A report released by Comptroller and Auditor General of India on Communication and IT highlights various findings out of the performance and compliance audit of Department of Telecommunication (DoT)
Two key points involving Reliance Jio Infocomm include it getting an undue benefit of Rs33.67bn when migrating to Unified License (UL) and lack of diligence by the DoT in the auction of BWA Spectrum.
Firstly, the report highlights that the BWA auction NIA did not include financial parameters such as net worth, lack of intermediate roll-out milestones and fixation of lower rate of spectrum usage @ 1 per cent of AGR. The DoT did not consider the potential of BWA technology to provide voice services, the report said. Secondly, RJio paid the UL entry fee of Rs0.15bn and an additional migration fee of Rs16.58bn in August 2013. The fee of Rs16.58bn was discovered in 2001, and, assuming inflation, the value of the license would have been at least Rs50.25bn.
In our view, both these issues existed for all the operators. The NIA was open to all bidders, and all the operators bid accordingly. Moreover, the pricing of Rs16.58bn for migration to UL by ISP-holding BWA spectrum still exists. More importantly, the real valuable asset, i.e., spectrum, is priced at market determined levels.