Bycell Can't Start Telecom Service: Govt

[savramesh 37]

Source

NEW DELHI: The government, in an unprecedented move, has withdrawn its approval to Swiss-registered firm ByCell to launch telecom services in India on the ground of security concerns.

Promoted by Russian businessmen, ByCell holds 74% stake in an Indian telecom company, Hyderabad-based Jayalakshmi Group. The joint venture between the two group was announced in 2006.

ByCell had got approval to operate in 13 circles including Assam, Bihar, north-eastern states, Orissa and West Bengal, but the Department of Telecom (DoT) had withheld its licence because of the security reason. In 2006, it had received FIPB approval to invest Rs 500 crore.

In fact, FIPB had given By-Cell approval twice to invest in India, but the DoT refused to give it licence on the ground of security threat. A senior government official said that the home ministry had expressed security reasons on the basis of the antecedents of ByCell's main promoters.

The government is also not happy about the ByCell's shareholding structure and its source of funding, a source said. In 2006, ByCell secured FIPB approval to launch mobile services in five circles. The company, in fact, got a letter of intent for launching its services in Assam, Bihar, Northeastern states, orissa and West Bengal. But, the government refused to issue licence to operate in those circles.

In 2008, the company moved to court to obtain licence to operate in the country as it had paid the licence fees and other charges to the government. On the direction of the court, it received licence from DOT to start its services in India.

Meanwhile, it also received clearances from the home ministry. On the basis of this, the company decided to invest $500 million. But again, the home ministry received certain information against the company, which forced it to ask FIPB to revoke all the clearances granted to it so far.

Besides revoking all the investments permission granted to ByCell, FIPB on Friday deferred Unitech Wireless's proposal to hike the foreign stake in the firm up to 74%. Norway-based Telenor is the foreign partner in Unitech Wireless. As security concerns have been expressed on Telenor as it has operations in Pakistan and other countries, the government is not comfortable in allowing its stake in the company from the existing 49% to 74%.

The board, however, cleared 16 foriegn direct investment proposals worth Rs 892 crore, most of which will be for a hydro power project in Sikkim. On the recommendations of the FIPB, the government also deferred 13 proposals, including that of Vijay Mallya-promoted United Breweries request to raise Rs 708 crore through convertible warrants.

Among cleared proposals, Teesta Urja will bring in Rs 547.20 crore for developing 1,200-MW hydro power project in Sikkim. The government also allowed IL&FS Trust Company to hold two per cent stake in Multi Commodity Exchange of India, that will bring in Rs 108 crore of FDI.