Undue gain of Rs 3,367 cr to RJio, Rs 499 cr to Airtel: CAG

The CAG today rapped the Telecom Ministry for giving Mukesh Ambani-led Reliance Jio Infocomm undue benefit of over Rs 3,367 crore by allowing it to provide voice calling on broadband spectrum, a charge the company vehemently denied.

Infotel, an internet service provider (ISP), had in 2010 outbid most of the telecom operators to bag BWA spectrum under a licence that did not permit voice services. The firm later was acquired by Reliance Industries and renamed it Reliance Jio.

The Comptroller and Auditor General (CAG) in its report tabled in Parliament today said Reliance Jio was the first firm to seek a universal licence (UL) for voice services after the government permitted ISP licencees to migrate to UL.

Reliance Jio Infocomm paid UL entry fee of Rs 15 crore and additional migration fee of Rs 1,658 crore in August 2013.

"The entry fee of Rs 1,658.57 crore was discovered in 2011 through the bidding for the 4th Cellular Licenses and tis price did not reflect the present value as on August 2013. Taking into account the cost inflation in the economy for the period from 2011 to 2013 the value of licence would have been at least Rs 5,025.29 crore," CAG said.

This migration resulted in undue advantage of Rs 3,367.29 crore to Reliance Jio, it said.
"Reliance Jio Infocomm Limited (formerly, Infotel)... paid UL entry fee of Rs 15 crore and additional migration fee of Rs 1,658 crore in August 2013. This migration, allowed at prices discovered in 2001, resulted in undue advantage of Rs 3,367.29 crore to Reliance Jio Infocomm," it said.

Stating that "no favour" was given to it, Reliance Jio said, "We have always conducted our business as per the prevailing laws and have abided by the rules and regulations prescribed by the Department of Telecom (DoT) and other regulatory authorities."

"We have acquired all our spectrum at market prices through open and transparent bidding processes, the conditions for which were same for all bidders. Further, the DoT rules for procuring the relevant licence for services using BWA spectrum too were the same for all successful bidders," it said.

The CAG report also said Bharti Airtel made an undue gain of Rs 499 crore because of Department of Telecom's decision to merge Chennai telecom circle with Tamil Nadu in a hasty manner in 2005.