Govt to issue show cause notices to erring telcos

Govt to issue show cause notices to erring telcos

Facing allegations of massive financial irregularities in 2G spectrum allocation, the govt has said show-cause notices will be issued to 119 licencees for suppressing facts and also for missing roll-out obligations as per the terms and conditions of licence.

"... we believe that some of the companies might have suppressed facts, might have got an undue advantage in accessing licences," Telecom Minister Kapil Sibal told reporters in New Delhi on Monday.

Asked about the revenue loss to the exchequer by allotting spectrum at 2001 prices, as pointed out by the CAG, the Minister said, "The CAG has stated this. This is something which the Ministry will decide and we will apply our mind individually to each case."

The notices will be issued to 119 licencees of which 81 fall under both categories of ineligibility to get licences and 38 for not meeting roll-out obligations alone as spelt out in the licences, Sibal said.

He, however, declined to name the companies which would be issued show cause notices.

Sources said that among the new operators, the companies are Uninor, S Tel, Loop Telecom and Videocon.

The licencess would be given 60 days time to respond to show cause notices, Sibal said, adding each case would be dealt with separately.

"After studying their response, a decision will be taken on whether these (licences) need to be cancelled or a penalty should be imposed," the minister said.

The ministry will start issuing the notices in next three-four days, senior DoT officials said adding the Minister has cleared the file.

The government will look into the Memorandum of Association of the companies and their paid-up capital to ensure that they were eligible for spectrum allocation at the time of applying for licences.

Sibal emphasised that "the time has come for a policy framework that is certain, that is good for the long term growth of the industry and this government will not hesitate to ensure that the rule of law is honoured and those guilty are dealt with the accordance thereof."

Asked about the Opposition demand for a Joint Parliamentary Committee (JPC) probe into the spectrum scam, the minister regretted the behaviour and said, "The government is ready to discuss the issue on the floor of the House."

"We are not averse to monitoring by the Supreme Court of the investigations. We are not protecting anyone and the monitoring by the apex court is the best way to look into it," he added.

Besides the issue of eligibility and missing roll-out obligations, the government has asked the Ministry of Corporate Affairs to look into the CAG's observation that Swan Telecom, which bagged the licence and spectrum in 2008, acted as a front for another company.