India watchdog urges scrapping of telecom licences

New Delhi,December 11, 2010m (AFP): India's telecom watchdog has called for the licences of operators caught up in what could be the country's largest corruption scandal to be cancelled, a statement said Saturday.

The proposal to cancel 38 permits came as the government reeled under fierce attacks from opposition parties for the way second-generation (2G) licences and radio bandwidth were awarded two years ago.

The firms affected by the recommendation include the Indian joint ventures of Norway's telecommunications giant Telenor and Emirates Telecommunications Corp, junior communications minister Sachin Pilot said in a statement.

The Telecom Regulatory Authority of India, or TRAI, has also recommended the cancellation of 31 more licences including a joint venture of Russia's Sistema investment holding company but only after a further legal examination.

The Congress-led government plans to "take necessary action after verification of data and after taking legal notice," Pilot said in the statement posted on a government web site.

The regulator's recommendations are not binding on India's telecommunications ministry, which holds the power to cancel the licences.

Telenor has already denied that that there were any "irregularities" in the way its subsidiary Indian Uninor won mobile licences. There was no immediate public comment from other companies.

The sale of 157 licences at rock bottom rates in 2008 is estimated to have deprived the treasury of as much as 40 billion dollars in revenues, according to the federal auditor.

The licence applications of many firms should have been turned down because they did not satisfy "the basic eligibility conditions" set by the department of telecommunications, the auditor's report said last month.

The firms "suppressed facts, disclosed incomplete information and submitted fictitious documents" for getting licences, the auditor said.

The corruption allegations, which forced the resignation of telecom minister A. Raja, have put a black mark on India's "telecom revolution", which has made the nation the fastest-growing global mobile market with 700 million users.