2G: 119 erring telcos will get showcause notices

Asked about the revenue loss to the exchequer by allotting spectrum at 2001 prices,as pointed out by the CAG,the minister said,”The CAG has stated this. This is something which the ministry will decide and we will apply our mind individually to each case.”

The notices will be issued to 119 licencees of which 81 fall under both categories of ineligibility to get licences and 38 for not meeting roll-out obligations alone as spelt out in the licences,Sibal said.

He,however,declined to name the companies which would be issued showcause notices.

Sources said among the new operators,the companies are Uninor,S Tel,Loop Telecom and Videocon.

The licencees would be given 60 days to respond to show cause notices,Sibal said,adding each case would be dealt with separately.

“After studying their response,a decision will be taken on whether these (licences) need to be cancelled or a penalty should be imposed,” the minister said.

The ministry will start issuing the notices in the next three or four days,senior DoT officials said adding the minister has cleared the file.

The government also said it will ask the Ministry of Corporate Affairs to investigate the CAG allegation that Swan Telecom,which got licences and spectrum in 2008,acted as a front company of Anil Ambani-led RCom.

“We are referring (Swan Telecom) to the Ministry of Corporate Affairs to actually find out and investigate if there are any front companies involved,” Telecom Minister Kapil Sibal told reporters here.

“And if we find,pursuant to that investigation,that there was any wrongdoing,we will take action,” he added.

According to a report by the Comptroller and Auditor General (CAG),Swan Telecom appeared to be acting as a front company for Reliance Telecom,a 100 per cent subsidiary of RCom.

As per the existing rules,no telecom operator is allowed to hold more than 10 per cent stake in another service provider in the same circle,either directly or indirectly.

However,in all 13 circles where Swan bagged licences,Reliance was already present. The CAG has calculated that inclusive of preferential shares equivalent to a 0.9 per cent stake,RCom had a 10.71 per cent participating interest in Swan.

RCom,on the other hand,has maintained that while it held a 9.9 per cent equity stake in Swan through Reliance Telecom till December 5,2007,it had offloaded the shares prior to the award of a telecom licence to Swan on January 10,2008.