Government served court notice on frequency allocation

Thursday, 27 November 2008, 04:08 Hrs
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New Delhi: The allocation of radio frequencies to telecom operators has come under judicial scrutiny once again. The Delhi High Court Wednesday sought a response from the government on a petition that said the scarce resource should have been auctioned under a proper policy framework.

A Delhi-based non-governmental organization, Telecom Watchdog, filed the petition which also named seven telecom operators in the case and demanded a thorough probe by the Central Bureau of Investigation (CBI).

Radio frequencies, also called spectrum or airwaves, enable telecom companies to offer mobile phone services.

The petition said leading operators like Airtel, Vodafone (earlier Hutch), Reliance Telecom, Tata Telecom and Idea were able to acquire spectrum beyond 4.4 MHz in a non-transparent manner.

Telecom Watchdog also urged the court to direct the Department of Telecommunications (DoT) to implement the norms laid down for allocation of additional spectrum by the Telecom Engineering Centre (TEC), an expert body that advices the government on technical issues.

The government has been asked to respond by Dec 10.

Communications Minister A. Raja has been maintaining that his ministry's decision to allocate licences and frequencies to telcom operators on a first-come-first-served basis rather than holding auctions was based on the National Telecom Policy of 1999.

The court had already issued to the DoT a notice on another public interest petition against spectrum allocation under a first-come-first-served basis to new players.

Opposition parties have been alleging that the allocation of radio frequencies to mobile telecom operators had resulted in a $13-billion loss to the exchequer. They have said the faulty policy resulted in a windfall for companies like Swan Telecom and Unitech that saw their valuations soar though they have not a single subscriber.

Swan Telecom, for example, bought a licence for 13 circles along with the necessary spectrum for 15.37 billion ($340 million). Subsequently, it sold 45 percent of its stake to UAE's Etisalat for $900 million, taking its book value to $2 billion.

Similarly, Unitech did not spend a single rupee for executing its licence but sold a 60-percent stake to Norway's Talenor for 61.20 billion, while paying only 16.51 billion as licence fee, the Communist Party of India-Marxist (CPI-M) earlier alleged.
Source: IANS
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