issued to Reliance Communications, Tata Teleservices, HFCL Infotel and Shyam Telelink. Of the Rs 1,76,000 crore undervaluation mentioned in the CAG report, Rs 37,154 crore is on account of the dual-technology licences.

Telecom ministry sources said the prime focus will be on the irregularities in the licensing process. Apart from the issue of why the policy was announced without being cleared by the Telecom Commission, the ministry will also probe how Reliance Communications, HFCL and Shyam got licences before the policy was announced.

Reliance Communications informed the Bombay Stock Exchange on October 19, 2007 that it would be getting a dual-technology licence, even though the ministry press release allowing dual technology was issued only later in the day. In-principle approval was given to three operators a day prior to the announcement of the policy, the CAG report has pointed out. Besides, Reliance Communications, Shyam and HFCL had applied for dual-technology licences in 2006, at a time when there was no policy on dual-technology.

Reliance Communications had complied with the requirements for permission to use dual technology on October 19, 2007 itself by making the requisite payment. As a result, the company got the right to 2G spectrum in 20 circles the same day the policy was announced. Tata Teleservices, however, applied for a dual-technology licence after the policy was announced. As a result, while Reliance Communications got spectrum in all the circles, Tata Teleservices did not get spectrum in all the circles it applied for this is what group chairman Ratan Tata refers to when he talks of level playing field issues.

Sources said the telecom minister would also review whether the licence fee of Rs 1,651 crore for a pan-India licence and spectrum charged for a dual technology licence needed to be revised upwards.

As per the dual technology policy, operators providing CDMA services could also provide GSM services and were eligible for GSM spectrum. The major beneficiaries of the policy were Reliance Communications and Tata Teleservices, two leading CDMA service providers.

Based on a recommendation from the Telecom Regulatory Authority of India, DoT on October 17, 2007 decided to allow dual technology.

The decision, however, was taken without referring the matter to the full Telecom Commission, even though it involved allocation of spectrum at 2001 rates. DoT issued a press release in this regard on October 19, 2007.

The process followed by the DoT while introducing access to the dual technology to the existing telecom operators lacked transparency and fairness. Equal opportunity was denied to other similarly placed operators who could apply for use of dual technology, only after the formal announcement of the policy, the CAG report has said.

The CAG has also said that a crucial decision like dual technology should have been made after referring it to the Cabinet.