India is divided into 22 telecoms zones and there are a total 281 zonal licences in the market of 894 million users and 15 mobile operators, led by Bharti Airtel, Reliance Communications and Vodafone’s India unit.
Police say that in 2008, when India issued 122 new telecoms licenses, several rules were violated and bribes were paid to favour certain firms.
Several licenses were issued to firms with no prior experience in the telecoms sector or were ineligible or had suppressed relevant facts, a state auditor said in its report.
The violations cost the exchequer as much as US$36 billion (RM108.72 billion) in lost revenue, the auditor said, equivalent to India’s defence budget.
Andimuthu Raja, the then telecoms minister and a member of a party in the coalition government, has been charged with flouting telecoms rules and accepting bribes to favour some firms, and is in jail.
Following are the companies affected by today’s ruling and the number of zonal licences issued to them in 2008.
Unitech wireless — 22 licenses
Group companies of Indian realty firm Unitech Ltd that were given 22 telecoms licences had not fulfilled eligibility norms for getting these licenses, the state auditor has said.
The companies had suppressed facts, had less share capital than required, and submitted false certificates for paid up capital among other deficiencies found, the auditor said.
The telecoms venture has since been bought into by Norway’s Telenor, which currently owns 67.3 per cent of the venture with Unitech holding the remainder.
Loop Telecom Private Ltd — 21 licenses
Loop Telecom, which was issued 21 telecoms licenses, suppressed facts, its authorised share capital was much less than required, and it did not have telecom as the main object clause in its memorandum of association among other flaws, the auditor has said.
Videocon Telecommunications — 21 licenses
Videocon Telecommunications, formerly Datacom Solutions, is part of India’s Videocon group and was issued 21 licenses. The auditor said the company had suppressed facts, had much less-than-required authorised share capital and submitted false certificates regarding the company’s paid-up capital.
Etisallat DB Telecom Private Ltd — 15 licenses
Formerly Swan Telecom, the company had been given 13 licenses and also later merged with itself another firm that had won 2 licenses. Abu Dhabi’s Etisalat in late 2008 bought about 45 per cent of the company that was then renamed Etisalat DB Telecom.
The auditor said Swan had suppressed facts, had less-than-required authorised share capital, and submitted false certificates from its company secretary regarding paid-up capital.
The auditor also said a unit of Reliance Communications, India’s No. 2 telecoms company, held more than 10 per cent equity in Swan at the time of issue of the licenses, which is a violation of rules. Reliance Communications has denied the allegation.
S Tel Ltd — 6 licenses
S Tel, which was given six licenses, suppressed facts, had much less than the authorised share capital required to get the licenses, submitted false certificate from its company secretary regarding paid up capital, the auditor said.
Bahrain Telecommunications Co owns a stake in S Tel, whose other major shareholder is India’s Siva Group.
Sistema Shyam Teleservices — 21 licenses
Sistema Shyam, which was given 21 licenses in 2008, is a joint venture between Russian conglomerate Sistema and India’s Shyam Group. Sistema owns majority stake of the company, while the Russian government also has a stake in Sistema Shyam.
Idea Cellular — 13 licenses
Idea Cellular, which was given 9 more licenses in 2008, is India’s No. 4 mobile operator by subscribers. It now owns Spice, which was also given 4 licenses in 2008. Idea said it is using seven of the 13 licenses to be revoked.
Tata Teleservices — 3 licenses
Tata Teleservices, which won 3 licenses in 2008, is part of India’s salt-to-software Tata conglomerate. In 2008, Japan’s NTT DoCoMo bought 26 per cent of Tata Teleservices. — Reuters
