DoT reviewing licence terms of BWA auction

The department of telecommunications (DoT) is looking at the legal tenability of the clauses related to the shareholding pattern in the Notice Inviting Applications (NIA) it had issued for the auction of the Broadband Wireless Access spectrum in 2010. The DoT has sought opinion from its legal cell. According to the NIA, the successful bidder should have at least 26 per cent equity in the company, directly or indirectly.

But, the DoT is also not sure whether the licensee needs to maintain the shareholding structure which it had submitted at the time of acquiring the licence for the entire period of the licence term. Bsed on the reply on the legal cell of the DoT, the Government may need to amend the NIA.

The issue came up, after Qualcomm has written to DoT seeking approval of its stake offload to Bharti Airtel. While Qualcomm had acquired the spectrum initially, the same was later sold to Airtel in phases.

Augere Wireless, which had also won 20MHz of spectrum in Madhya Pradesh last year, has reduced its stake in the Indian entity to less than 26%.

Qualcomm Asia Pacific had a 74% stake in the venture and then sold its stake to Bharti Airtel. Not only Bharti Airtel, Mukesh Ambani-led Reliance Industries had bought a 95% stake of Himachal Futuristic Communications Ltd that had acquired BWA spectrum through auction.

The NIA also noted that the licensee may, under intimation to licensor (here DoT), replace a promoter or promoters by another, as stipulated, if the Indian promoter acquires the foreign promoter’s stake and it may also transfer equity between Indian promoters or persons including Indian employees of the company.