DoT criticized for method of giving licences
New Delhi: DoT has again come under fire by a parliamentary committee on communications for the ‘first come first serve’ procedure adopted by DoT to dole out licences for fixed line telecom operations. These licences will also allow companies to provide ‘limited’ mobile services.

While only a handful of companies — Reliance, Tata Telecom and HFCL — have been issued with 40 letters of intent, applications from 15 other companies for 107 operating circles have been sent back for review.

DoT secretary Shyamal Ghosh has also come in for criticism from the committee.

The committee says that the three companies, which were issued LoIs have already been providing basic telecom services and grant of licence to only three operators for 40 circles prior to considering other applications for 96 circles has vitiated the licensing process." It has also attacked the selection process also by arguing that, "considering that selection was based upon complete applications as contended by (Ghosh) the committee fails to understand why incomplete applications were entertained at all.

(Ghosh’s) contention that it was not possible to scrutinise each and every application at the time of receipt does not convince the committee as some time limit should have been fixed to scrutinise the applications in the interest of fair play."

It says: "There is no stipulation as to how many players will be inducted and the whole process seems to lack transparency."
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DoD goes to law ministry for advice on Sebi orders
New Delhi: Disinvestment minister Arun Shourie says he wants the law ministry’s advice on the implications of the Securities & Exchange Board of India’s (Sebi) crackdown on Sterlite, Videocon and Credit Suisse First Boston (CSFB) on the privatisation process.

Mr Shourie said, four points had to be clarified; the scope of the Sebi order— whether the order against Sterlite is applicable to only Sterlite Industries or also to Bharat Aluminium Corporation (Balco) in which Sterlite holds 51 per cent equity.

He says the distinction is because one of the reasons for privatisation is that public sector undertakings need funds for survival and growth, which the government is unable to provide, the minister said. So, if the strategic partner were unable to infuse fresh funds, the exercise would lose some of its rationale.

The secondly point is with regard to the raising of funds from the market, and if the bar relates to Sterlite only or to both Balco and Sterlite, he said.

The third point of clarification is the impact of the Sebi ruling on the transactions already completed — that is, the take-over of Balco by Sterlite.

The final point is related to future bidding, he said. If Videocon is debarred from bidding for Indian Airlines and Sterlite for Hindustan Zinc Ltd, and later the two companies are able to get a stay order from the high court, they can legally challenge the bar on them.

Sebi’s bar on CSFB has been taken very seriously by DoD, for CSFB has been appointed as global adviser for the privatisation of Videsh Sanchar Nigam Ltd, which means that it has access to vital information about the PSU.
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