DoT audit questions fee relief for Telenor

Norwegian telecom firm Telenor might find itself in fresh trouble, as an audit by the department of telecommunications (DoT) has questioned a government decision to adjust the company’s entry fee against the money paid by its former partner, Unitech.

The decision was taken by the empowered group of ministers (eGoM) on telecom during last November’s spectrum acution. Uninor, the erstwhile joint venture between Telenor and India’s Unitech, had paid Rs 1,658 crore for its previous mobile permits that were revoked by the Supreme Court in February 2012. The apex court had revoked  122 controversial licences, in which 22 were Uninor’s.

In the November 2012 auction, Telenor won six licences through a subsidiary, Telewings Communications.   

Telewings was required to pay Rs 4,018 crore in installments. “They made 33 per cent upfront payment of Rs 1,326 crore and made a representation, requesting DoT to set off the entry fee of Rs 1,658 crore paid by the eight companies of Uninor,” the report said.

“We have duly participated and won in the spectrum auctions in six circles. Telenor group was the biggest contributor to the auction proceeds (Rs 4,300 crore).

Uninor has proceeded exactly by the Supreme Court order and the stated policy of the government and has met all operational obligations under the licence. Since we are not aware of internal government processes or reports we do not comment on these speculations,” Telenor said in response to a query.

The audit report also stated a similar request was made by Idea Cellular as well. They had asked for a set-off of fee against that paid by Spice Communications, which they had acquired earlier, and whose licences were quashed as well. This request was, however, disallowed.

The audit report claims fee set-off in favour of Telewings was “irregular, arbitrary and discrimiatory”. “Neither was any consultation done with the Telecom Regulatory Authority of India (Trai), nor was the approval of Telecom Commission sought before taking the decision,” the audit report added.

The report also said Uninor had missed roll-out obligations, which are mandated by the government, as a part of the licence conditions. Audit has found though Uninor obtained 4.4 Mhz spectrum in all circles except Delhi, during the period April 2008 to January 2009, the firm has not rolled out services as per the provisions of UAS licence in any service area, within the stipulated period.

As per the licence conditions, all telecom operators that receive spectrum are supposed to roll out services in the 90 per cent service area in metros, and 10 per cent district headquarters in other service areas within 12 months of the date of award of licences.

The decision of the EGoM to adjust the entry fee of Rs 1658.57 crore paid by the eight companies of the Unitech Wireless group towards the payment due from a newly incorporated company was highly irregular, arbitrary and discriminatory, according to the audit report.