The Hindu Business Line : ‘Reveal corporate identity of new applicants for cellular licence’

New Delhi, Sept. 11 With as many as 12 companies lining up for a new mobile licence, the Cellular Operators Association of India (COAI) has urged the Department of Telecom (DoT) to unveil the corporate identity of all the applicants as it feared some of the companies were circumventing norms to bypass the cross-holding restrictions.

The COAI in a letter to Mr D S Mathur, Secretary, DoT, said: “DoT cannot allow a group of associated companies to circumvent licence conditions and monopolise spectrum by means of separate corporate personalities of individual members.” DoT has 160 applications from the 12 companies including Idea Cellular, Spice Telecom and Tata Teleservices. The COAI’s concern is that a large number of companies have used names that do not reveal their promoters. For instance Reliance Communication has applied under the names Swan and Cheetah. There are other entities who have applied under the name STel, Datacom and Alliance Infratech

As per government rules, no company or its associates can have equity holding of more than 10 per cent in two operating companies in the same service area. The COAI said since it feared that associated companies were being used to defeat telecom policy objectives and licence conditions, DoT should lift the corporate veil and ignore the separate corporate personality of each company in favour of the economic entity constituted by a group of associated companies.

“DoT cannot allow a group of associated companies to circumvent the licence conditions and monopolise spectrum by means of separate corporate personalities of individual members. We submit that for all licences and applications, the corporate veil has to be lifted to determine the economic entity or promoter group that is the real beneficiary. Licence conditions cannot be circumvented by means of separate corporate personalities of individual members,” COAI said.

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