COAI backs Qualcomm over BWA permit

Writes to telecom ministry, says revoking licence will set a bad precedent.

The Cellular Operators Association of India (COAI) has said cancelling Qualcomm’s licence for broadband wireless access (BWA) would “serve only to unsettle key players tasked with rolling out broadband services”.

In a letter to Communications Minister Kapil Sibal on Friday, COAI also said the decision to cancel Qualcomm’s licence, if implemented, will “only lead to a loss of an important player and will further lead to investment losses” in India.

The decision of the apex association for GSM operators to back member company Qualcomm comes days after the Department of Telecommunications (DoT) told the company on Monday that its licence to operate BWA services was being revoked. The telco had paid $1 billion for licences in four circles. Qualcomm has also contended DoT’s claim that the application for the ISP licence did not come within the stipulated three months.

In the letter, COAI Director General Rajan S Mathews said the move “roils an industry which is already reeling under the challenges of low profitability, liquidity, the drying out of domestic bank lending and declines in foreign direct investment”.

He said it would have been great encouragement to the industry if such “adminstrative matters” could have been resolved by direct interaction with the concerned party in a time-bound manner.

COAI said it would request the DoT to work with Qualcomm to provide the necessary guidance and administrative clarity in a timely manner rather than cancelling the ISP application of the company.

Under the LoI given in July, Qualcomm was directed by DoT to apply for the relevant licence (ISP licence) within three months. DoT said the company could not meet the deadline. and had flouted rules while applying for four ISP licences, where it was required to nominate only one company to apply for a ‘Category ‘A’All India ISP licence’.

Official said the company's acceptance on September 9 of a compromise in which they were willing to apply for one instead of four licences by merging the companies came only after a decision was taken to reject the ISP applications.

Qualcomm had paid $1 billion (Rs 4,600 crore) to win the four BWA licences and received a letter of intent in July 2010.

It denied the charge of not having applied within three months and said its locally incorporated companies applied for an ISP licence on August 9, 2010, well within the three-month window.