The government auditor has pointed out that Mukesh Ambani’s Reliance Jio Infocomm (RJio) got an advantage of ₹3,367.29 crore as a result of Department of Telecom’s decision to allow the company to offer voice telephony by migrating to unified licence.

In its performance audit report of the Ministry of Communications and Information Technology tabled in the Lok Sabha on Friday, the Comptroller & Auditor General said the company got the advantage due to non-accounting of time value of money. RJio is expected to launch services this year.

Reliance Industries had acquired Infotel Broadband in 2010, which had won pan-India wireless access spectrum in auctions. However, the company had initially acquired an Internet service providers licence, under which it can offer only data services. In 2013, the DoT introduced the new unified licence regime allowing internet companies to migrate to full fledged telecom operator by paying an entry fee of ₹1,658 crore. CAG has raised concerns now because this fee was based on the price discovered in 2001.

However, Reliance in a statement said that it had got ‘no favour’ and the company has always conducted its business as per the prevailing laws and abided by the rules and regulations prescribed by the DoT and other regulatory authorities.

“We have acquired our spectrum at market price through open and transparent bidding processes, on conditions which were same for all bidders. Further, the DoT rules for procuring the relevant licence for services using BWA spectrum too were the same for all successful bidders,” a spokesperson at Reliance Jio said.

Defended by DoT DoT had earlier defended its decision to allow Reliance Jio to migrate to unified licence regime by saying that no favour has been shown to any specific player. According to the department, the fee of ₹1,658 crore collected from Reliance Jio was not for broadband spectrum but as an entry fee to migrate to unified licence regime. As per the spectrum auction rules in 2010, companies were permitted to use their spectrum to provide services that are allowed under the licence held by them. Infotel Broadband was granted only the ISP licence, which did not provide for voice calling facility.

Therefore, CAG said the auction rules suffered from deficiencies such as absence of financial parameters in the eligibility criteria for bidders, absence of lock-in provision, disparity in scope of usage of BWA spectrum and lack of intermediate milestones in roll out targets.

It also said that Infotel had outbid most of the telecom operators, which could have provided voice services in addition to data in the BWA spectrum auction held in 2010.

The decision to grant permission to an ISP licensee with BWA spectrum to operate in the voice telephony space helped the ISP circumvent the restrictions imposed by their licence at the time of auction, which were known to ISP at the time of bidding for BWA spectrum.

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