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CAG to look into BSNL franchise deals

Piyali Mandal  |  New Delhi 

Will ascertain whether ther has been revenue loss to the telco.

Government auditor has sought information from Bharat Sanchar Nigam Ltd (BSNL) about its to lease out expensive for The development came within weeks after the Department of Telecommunications (DoT) decided to examine the matter, following an order from minister

The and developments come in the wake of reports of revenue loss and misuse of WiMax licences.

WiMax, or worldwide inter-operability for microwave access, is a that offers high speed internet access with fast data downloads.

had paid Rs 8,314 crore for Broadband Wireless Access (BWA) spectrum. To use this, it opted for a revenue-sharing franchisee model.

According to sources in DoT, has already received letter from the CAG, asking for all the details pertaining to its WiMax deal — franchisee selection process, revenue share model and what it has got so far.

BSNL, which is facing huge financial losses, is also losing heavily due to the controversy over its WiMAX franchise, as it is delaying roll-out of the service. had got the at least three years ahead of the private operators, but is yet to achieve any substantial subscriber base.

Private companies got the only in 2010, through competitive bidding. The controversy over selection of franchise had delayed the whole process of roll out.

had selected five franchise companies to offer WiMAX services across the country. Of the five companies, four were allegedly selected through a detailed process but one, SOMA Networks, is charged with getting a contract (in end-2007) without this.

The other companies say SOMA used “political clout”. SOMA says the companies selected lack experience in WiMAX.

The SOMA franchise was to roll out WiMax services in three A-category circles: Andhra Pradesh, Maharashtra (including Goa) and Gujarat. When the agreement was signed with them, had not been auctioned and its price was not known. It took till 2009 for to come with an expression-of-interest process and select for others — Teracom, Take Solutions, Adhishwar and Starnet.

Wimax or Worldwide inter-operability for microwave access is a that offers high speed internet access with fast data downloads.

First Published: Fri, March 04 2011. 00:43 IST