ByCell gets security clearance for investments in India

NEW DELHI: Switzerland-registered telecom company ByCell has got the security clearance from the Home Ministry for its investments in India. Following the clearance, the Foreign Investment Promotion Board (FIPB) on Friday cleared the company’s proposal to apply for telecom licences in 17 circles in the country.

The company already has FIPB clearance to invest in the remaining five circles. This implies ByCell now has the requisite clearances to invest in communication services anywhere in the country. FIPB clearance also implies that ByCell will now get letter of intent (LoI) from the Department of Telecom (DoT) for the five telecom circles spread across 13 circles, where it had applied for licenses before the September 25 cut off date.

Last week, even as other new entrants were issued LoIs, DoT had put the ByCell application on hold because the company had not obtained the requisite security clearance. This came as a major blow to ByCell, which was heading the queue for licences. While protesting against the DoT move, ByCell said security clearances were held up due to “certain false complaints filed in the name of a Member of Parliament with the PMO in October 2007”.

The company also produced documentary proof to show that the same MP had clarified that his letter was a forged document and he had no complaints against ByCell. The company also said that it should have been given LoIs in the five circles (spread across 13 states) where it had received FIPB clearance to launch services as early as January, 2006.

Under the existing first-come-first-served policy, the priority for licences ensures the same priority in the spectrum queue. However, last week, when issuing LoIs, DoT made a sudden change in policy and said that the order of allocation of radio frequencies will be based on the order in which the companies make the payment.

Put simply, the companies that make the payment first will head the new queue for spectrum allocation. This implies, ByCell whose LoIs have been on hold due to the security issue, losses out as its payment for the licenses comes in after the other players. ET has learnt that ByCell has already met the communications minister on this issue and has sought that the government respect the seniority of applicants, especially considering that its application was held up on account of a ‘fake complaint’.