Indian government hit by new telecom scandals

New Delhi,8 February 2011,(Reuters): India is probing two new cases involving the allocation of telecoms spectrum, increasing the pressure on the government already hit by a graft scandal, media reported on Tuesday.

The granting of free broadband rights by a state-run telecom firm and the allocation of internet spectrum by India's space ministry, which Singh oversees, has raised questions of a government already grappling with a $39 billion telecoms scandal.

Singh's ruling Congress party-led coalition government has seen its term tarnished by a string of corruption scams that have paralysed parliament, led to the sacking of a minister, and eroded public confidence in the prime minister and his party.

The Indian Space Research Organisation (ISRO), overseen by the ministry of space, is being probed by the government auditor for a 2005 allocation of mobile internet spectrum without a proper bidding process that may have cost the exchequer up to 2 trillion rupees ($44.2 billion), the Times of India reported.

The ISRO was not immediately available for comment on the reports.

The government on Monday moved to cancel ISRO's allocation of lucrative S-band telecoms spectrum, able to provide 4G broadband internet services to India's rapidly-expanding mobile phone market, to private company Devas Multimedia, Mail Today reported.

ISRO had told Department of Telecommunications last year that it would cancel the contract with Devas Multimedia if there was any violation of norms, The Hindu Businessline reported.

"The department wishes to clarify that the agreement entered into by Antrix (in a joint venture with Devas)... is already under review... A decision on the matter is likely to be taken soon," a Department of Space statement was reported as saying.

India is also probing whether state-run telecom firm Bharat Sanchar Nigam Ltd (BSNL) appointed franchises for broadband wireless access without charging any upfront payment, the Hindustan Times newspaper reported, citing a note from the Telecoms minister.

BSNL had appointed franchises on a revenue-share basis, even after paying 80 billion rupees ($1.77 billion).

"It has been pointed out that 'cheap access' has been provided to these franchisees by BSNL, including costly broadband wireless access spectrum in metropolitan cities for which BSNL has already made massive upfront payment," Telecoms Minster Kapil Sibal was reported as writing in a note to the Department of Telecom secretary.

BSNL chairman Gopal Das declined to comment when contacted by Reuters, saying he has not seen the newspaper report.