Auditor’s office criticises DoT over auctions

30 Jul 2013

India’s Comptroller and Auditor General (CAG) has accused the government of allowing Videocon, Sistema Shyam TeleServices (SSTL) and Idea Cellular undue benefit of around INR38 billion (USD639.1 million) in the most recent spectrum auctions, by allowing the cellcos to offset their bids by the amount they paid for the original licences in January 2008. The Hindustan Times cites an internal Department of Telecommunication (DoT) memo as saying that the trio were wrongly freed from paying INR16.26 billion (SSTL), INR15.07 billion (Videocon) and INR6.85 billion (Idea Cellular). As noted by TeleGeography’s GlobalComms Database, the three operators had their licences revoked by the Supreme Court’s February 2012 order and repurchased their concessions in the subsequent November 2012 and March 2013 auctions. Rapidly declining confidence in the regulation of the sector, combined with high reserve prices for the spectrum deterred participation in the tender, and the few providers that entered the auction were conservative in their bidding. In a bid to improve confidence in the segment and encourage participation in future sales, the DoT acquiesced to requests that cellcos be allowed to deduct the price paid for their cancelled licences from their new purchases.