New Delhi, November 29
To assuage the tempers of the Opposition, which has stalled proceedings in Parliament for 12 days now, the government today decided to crack down on the start-up telecom companies, which were granted licences in 2008.

Telecom Minister Kapil Sibal issued a statement saying that 85 companies, which had been granted licences on a first-come-first-served basis by former Telecom Minister A Raja, would be issued notices on various grounds.

The companies would be given 60 days to respond to the notices. “We have decided to send notices to 85 companies. We will give them 60 days to respond. We will take action based on merit and see if the Memorandum of Association and equity conditions have been fulfilled or not. Notice will be served on these grounds too,” said Sibal.

Sibal added there were 119 instances, where start-up telecom companies had not met the roll out obligations. He also warned that licences of those telecom companies which failed to launch operations within a year of getting the licence may be cancelled.

These companies had been seeking protection from Raja for either return of their licence fee or permission to either sell their licence to the existing telecom firms or be allowed to merge with them. He also admitted that some companies had been allowed to jump the queue, when licences were issued.

These companies were not eligible for the 2G licences granted in 2007 and 2008 and went through a self-certification process, Sibal said.

“This has serious implications for transparency of process,” Sibal said at a press conference. “It allows companies to get ahead of the queue on basis of first-come-first served, in that they did not register first with the Registrar of Companies,” he added.

The minister added damages would be sought from those companies, which did not fulfill rollout obligations.

Incidentally, the Comptroller and Auditor General (CAG) had taken the Department of Telecom (DoT) to task for not seeking Rs 679 crore in penalties from the companies which not fulfilled the roll out obligations.

Among the companies found to be ineligible are eight Unitech group companies, including Infrastructure Pvt Ltd and Azare Properties Ltd, besides Shipping Stop Dotcom Pvt Ltd, presently Loop Telecom, the Allianz Infratech which merged with Etisalat DB Telecom PVt Ltd and Datacom Solutions, now Etisalat DB Telecom.

These licences were given despite the companies not having the stipulated paid-up capital at the time of application. CAG had earlier asked DoT to cancel licences allocated to all ineligible companies and to ask them to apply afresh.

On the CAG report, he said: “This (CAG report) will be looked at in light of notices and responses of the licences,” he said.

“We hope this will send message to those who sought to take advantage through a process that is not transparent. The message is that time has come for policy framework that is good for industry and the government will not baulk to ensure rule of law is honoured. Those guilty should be dealt with accordingly,” he said.