DoT defends decision to give unified licence to Reliance Jio

Our Bureau New Delhi | Updated on May 08, 2014


The fee of ₹1,658 crore collected from Reliance Jio was not for broadband spectrum, but as an entry fee to migrate to unified licence regime, said the Department of Telecom.

The Department of Telecom has defended its decision to allow Reliance Jio to migrate to Unified Licence regime by saying that no favour has been shown to any specific player.

The DoT response comes after the Comptroller and Auditor General raised questions about a policy that permitted Internet Service Providers with broadband spectrum to start offering voice telephony services by paying an additional ₹1,658 crore. According to the CAG, the policy may have resulted in a loss to national exchequer.

However, the DoT has replied that the CAG’s view was untenable and based on hypothetical position. It has also questioned CAG’s powers to raise policy issues which were not related to audit.

According to the Department, the fee of ₹1,658 crore collected from Reliance Jio was not for broadband spectrum but as an entry fee to migrate to unified licence regime.

“The contention of audit report, that the entry fee of ₹1,658 crore discovered in 2001 should not be applicable in 2013, is not correct. It is to be noted that the entry fee of unified access service licence included the cost of associated pan India start-up spectrum,” the DoT said, adding that in the case of broadband players there was no start-up spectrum given for the entry fee it paid.

Reliance Jio, a subsidiary of Mukesh Ambani-led Reliance Industries, acquired Infotel Broadband Services Pvt Ltd in June 2010, soon after firm won nationwide broadband spectrum for nearly ₹13,000 crore. This company had acquired an Internet Service Providers licence under which voice telephony is not permitted.

In 2013, the DoT announced the new unified licence regime under which all types of telecom services are allowed. As part of this new licensing, the Department announced migration path for existing players with older licences.

While those with unified access service licence were permitted to migrate to the new regime without any additional cost, those with plain ISP licences (without spectrum) were asked to pay ₹15 crore as entry fee. But ISPs with broadband spectrum were told to pay ₹1,658 crore as entry fee.

Published on May 08, 2014

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