)
The Solicitor General of India has backed the Department of Telecom’s (DoT) stand on allocating broadband wireless access (BWA) spectrum to Reliance Jio Infocomm Ltd (RJIL) and allowing the company to get a unified licence for Rs 1,658 crore.
RJIL, a subsidiary of Mukesh Ambani-led Reliance Industries, acquired Infotel Broadband Services Pvt Ltd in June 2010, soon after the little-known firm won nationwide BWA spectrum for about Rs 12,750 crore. The CAG in its draft report has castigated officials of the DoT for loopholes that allowed RJio to get pan-India high-speed BWA spectrum at the cost of the exchequer.
The auditor had compared rates of 3G and BWA spectrum from which it estimated that giving permit to RJio to provide mobile telephony accorded undue advantage worth Rs 22,842 crore to the company.
According to sources, SG is believed to have opined that "charging additional entry fee i.e more than Rs 1,658 crore or charging additional SUC on the basis of fees charged from differently placed licencees, would be arbitrary, unfair and contrary to Article 14 of the constitution." The SG said that it is felt that the notional loss of Rs 22,842 crore may not be sustainable.
The DoT had earlier said the auction rules allowed all kind of telecom operators to participate in auction and there were no inherent limitation in providing voice service using BWA spectrum.
The CAG in its draft report had also said the DoT did not raise a red flag on possible violation of confidentiality conditions in notice inviting application (NIA) by Infotel.
Sources said the SG is believed to have opined that there are several ways by which funds can be raised even when small companies, particularly if a strong business case and potential revenue stream can be demonstrated to an investor.
"No occasion can therefore be said to have arisen for DoT to enquire into Infotel's ability to raise funds or its proposed sources of funding," the SG opined.
The DoT had said that all decisions related to auctions were of the nature to fulfil the larger policy objectives in the interest of the economy and the government has not only the sovereign right to take policy decision but is also duty bound to take necessary steps to achieve policy objectives.
