DoT extended undue benefits to Reliance, Dishnet: CAG

Country's apex auditor CAG has said the the Department of Telecom extended undue benefits to RCom and Dishnet Wireless (now Aircel) at the cost of others while allotting spectrum in 2008.

"... The department failed to follow its own FCFS (First-Cum-First-Serve) policy resulting into an undue benefit to Dishnet Wireless Ltd and Reliance Communication Ltd in Punjab Service area," the Comptroller and Auditor General (CAG) has observed.

The DoT had last week sent a detailed reply to all the issues raised by the CAG.

The CAG said the then existing operators like Hutch (now Vodafone Essar), Bharti and Spice, who had applied for allotment of additional spectrum prior to these two companies, were not allotted the same.

"On 25.8.06, DoT denied their request for additional spectrum on the ground of non-availability of spectrum and further stated that their requests have been noted for necessary action when the additional GSM spectrum is available.

"Thereafter, the operators kept on pursuing their requests for additional spectrum with the WPC wing," CAG has said in a memo issued to the Wireless Advisor, DoT, during Audit of issue of Licences and Allocation of (2G and 3G spectrum).

It said Hutch, Bharti and Spice were providing mobile services in Punjab circle prior to Reliance and Dishnet.

Hutch with a subscriber base of 6.34 lakh in February 2006 had applied for 8 MHz additional spectrum on April 5, 2006.

Likewise, Spice and Bharti with a subscriber base of 15.14 lakh and 17 lakh in 2006 had applied for additional spectrum of 10 MHz each on July 2006 and April 2006 respectively, it said.

However, CAG mentioned that their requests were denied whereas "...All these operators complied with the subscriber base eligibility criterion of additional spectrum...Needed to provide good quality of services".

It also mentioned that approval of the allocation of start-up spectrum was communicated to Dishnet on January 11, 2008 whereas it has applied to the WPC (wireless planning coordination) wing on December 18, 2006.

It pointed out that Reliance was allocated start-up spectrum on January 11, 2008 under dual technology policy which was approved by the department on October 18, 2007.