Etisalat steadfast on India plans

DELHI | MUMBAI: Dubai-based Etisalat Telecommunications has said it is "deeply committed to India and here to stay", a day after the vice-chairman of its operations here, Sahid Balwa, was arrested by the Central Bureau of Investigation in connection with the 2G spectrum scam.

Etisalat, the Arab world's second largest telecom company by market value, entered the Indian market in 2008 after buying a 45% holding in DB Realty-promoted Swan Telecom for $900 million. It offers services under the 'Cheers' brand, and despite claiming to have launched operations in 14 of the 15 circles it has permits for, the company has failed to make any impact in the crowded telecom market in India.


Besides Etisalat DB Telecom, the India unit of the UAE-based company, is fighting several fires and may also lose its mobile permits. In December 2010, Etisalat DB had received notices from the Indian government for alleged failure to rollout mobile services on time.


Comptroller and Auditor General in a recent report said that several of the new entrants that got mobile licences in 2008, including Etisalat (then Swan Telecom), were not eligible for it.


Earlier this week, the CBI arrested Balwa accusing him of criminal conspiracy and acting with misconduct with regard to obtaining mobile permits in 2008. The CBI believes that DB Realty was one of the beneficiaries who had prior information about the policy change allowing it to jump the queue for mobile permits and airwaves.


The agency is also probing whether Anil Ambani-promoted RCOM had more than a 10% stake in the company when it applied for mobile permits, in violation of existing laws. RCOM said that it sold its stake in Swan in December 2007 before the company had received mobile permits. The UAE-based firm has clarified that it had no role in the alleged scam and said that its investments in India took place entirely after Swan had bagged licences for 15 service areas.


"Etisalat had no involvement whatsoever in the UAS licence application process: it is a subsequent external investor, who entered the Indian market bringing its international expertise and resources, which purchased its stake in the company on the bona fide belief that the licences have been validly granted," the company said.


It has also clarified that it always operated within laws of the countries it was present in and would fully cooperate with the Indian authorities if approached.


Etisalat maintains its intent to participate in the Indian telecom sector. "We have committed about $800 million with different vendors for networks, signed a $2-billion deal for towers over 10 years and also have a $400-million deal with Tech Mahindra for IT. We also have about 3,000 employees in India and all of this shows the seriousness of our commitment," Omran had said.

The company reiterated in an e-mail, "We are fully prepared to commit our resources to ensure that the government's vision for India's telecommunications sector is fully realised and that we help to extend the reach of all."