AT&T's long-distance licence comes with rider

The department of telecommunications (DoT) has decided to permit US telecom giant AT&T's Indian arm to operate both international and long-distance services in the country, but with a rider.

DoT will issue the licence for the services with a condition that it will be free to take action, which includes cancellation of the licence to operate these services, if ongoing investigations find AT&T guilty of evading taxes in the country and operating long-distance services without a licence.

DoT has stated in a note that the "issue of the licence to the applicant is without prejudice to any action that may be taken as per the law, including cancellation of the licence for any violation by the applicant company or the subsidiary company of the applicant company or by any other subsidiary of the holding company". It also urges that the investigation be speeded up.

The decision to include the rider was taken at the department's empowered committee meeting held on September 1, chaired by DoT Secretary DS Mathur.

The clause is being included to safeguard the interests of the government, as an investigation is on against the company for having allegedly operated long-distance services in the country without a licence and thereby having evaded various taxes. DoT has also sent notices to other international operators and has even questioned Indian telecom companies on the issue.

The committee had pointed out that a letter of intent could be granted for international and long-distance services in view of the fact that the applicant company, AT&T Global Network Services India Pvt Ltd, (in which AT&T has a 74 per cent stake) fulfils the eligibility criteria for such licences.

It also said the investigation against the holding company and other companies associated with it was at a preliminary stage and a number of documents were to be called for and examined.

Industry sources say there is no reason to believe that AT&T will not go ahead with the launch of its services in India and wait until the investigations are completed.

The matter came to a head when some Members of Parliament wrote letters to DoT, saying international service support organisations like AT&T needed to be investigated as they had operated without a licence.

However, experts said as part of international practice, companies like AT&T operated only as a service and sales support organisation for VSNL and they only invoiced bills on their behalf.