FIPB revokes clearance for ByCell GSM launch

19 May 2009

India’s Foreign Investment Promotion Board (FIPB) has withdrawn approval for Russian-owned, Swiss-registered ByCell to roll out a GSM network on the back of renewed security concerns, reports the Economic Times. It is understood that the FIPB revoked its permission, granted back in February 2008, after calls by the revenue department and the ministry of home affairs to review ByCell’s application. However, ByCell CEO Alexandre Louzine is quoted as saying that the company had not received any such notification from the FIPB, noting: ‘If such a decision has been made, it is a big mistake. It will damage the image of India and hurt the flow of foreign investment into the country. It is not a simple thing to withdraw clearances, especially after we have made considerable investments here. Besides, the Indian government has also collected fees from us for our telecom licence.’

Whilst the FIPB had previously cleared ByCell’s application twice over the past two years, the government held up the formal issue of licences to the company. ByCell holds a letter of intent to invest INR5 billion to launch GSM-based services in five circles, and in February 2008 was cleared to apply for licences in the remaining circles. However, the Department of Telecommunications (DoT) has withheld ByCell’s licences for the past 15 months, claiming a lack of formal clearance from the FIPB. Subsequently the FIPB reiterated the clearance of the cellco’s applications earlier this year after it had approached the courts, alleging that its licences were being withheld despite the DoT approving its application, collecting payments, bank guarantees and even issuing letters of intent in early-2008.