Most Indian 2G spectrum winners ineligible

The new Indian union telecom minister, Kapil Sibal has now decided to crack down on the telcos that have won licences. More than 80 licences might be identified as ineligible to have won and about 38 companies are allegedly falling under the category of not meeting roll-out obligations.

Sibal said quite clearly that there has been a violation of laid-out obligations in awarding the licences and will be sending out show cause notices to companies who have suppressed facts and enjoyed undue privileges.

Sibal also said that most of the companies have self-certified but have failed to conform to the Memorandum of Association (MoA) which has helped them take advantage of first-come-first-serve basis in winning the 2G spectrum.

Sibal said, “We have decided to send notices to 85 companies. We will give them 60 days to respond. We will take action based on merit and see if the memorandum of association and equity conditions has been fulfilled or not,” Sibal said at a press conference.

It won’t come as a surprise if the Telecom Ministry goes ahead and cancels the licences of those involved in wrong-doing.

Some names are coming up such as S-TeL, Uninor, Loop and Videocon that are said to have not met the eligibility norms.

If these companies lose the licence, it would be a critical situation as Uninor has already rolled out services. Now, what has to be questioned is why the government didn’t take action before these companies rolled out services?

On the subscribers’ front, now they might have to use Mobile Number Portability to switch on to other companies.

Sibal quite firmly said, “The time has come for a transparent system which is very essential for a stable telecom sector.”

Earlier, CAG report had found that Swan telecom was a front company for Reliance communications. Now, this matter has been referred to Ministry of Corporate Affairs.