COAI sees proxies in licence rush
Cellular Operators’ Association of India (COAI), the GSM operators’ body, has written to the government to strictly enforce licence conditions.
By TNN |
NEW DELHI: Concerned that new prospective telecom licensees could be circumventing telecom policy and licence restrictions, Cellular Operators’ Association of India (COAI), the GSM operators’ body, has written to the government to strictly enforce licence conditions.
About 160 applications have already come in for new unified access service (UAS) licences and many more are expected to be filed this week. COAI said it is concerned that some of these applications may be a means of circumventing licence norms, including cross-holding restrictions.
“There has been a flood of applications recently for the scarce resource of spectrum. We are concerned that these companies, which have no telecom background or are unheard of, are actually proxies for established telcos,” COAI director general TV Ramachandran said.
In a letter to telecom secretary DS Mathur, COAI has asked the department of telecom (DoT) to lift the corporate veil and find out where the real ownership or control of the company lies. “We submit that for all licences and applications, the corporate veil has to be lifted to determine the economic entity or promoter group that is the real beneficiary. License conditions cannot be circumvented by means of separate corporate personalities of individual members,” COAI said in its communication.
The UAS licence norms prevent any single entity, either directly or through its associates, from holding over 10% stake in more than one licensee company in a particular service area. Any promoter company/ legal person can also not hold stake in more than one licensee company for the same service area.
ET had on Monday reported that DoT has put new UAS licence applications under scanner in a bid to establish the real identities of the applicants. Sources said although basic details had already been provided in the applications, a closer scrutiny of the licences was being done to establish if any crossholding patterns existed.
The initiative was triggered by the fact that the shareholding pattern and the promoter details in some applications were not clear, including proposals by companies like Bycell, Swan, Cheetah, S Tel, Datacom Solutions and Alliance Infratech.
About 160 applications have already come in for new unified access service (UAS) licences and many more are expected to be filed this week. COAI said it is concerned that some of these applications may be a means of circumventing licence norms, including cross-holding restrictions.
“There has been a flood of applications recently for the scarce resource of spectrum. We are concerned that these companies, which have no telecom background or are unheard of, are actually proxies for established telcos,” COAI director general TV Ramachandran said.
In a letter to telecom secretary DS Mathur, COAI has asked the department of telecom (DoT) to lift the corporate veil and find out where the real ownership or control of the company lies. “We submit that for all licences and applications, the corporate veil has to be lifted to determine the economic entity or promoter group that is the real beneficiary. License conditions cannot be circumvented by means of separate corporate personalities of individual members,” COAI said in its communication.
The UAS licence norms prevent any single entity, either directly or through its associates, from holding over 10% stake in more than one licensee company in a particular service area. Any promoter company/ legal person can also not hold stake in more than one licensee company for the same service area.
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“With eight operators in most telecom circles, what business case does it make for the ninth or tenth operator who would be a late starter in the market? It is evident that these are not serious players,” Mr Ramachandran said.ET had on Monday reported that DoT has put new UAS licence applications under scanner in a bid to establish the real identities of the applicants. Sources said although basic details had already been provided in the applications, a closer scrutiny of the licences was being done to establish if any crossholding patterns existed.
The initiative was triggered by the fact that the shareholding pattern and the promoter details in some applications were not clear, including proposals by companies like Bycell, Swan, Cheetah, S Tel, Datacom Solutions and Alliance Infratech.
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