India to send 85 notices to telcos

The Indian government will send 85 notices to telecom operators questioning their licenses, the new telecoms minister said on Monday, the latest move in a telecom corruption scam that has paralyzed India's parliament.

Kapil Sibal took the top spot in India's telecom ministry earlier this month after Andimuthu Raja was forced to resign, accused of granting 2G spectrum and licenses at low prices and, according to an official watchdog unit, possibly costing the state $39 billion in revenue.

Speaking to reporters at a press conference on Monday, Sibal said many of the companies, which went through a self-certification process, were not eligible for the 2G licenses granted in 2007 and 2008.

"This has serious implications for transparency of process," Sibal said. "It allows companies to get ahead of the queue on basis of first come first served, in that they did not register first with the registrar of companies," he said.

Notices will be sent to the companies mentioned in a report by the Indian government auditor, Sibal said.

That report named Uninor, a unit jointly owned by Unitech and Norway's Telenor, Etisalat DB Telecom, into which Swan Telecom and Allianz Infratech later merged, Loop Telecom, Videocon Telecommunications and S Tel.

Sibal said the companies would have 60 days to reply and 52 weeks to fulfill rollout obligations, failing which their licenses could be revoked.

Uninor said it would issue a statement later. S Tel and Videocon could not be immediately reached for comment. Loop declined comment.

"Once the company receives the show cause notice, we will seek legal counsel and respond to the notice," a senior executive at Etisalat DB said on condition of anonymity, adding the company was fully compliant with its licenses and had fulfilled its minimum rollout obligations.

Last week, the Supreme Court criticized Prime Minister Manmohan Singh for his apparent delay in probing the widening scandal, potentially one of the biggest to hit India.

The government has resisted additional probes, saying a CBI investigation is under way. The scandal has now engulfed parliament as opposition parties have kept it shut since November 9 over demands for a full parliamentary investigation.

Sibal said he did not expect foreign interest in the telecom sector to be affected by the probe.