ED probes money laundering case against Bharti Airtel (India)
The Indian Minister of State for Finance S S Palanimanickam informed the Rajya Sabha that the Enforcement Directorate (ED) is probing money laundering cases against leading telecom operator Bharti Airtel, according to a report by ET.
As per the report, he said that the Directorate of Enforcement is investigating cases under the provisions of Prevention of Money Laundering Act, 2002, and Foreign Exchange Management Act, 1999, involving M/s Bharti Airtel Ltd.
The minister, however, did not provide additional information, saying that it may not be in the interest of the ongoing investigations to provide any further details. The report reveals that in August last year, Airtel was under the scanner of the Enforcement Directorate for alleged violations of Foreign Exchange Management Act (FEMA).
The company had responded at the time, saying that Bharti Airtel adheres to the highest standards of corporate governance and always complies with all the rules and regulations laid down by various agencies and the licensor namely DoT. They will provide all relevant details to the concerned authorities as and when required and will offer full assistance to clarify any concern.
Qualcomm may lose mobile licences worth $ 1 billion (India)
Qualcomm, an American based communications company, may be at risk of losing its mobile broadband licences in India. As per reports, Qualcomm was required to submit its application for an ISP licence within three months of the conclusion of the BWA (broadband wireless access) auction in June 2010. However the Department of Telecom (DoT) has claimed it did not receive Qualcomm’s paperwork until December 2010.
Although Qualcomm had spent more than $ 1 billion to acquire four BWA licences in the auction in 2010, the DoT has warned the company that its entire investment will be relinquished if its permits are cancelled.
Qualcomm has responded saying that the DoT did not make its request for the application until November 2010, following which Qualcomm sent its reply the following month. As per reports the company said that they have followed all the stipulated rules in both letter and spirit and that the DoT should grant them a licence immediately so that they can execute their plans of empowering India and its consumers with broadband connectivity.
BSNL may scrap tender for 15 million GSM lines (India)
BSNL, a leading public sector units providing comprehensive range of telecom services in India, may scrap its tender for 15 million GSM lines owing to the poor response from private vendors.
As per reports, a Department of Telecom official has said that the 15 million GSM tender floated by state-run BSNL is likely to be scrapped as only two or three private vendors have shown interest in the e-tender process.
Sources claim that the 15 million GSM line tender is estimated to be worth around $ 1.03– 1.23 billion. However, reports suggest that BSNL CMD R K Upadhyay has said that as of now, there is no such plan to scrap the tender and that the process is evolving.
Department of Telecomm cancels 8 telecom licences (India)
Telecom Regularity Authority of India (TRAI) recommended that 69 licenses should be cancelled owing to failure of telecom operators to meet rollout obligations, of which the Department of Telecomm (DOT) has cancelled only 8 licences. As per reports, only Aircel (two), Dishnet (three), Etisalat (two), and Sistema Shyam (one) were issued show-cause notices for cancellation of licences.
However, sources claim that since the majority of the company’s licenses remain intact, the impact on their business will be negligible. Further, this move will not really affect consumers either as the violation signifies lack of network, and thus subscribers.
Govt to send show-cause notice to Idea Cellular (India)
The government has stated that it will be be sending show-cause notice to Idea Cellular asking the telecom operator why its licence of five circles should not be cancelled.
According to Department of Telecom (DoT) Secretary R Chandrashekhar, they will send Idea showcause notice in five circles for overlapping licences.
Idea Cellular in 2008 picked up 41.09% stake in Spice, resulting in an overlapping situation in which both the companies held licences in six circles.
The company had stated that it has not breached any condition of the licence agreement. It stated that it had written 20 letters to the DoT over the past 30 months but had failed to get any response from the government.
Indian telecom ministry to send notice to Bharti Group
The Indian telecommunication ministry will reportedly be sending a demand notice to Bharti Group to recover pending dues arising out of alleged under-reporting of revenues for the years 2006-2007 and 2007-2008.
The Department of Telecommunication (DoT) has prepared a draft demand notice, which has been sent for legal vetting. A special audit of the accounts of Bharti Airtel and its allied group of companies for 2006-2007 and 2007-2008 was conducted by the DoT to verify whether proper Adjusted Gross Revenue (AGR) statements were submitted and the licence fee there on was paid correctly.
The auditor had more than a year ago submitted a report more than a year ago and pointed out some discrepancies in the account statements, with a few of them under dispute in telecommunication tribunal TDSAT.
The DoT conducted a similar audit for Vodafone-Essar, RCom, Idea Cellular and Tata Teleservices. All the auditors have submitted reports and similar action is being contemplated against all the companies. According to sources, the special audit had revealed about US$22.29 million pending from Bharti Group.
Decision on license cancellation in a month’s time (India)
The Telecom Ministry has stated that it will decide in a month’s time on cancellation of licenses given by former Telecom Minister A Raja in 2008 to allegedly ineligible firms.
According to Telecom Secretary R Chandrasekhar, they have received replies from all 85 license holders who were issued showcause notices. They are legally examining them and should be able to take a decision on it in a month’s time. He categorically denied that any license has been cancelled so far.
He added that the Telecom Ministry has issued notices to firms on two issues — ineligibility to get licenses and missing roll-out obligations within the stipulated timeframe; the process to send notices would be completed within a week.
As per the DoT officials, DoT has to give 60 days to the operators to file their response to the showcause notice for cancellation of licenses. In certain cases, 60 days are over while in some, there is till some time.
The matter is being examined by various investigating agencies and also a parliamentary panel.Notices have been issued to Swan Telecom (now Etisalat DB), Datacom (now Videocon Telecom), S Tel, Uninor and others, either due to ineligibility or for missing roll out obligations.
In its reply to the Public Accounts Committee, headed by BJP leader Murli Manohar Joshi, the DoT again rejected the allegation of any notional loss due to the issuance of 122 new licences in 2008 . He stated that the premium placed on the scarce resource from the perspective of a producer need not necessarily translate into a loss when seen from the view point of the consumer and public welfare.
According to DoT, the concept of notional loss when spectrum is given at a price discovered few years earlier has to be balanced with the gains accruing to the consumers and the general improvement in public welfare in the form of faster economic growth.
The PAC had sent 40 questions to the DoT related to the 2G spectrum scam.
Suggesting that the notional loss reported by the audit report should be seen in light of the benefit that it has given to consumers and general public welfare in the form of quick economic growth, the DoT stated that the objectives of the Telecom Policy since 1999 was to increase teledensity and affordability for consumers, while maintaining a level playing field between incumbents and new players as well as revenue accrual for the government.
