Clarify ISP status: Qualcomm to Dot

DoT likely to seek law ministry opinion on single licence, says issue being examined.

US telecom major Qualcomm has sent a second letter to the department of telecommunications (DoT), asking for a clarification on reports that the department had rejected its application for an Internet Service Provider (ISP) licence to offer broadband wireless services in four telecom circles.

The came even as DoT was contemplating referring the company’s first letter, dated September 9, to the law ministry. In that letter, Qualcomm had accepted, after discussions with DoT, to take one instead of four ISP licences.

Qualcomm had argued that this would entail merging its four companies in India into one entity. Qualcomm had set up these four companies to provide BWA services in the circles of Delhi, Kerala, Mumbai and Haryana. DoT officials said no letter had been sent to the company cancelling the licence. “We are looking into the issue, as they have invested a lot of money. A final decision will be taken based on the provisions of the licence policy and also taking into consideration their viewpoint,” said a senior DoT official.

Qualcomm forked out $1 billion to win four BWA licences and received a letter of intent on July 13 last year. One key bone of contention, DoT says, is that the company did not apply for an ISP licence within three months through their locally incorporated companies. This, DoT said, in violation of the licence terms. Qualcomm denied these charges and said the locally incorporated companies applied for an ISP licence on August 2010, well within the three-month window. .

The US company had been told by DoT in November 2010 that some more information was needed to process the applications and it wanted these companies to give proof of being Qualcomm Inc nominees. Qualcomm Inc gave a letter on December 20, 2010, confirming the nominations of these companies which filed for the licence. DoT refers to this as 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.

DoT told Qualcomm it should have informed about the nomination of the local companies first, before they applied for an ISP licence, and should have only applied for one license instead of four, again a breach of the terms. Qualcomm challenged DoT’s interpretation, saying the Notice of Inviting Auctions did not at any place require that process, and since the BWA auctions were one for each service area, rather than pan-India, four licenses were required to be applied for. As a compromise, Qualcomm wrote back to DoT on September 9, agreeing to DoT’s interpretation of living with only one licence.