Solicitor-General backs DoT on spectrum allocation to RJio

The Solicitor-General has backed the Department of Telecom’s stand on allocating broadband spectrum to Reliance Jio.

In an opinion given to the DoT, the Solicitor General has also supported DoT’s move to allow Reliance Jio to migrate its Internet service licence to a unified telecom licence. The Comptroller and Auditor General had raised concerns on both these decisions of the DoT.

The CAG, in a draft report, had said it was surprising that the Government did not satisfy itself as to how Infotel Broadband, a company with a networth of ₹2.5 crore, would be able to pay the bid amount of ₹12,847 crore. The auditor said eligibility conditions for the auction were not stringent enough to keep out “front companies”.

It also said that though Reliance acquired Infotel Broadband on June 11, 2010, a few hours after the close of the auction, the Government did not raise a red flag on possible violation of confidentiality conditions by Infotel. The SG has opined that there are several ways by which funds can be raised even when small companies, particularly if a strong business case and potential revenue stream can be demonstrated to a lender. “No occasion can therefore be said to have arisen for DoT to enquire into the transaction between Infotel Broadband and Reliance Industries unless there was any complaint,” the SG opined.

The Department of Telecom had earlier asked the Comptroller and Auditor General to drop the audit relating to Government’s decision to allocate broadband spectrum to Reliance Jio. The DoT has said that it gave a presentation to the CAG before the spectrum auction in 2010 and allegations being made now were not raised then. Reliance Jio, a subsidiary of the Mukesh Ambani-led Reliance Industries, acquired Infotel Broadband Services in June 2010, soon after the firm won nationwide broadband spectrum, spending nearly ₹13,000 crore. Infotel had acquired an ISP licence, under which voice telephony is not permitted.

The CAG had also rejected the telecom department’s stand allowing Reliance Jio to offer voice services using broadband spectrum. The CAG, in its draft report, has said that had the DoT made it clear that voice service was permitted, there would have been more demand for spectrum during the auctions held in 2010. Broadband spectrum had been sold at a fraction of the price of 3G spectrum. The auditor said that going by the value telcos paid for spectrum between 2012 and 2014, RJio appeared to have been accorded undue advantage of ₹22,842 crore.