Dot’s Role amid Controversies

Essar Cheated Dot

Essar Cheated Dot
Essar Cheated Dot | Source

Essar Cheated Dot

Midway Changes May Affect Investors

Department of Telecom (DoT) has been in the news in recent times because of many controversial happenings in the telecom industry ever since the 2G spectrum scandal involving $40 billions broke out. Now Finance Ministry has opposed DoT’s 2G proposal. Joint Panel has decided to protest against the changes effected in the licence norms midway. They fear that any change in licence norms midway may drive away the investors. India needs investments badly to boost up its economy. DoT plans to levy auction discovered charges on the existing players but the finance ministry is opposed to it. DoT’s level playing field argument has been rejected by the finance ministry stating that new players need to be given encouragement to face the tough market conditions.

Essar Cheated Dot

In the meanwhile, CBI has charge sheeted the Essar group promoters Ravi and Anshuman Ruia for cheating DoT. Was it that they cheated DoT or DoT willingly allowed it to be cheated? DoT invited proposals to choose spectrum auctioneer and the last date was fixed at May 15th. DoT has refused to work on defence spectrum due to lack of funds. Mobile operators were relieved that the Attorney General backed the DoT views on roll-out obligation. DoT submitted an annual plan allocation of Rs.6767 crore for 2012-13. The amount included expenses for constructing optical fibre cable network for the defence spectrum. DoT also demanded an amount of Rs.8500 crore under non-plan head for the Universal Services Obligation fund. But the finance ministry has allocated funds of only Rs.4000 crore under the non-plan category and Rs.800 crore under the plan category.

Kapil Sibal Defends Raja

The Supreme Court had given a four months deadline to DoT for the completion of the 2G auction process. DoT drew up a 400-day roadmap for the auction. The Supreme Court had cancelled 122 licences given earlier by the telecom minister Raja stating that these allocations were flawed. But the present telecom minister Kapil Sibal disputes the Supreme Court statement, claiming that no unfair act was committed by the erstwhile minister Raja. Now DoT has to decide on the fate of 73 mobile permits including that of S Tel, Ideal Cellular, Reliance Communications and Tata Teleservices.

Tricky Questions but No Answers

There are several tricky points involved which DoT will have to decide in the coming days. S Tel and Idea Cellular were holding 3G licences in some areas and now what happens after their permits have been cancelled is a tricky issue. What to do with the bank guarantees of the 122 cancelled licences by the Supreme Court? Should they be returned or encashed? What about the licence fee? Should it be returned? As the government is a party to the loan agreements between the telecom firms and the banks can the lending banks claim these licences? What about the pending law suits against these companies in various courts? There are some impending mergers and acquisitions, for example, Idea-Spice, among the Unitech group companies and Allianz - Etisalat. What will happen to these merger proposals now? According to the rules and regulations, failure to rollout the services in time will attract penalty. Can such a penalty be imposed on these companies by the DoT now? Will it be fair? During the four months period, can DoT issue fresh licence to new players?

CBI Investigations May Reveal the Truth

DoT wants the Ministry of Law to decide on the date from which the proposed one-time fee can be charged on 2G. DoT has also asked the permission of the telecom minister Kapil Sibal for recovering Rs.823 crore from five telecom firms namely Vodafone, Airtel, Tata Tele, Reliance Communications and Idea Cellular. Central Vigilance Commission (CVC) has referred three main cases involving the officials of MTNL, BSNL and DoT to the CBI for investigations. The cases involve issue of international log distance licence by DoT to a firm by an entity based in Hong Kong. Canara Bank and Syndicate Bank are also involved in the scam. CVC is also investigating the role of the DoT officials in the 3G roaming deals of telecom firms. But Kapil Sibal says that no unfair thing has happened and everything done was fair. DoT is arguing that the telecom dispute tribunal has no authority to decide on the 3G roaming issue.

Security Concerns about Chinese Companies

DoT has raised security concerns about the Chinese equipment vendors namely ZTE and Huawei. China is India’s biggest enemy. China attacked India in 1962 and captured 32000 sq km of its Territory. It is laying claim on many parts of India like Arunachal Pradesh. It is arming Pakistan with nuclear weapons to be used against India. The government wants to give preferential treatment to the Indian telecom equipment firms but the European and American governments are opposing the move and exercising pressure on the government. Prime Minister’s Office has asked DoT to consider granting USO subsidy directly to the rural users.

Meter Reading May Be Automated

There is a move to transmit automatically the water, cooking gas and electricity meter reading to the concerned authorities through air waves. Once DoT approves the proposal and sanctions the 433 MHz frequency waves for the purpose, the agents will not visit the homes to record the meter readings. DoT also favours modems and handsets to come under the new retail FDI (Foreign Direct Investment) norms. Supreme Court granted DoT permission to collect licence fee on non-telecom activities of the firms in last October. Last year DoT chalked out a plan involving Rs.30 crore funds for the new Internet protocol. DoT is also demanding powers to take back unused spectrum. Finance Ministry has asked DoT to probe into the Radia tapes controversy. But Kapil Sibal is of the view that there was nothing wrong with the Radia tapes and that these were ordinary conversations about general topics like cricket matches, weather etc.

Kapil Sibal Feels Sonia Gandhi Is Innocent

Justice Patil report speaks elaborately as to how DoT flouted different rules and regulations in the telecom industry since 2001. But again, Kapil Sibal is of the view that the DoT has been functioning honestly and not a single rule has been flouted. Perhaps everything will be swept under the carpet. There are views that Sonia Gandhi and Rahul Gandhi may be the final beneficiaries in the 2G spectrum scandal. But Kapil Sibal feels that Sonia Gandhi and Rahul Gandhi are quite innocent.

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