Firm to contest DoT order, says it had complied with all conditions govt says firm?s compromise offer came late
Surajeet Das Gupta & Mansi Taneja / New Delhi Sep 23, 2011, 01:39 IST
The $1 billion paid by Qualcomm Inc for four broadband wireless access (BWA) licences, in Delhi, Mumbai, Haryana and Kerala, may be forfeited to the government.
The US telecom giant on Thursday confirmed a letter from the department of telecommunications (DoT) cancelling the licence it was allotted to operate broadband wireless services in these four telecom circles.
A Qualcomm India spokesperson said: "We received a notice (from DoT) on September 21, informing us that the licence to the companies formed with our Indian partners, for use of the spectrum Qualcomm won at last year's auction, has been rejected on grounds that we find to be baseless. In fact, the application process was fully complied with, and we will continue to work with the Indian authorities to resolve this matter."
Replied a senior DoT official: “The LoI (letter of intent) is valid for three months, within which the company should have taken an ISP (Internet Service Provider) licence. They did not apply for it on time. Since the LoI is not valid now, the allocation of spectrum will be revoked, as per provisions of the licence conditions, and the money may be forefeited.”
Under the notice inviting application the DoT had made it clear that at any stage if "spectrum allocated is revoked" "no refund will be made".
Under the LoI given in July this year, the company was directed by DoT to apply for the relevant licence, in this case an ISP licence, within three months. DoT says this was not done. It also says the company had applied for four ISP licences, when under the rules it was allowed to nominate only one nominee company to apply for a Category ‘A’, All India ISP licence, another area where the rule was not followed.
The DoT official said the company's acceptance on September 9 of a compromise in which they were willing to apply for one instead of four licences by merging the companies came only after a decision was taken to reject the ISP applications.
"We will look into the matter only after Qualcomm's response to our communication comes,” he said.
Qualcomm contends that according to its interpretation, it could apply for four separate ISP licences. In July-end, say sources, Qualcomm had verbally conveyed to DoT that it was willing to apply for one licence instead of four, as was being demanded by DoT. However, it expected DoT to give an official communication that it must do so, before giving their official acceptance. When the letter did not come, the US company decided to write on its own, on September 9.
Questions were raised within DoT that by taking separate licences, Qualcomm was looking at selling their circles separately, rather than as a block, as it was not interested in running the business. Qualcomm had publicly stated that its intention was not to run the business but to reinforce that LTE (which they are backing) becomes the choosen technology instead of WiMax for BWA and they would be looking at operators to divest their business.
Qualcomm had paid $1 bn (about Rs 4,600 crore) to win the four BWA licences and received a letter of intent in July 2010. It denies the charge of not having applied within three months, saying its locally incorporated companies applied for an ISP licence on August 9, 2010, well within the three-month window.
The US company was told by DoT on November 30 that it needed some more information and also wanted these companies to file proof of being Qualcomm Inc nominees. Qualcomm gave a letter confirming this on December 20, 2010.
This, says DoT, is the date when the company actually gave the names of its nominee companies in India, which was more than three months from receiving the LOI and, therefore, reason enough for cancelling the licence.
Incompetent politicians, bureaucrats and others who constitute Govt., State and Central, can not, will not, never, ever understand how business & technology works. Hence, whether the rejection is on frivolous grounds or valid reasons, how can one explain holding on to US $1Bn irrespective of the outcome?
Unfortunately democracy means power of majority. And they will collectively ensure that the majority, the voting masses, remain illiterate and therefore completely ignorant of their devious design of looting this country to stone age. Moreover, the few educated voters will never outnumber the illiterate masses who are gullible to the worldly vices of petty money, alcohol, gifts etc. and will continue to be the means to buy power. Why does an election cost so much money anyway? Why does it have to be unaccounted?This is INDIA, we are INDIANS. Chalta hai...
Reminds me of another telecom minister in the recent past trying to force a telco to exit themselves in favour of a investor from Malaysia.
All for the big brother from Mumbai! All for the rich big brother!!
Given the scam's in telecom business, seems this too will be going to be decided in the court. Any compromise will definitely attract PIL's.Interesting how the courtroom will decide on such matter.
What's with DoT? As if 2g and 3G bungling was not enough, they are not inviting another legal challenge by cancelling Quallcom's license on frivolous grounds.
Agreed, Qualcomm always had vested interests in applying for BWA licenses. But they appear to have meticulously followed all laid down rules and regulations. Further LTE is the only cost-effective option of connecting rural India to internet age.
The Government will never allow India to flourish with their red tape. Why should the Government try to keep the 1 billion dollars. Work it out and let technology flourish. Don't kill off technology in India.
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