Indian telecom companies charged in spectrum deal

The charges relate to spectrum allocations to the mobile operators in 2002

Bharti Airtel and the Indian venture of Vodafone Group were charged Friday by India's top investigation agency for the alleged irregular allocation of mobile spectrum in 2002.

The charges against the two largest mobile operators in the country by the Central Bureau of Investigation (CBI) continues India's investigation into alleged corruption in the allotment of government-owned spectrum to the country's telecom sector.

A. Raja, the country's telecom minister up to November, 2010, and some executives were charged and arrested in 2011 for allegedly improper allocations of 2G licenses and spectrum at basement prices in 2008. The allotment of 122 mobile licenses across 22 service areas in 2008 was struck down in February this year by India's Supreme Court, affecting the Indian joint ventures of multinational companies like Telenor, Etisalat, and Sistema. The spectrum was auctioned again in November.

Irregular allocations to some Indian operators of 2G licenses and spectrum in 2008 may have cost the country about US$39 billion, according to a report by the Comptroller and Auditor General of India (CAG) that was presented to Parliament in November, 2010.

The Supreme Court had advised the CBI, which was investigating charges against Raja, to also investigate mobile spectrum and license allocations dating back to 2001 when a different coalition, the National Democratic Alliance, was in power.

Bharti Airtel said it did not have a comment on the CBI action. Vodafone did not immediately respond to a request for comment.

Vodafone was not an investor in the Indian joint venture in 2002. Its first investment in the joint venture Vodafone Essar was in 2007, when it acquired, both directly and indirectly through India partners, a 67 percent stake from Hutchison Telecommunications. It subsequently bought out Indian partner Essar Group.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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Tags governmentregulationlegaltelecommunicationCarriersVodafone GroupCriminalBharti Airtel

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John Ribeiro

IDG News Service
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