The department of telecommunications (DoT) will soon start looking into the issue of ineligibility of recent licensees such as Unitech, Loop and Datacom, in the wake of the Comptroller and Auditor-General's scathing report. And, take action, if it thinks it is required.
"We will soon look into the issue raised in the CAG report of ineligibility of various new players who were issued licenses in 2008. After determining the actual position, we will take action, if warranted," a senior official from DoT told Business Standard.
The department will see the CAG report and undertake its own study internally and arrive at a conclusion, the official said. He wouldn't say how or by when.
CAG, in its report, has revealed that 85 of the 122 licences issued in 2008 did not satisfy the eligibility conditions prescribed by DoT. The allocation of new licences at a price fixed in 2001 also caused a loss of Rs 1.76 lakh crore to the government, the report said.
Tabled in Parliament yesterday, it had identified leading companies such as the Unitech group (Uninor), Loop Telecom (owned by the Essar group) , S-Tel, Swan Telecom, Datacom (now Videocon Telecommunications) and Allianz Infratech, now merged with DB Etisalat as undeserving of Unified Access Service Licences, for not having met the eligibility conditions.
Breaches included false claims of higher paid-up capital and misrepresentation of facts by the companies. CAG also said Swan Telecom was ineligible for issuance of a new license as Reliance Telecom was holding 10.71 per cent in the company at the time of applying.
Under the rules, an existing operator cannot hold more than 10 per cent in a competing telco in the same circle. Reliance Communications has, however, contested this and said the group had no shareholding in Swan at the time of grant or after.
