Govt says criteria for BWA spectrum sale publicised in advance

Amid CAG observing inadequate eligibility criterion in BWA spectrum auction, the government today said conditions for participation for all applicants were made public well ahead of the airwaves sale.
CAG in a draft audit report had observed that inadequate eligibility criterion allowed an ISP to win pan-India BWA spectrum in June 2010. Its promoters on that very day sold off the company to Reliance Industries Ltd (RIL).
"It has been clarified to the audit that the eligibility conditions for participation in BWA (Broadband Wireless Access) auction for all applicants including ISP licencees were decided and published in Notice Inviting Application dated 25.02.2010 based on telecom regulator TRAI recommendations..." Telecom Minister Kapil Sibal informed the Rajya Sabha.

"Further, as per the guidelines for grant of ISP licence prevailing at the time of auction in year 2010, there was no restriction with respect to minimum net worth or paid up equity capital criteria," Sibal said.
As per the provision in ISP (Internet Service Provider) licence, the licensee company may, under intimation to licensor, transfer equity between Indian promoters or person(s) or make changed in its equity pattern.
The CAG has not pointed out serious irregularities in award of BWA spectrum to private companies and subsequent spectrum trading by these companies, Sibal added.

It may be noted little-known Infotel Broadband Wireless Services won nationwide BWA spectrum for about Rs 12,847.77 crore.

On June 11, 2010, RIL had announced that it entered into a pact to acquire a substantial stake in Infotel Broadband Services, which had emerged as a successful bidder in all the 22 circles of the auction for BWA spectrum.
RIL had said it would invest about Rs 4,800 crore by way of subscription to fresh equity capital at par to be issued by Infotel. Post this investment, RIL had said it would own 95 per cent of the equity.
The BWA auction, which were conducted after 3G auctions in 2010, fetched the government about Rs 38,500 crore.