CBI examining SC order directing FIR against telcos: Srcs

[Avnish Jolly]

CBI examining SC order directing FIR against telcos: Srcs
http://www.moneycontrol.com/news/cnbc-tv18-comments/cbi-examining-sc-order-directing-fir-against-telcos-srcs_506126.html

Published on Mon, Dec 20, 2010

The Central Bureau of Investigation (CBI) is learnt to be examining
the Supreme Court order directing it to file an FIR against telecom
companies from 2001 to 2006. CNBC-TV18’s Siddharth Zarabi reports.

This is going to be a major development if it fructifies. We learn
from our sources that last week the Supreme Court has directed the CBI
to file FIRs against all telecom providers from the period 2001
onwards till 2006. Remember, all the licenses issues after 2008 are
already subject to multiple probes including by the CBI and the
Enforcement Directorate (ED) among other.

This order of the Supreme Court is being examined by the CBI. We have
confirmed with CBI officials that they are currently studying this
order—examining it legally in-house and if need be, they will also
consult with the law ministry.

Clearly, this is going to be a huge step if it is taken. It will have
massive ramifications for the telecom sector for the investor
sentiment overall for also possible foreign investment future plans of
all the domestic operators because clearly it extends the entire noise
about telecom licenses—the allegations of corruption, the alleged
award of licenses in 2008 without due process being followed to 2001.
Remember, 2001 was the time when India’s telecom growth started.

In 2001, we are still in the low millions, possibly a number of 13
million to 14 million subscribers put together after six to seven
years of licenses having being awarded in the mid-90s. From 2001 we
saw massive rounds of expansion in the telecom industry. We saw
companies like Bharti becoming national operators, we saw there advent
of wireless in local loop limited mobility, which was ultimately
through a government decision of the National Democratic Alliance
(NDA), converted into a full-fledged UASL license. We saw decisions to
reduce the license fee and we also saw parallel—a fast up take in
growth. We also saw something called the calling party place principle
coming fully into effect due to previous decisions.

Clearly, the 2001 to 2006 period was the sunny phase of India’s
telecom growth story and from 2006 onwards the bigger players became
bigger. We had newer players come in but they clearly haven’t bitten
into the market in that manner. But 2001 to 2006 was the big time for
Indian telecom to say and therefore if FIRs are going to be
registered, clearly, the sense that it will send out is possibly going
to be negative.

Remember the FIRs for the 2008 scam are specific. They name certain
companies. They talk about individual wrong doing. They also name DoT
officials. There is a possibility of a charge sheet being filed
against the then telecom minister A Raja along with his crucial and
key aids. But to get a FIR against all telecom operators—and remember
there are 14 of them in this country—would send out massive signals.
We don’t know when CBI will finally take a call on doing this.