India’s Department of Telecommunications (DoT) has reportedly cancelled the mobile network operator licences awarded to Russian-owned, Swiss-registered ByCell, according to the Calcutta Telegraph. It is understood that the regulator has rescinded the licences awarded to ByCell allowing it to launch services in five circles; Assam, Orissa, Bihar, North East and West Bengal. The DoT has argued that its decision to revoke the licence has been made on the grounds of security concerns, and as noted in a letter from the regulator to ByCell’s CEO: ‘The five letters of intent (LoI) are hereby withdrawn as the security clearance and all the Foreign Investment Promotion Board (FIPB) approvals granted to the company have been withdrawn.’ The DoT has stated that it will refund the entry fee and performance guarantee that the operator paid as part of its concession award, totalling INR860 million (USD19.33 million).
The announcement follows reports in May 2009 that the FIPB had withdrawn approval for ByCell to roll out a GSM network on the back of renewed security concerns after calls by the revenue department and the Ministry of Home Affairs to review the operator’s application. Both government bodies had expressed concerns over the shareholding structure of ByCell, as well as questioning the company’s source of funding.