Thomas K Thomas

ByCell invokes bilateral treaty on its scrapped 2G licences

Thomas K Thomas New Delhi | Updated on August 11, 2012 Published on July 17, 2012

Russian private venture ByCell has become the latest foreign investor to invoke bilateral investment treaty in the telecom sector.

The company has sent a legal notice to the Department of Telecom threatening legal action in the international tribunal.

The telecom department had earlier revoked the licences issued to ByCell, following concerns raised by the Home Ministry about the company’s shareholding and source of funds.

The DoT had issued letter of intent to ByCell in five circles. However, the company’s plans got stuck after the Home Ministry asked the Foreign Investment Promotion Board to review the clearance it had given to the Swiss-registered telecom company.

ByCell is promoted by Russian nationals through a Cyprus-based company — Tenoch. Tenoch owns 97 per cent stake in ByCell Holdings AG, a Swiss company, and this entity owns 73 per cent stake in ByCell India.

The company, which had received letters of intent for telecom licences in 5 circles, has a joint venture with Hyderabad-based Bitcorp Pvt Ltd.

The company has claimed that the actions of the DoT and the telecom ministry have wrongfully frustrated the promoters to get a fair and equitable treatment as required under the bilateral treaties signed between India and Russia, and India and Cyprus.

“India has failed to offer any serious justification for the revocation. India has alleged that the non-availability of authentic information about the entities which have control over Tenoch gave rise to security concerns. But that allegation was manifestly baseless,” ByCell stated in its legal notice to the Government sent though through its lawyers.

Security issues

In January 2008, nine companies were given LoIs to launch services, but the DoT held back ByCell’s application after security issues were raised. The main concern was the lack of information available on the promoters.

Other foreign investors, including Telenor and Sistema, have also invoked bilateral treaties.


Published on July 17, 2012
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