Sibal promises action against errant telecom firms

Monday, November 29, 2010

NEW DELHI - Communications Minister Kapil Sibal Monday said notices will be served on all firms that suppressed facts to buy licences and airwaves for mobile phone services in the country and had fallen short of their roll-out obligations.

He also assured a thorough probe to see if they had manipulated the self-certification process about their financial strength and their main business — as specified in their memorandum of association — to get licences for telephone services.

“It is time we issued notices to these companies. There are in all 85 such cases,” Sibal said in his first official press conference after he was given the additional charge of communications portfolio, following the resignation of his predecessor A. Raja.

“These are matters of controversies. We are referring the matter to the Ministry of Corporate Affairs to see whether there were any front companies involved. So, we will take action accordingly,” he said.

His reference was also to the award of second generation (2G) spectrum and licences to nine new firms, most of which had no prior experience in the telecom services industry, in January 2008 — a controversial matter that forced DMK’s A. Raja to resign Nov 5.

“On the basis of self-certification, companies may have jumped the queue, they may have got licenses on first-cum-first-served basis. Those who may have come late could have complied with the eligibility conditions, but could not get licences.”

Sibal said if he went beyond the licences issued to these nine companies, there were 119 cases in all since 2006, where roll-out obligations were not met as per the terms and conditions that were agreed upon.

“We will study each case separately. We will, in the next few weeks, issue show-cause notices on why their licences should not be cancelled. Companies will be given 60 days to respond.”

Last week, India’s telecom watchdog had recommended scrapping 69 of the 130 licences given for 2G phone services since December 2006, saying their roll-out of services had failed to comply with the set norms.

Of the 69 licences, 20 had been issued to Loop Telecom, 15 to Etisalat DB, 11 to Sistema-Shyam, 10 to Videocon, 8 to Uninor, and 5 to Aircel.

The licences stipulate coverage of at least 90 percent of the areas in metro centres within one year. In non-metro areas, 10 percent of the towns must be covered in the first year and 50 percent within three years.

Referring to the stand-off between the treasury and the opposition benches over a joint parliamentary probe into the alleged telecom scam, Sibal — a noted lawyer himself — said the government had no problem with discussions in parliament.

“I would love a debate on this in parliament. But my confidence is diminishing as the days go by,” he said, expressing concern that the opposition had stalled parliamentary proceedings for the 12th successive day Monday.

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