Critical.
Authoritative.
Strategic.
Subscribe to CIO Magazine »

Etisalat distances itself from Indian mobile license scam

The company says it invested in the Indian company after second-generation mobile network licenses were allotted

Telecommunications operator Etisalat has distanced itself from an alleged scam in the allocation of second-generation (2G) mobile network licenses in India, after an Indian agency arrested a key executive of its Indian joint venture.

Earlier on Wednesday, a spokesman of the Central Bureau of Investigation (CBI), which is investigating the scam, said it had arrested Shahid Balwa, vice chairman of the joint venture, Etisalat DB Telecom.

The irregular allocation of 2G licenses and spectrum in 2008 to some Indian operators may have cost the country about US$39 billion, the Comptroller and Auditor General of India (CAG) said in a report that was presented in India's Parliament in November. Former communications minister A. Raja and two civil servants were arrested last week.

Balwa is managing director of DB Realty, which founded Swan Telecom and later sold a 45 percent stake to Etisalat. The company was subsequently renamed Etisalat DB Telecom.

DB Realty said in a filing to the Bombay Stock Exchange on Wednesday that Balwa was wrongly implicated in the investigations into the 2G licenses.

The CAG report said that some companies including Swan Telecom had benefited from the irregular allotment of 2G licenses and spectrum in early 2008.

Etisalat said Wednesday that it acquired its stake in December 2008, after Swan had applied for and obtained 15 licenses. Etisalat had no involvement whatsoever in the license application process, and purchased its stake in the company in the belief that the licenses had been validly granted, it said.

The company said that it always operates within the laws of the countries in which it functions, and will cooperate fully with the Indian authorities if approached. The company said it was "here to stay" and deeply committed to India.

The Indian government faced allegations this week of another spectrum scam, this time by Antrix, the commercial arm of Indian Space Research Organization (ISRO), which entered into an agreement in 2005 with a start-up in Bangalore to provide S-band spectrum from Indian satellites.

The CAG is said to have questioned that an agreement was reached over allocation of spectrum without an auction, which was also a question it raised about the 2G licenses by the Department of Telecommunications in 2008.

Officials of the Department of Space said late Tuesday that it had in fact decided to cancel the agreement in July last year, as it was decided that there were other high-priority and strategic requirements for the spectrum. The actual termination of the agreement may take some time, because of the complexity of the procedures involved, they said.

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

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

More about: Auditor General, etwork, IDG
References show all

Comments

Post new comment

The content of this field is kept private and will not be shown publicly.
Users posting comments agree to the CIO comments policy.
Login or register to link comments to your user profile, or you may also post a comment without being logged in.
Related Coverage
Related Whitepapers
Latest Stories
Community Comments
Tags: Etisalat, Swan Telecom, government, Regulation, Telecommunication, telephony
Latest Blog Posts
Whitepapers
  • Best Practices for Oracle License Management: Optimise Usage and Minimise Audit Liability
    With Oracle audits on the rise, organisations that can best align license agreements with actual database and option usage can reduce their financial risk and maximise the value of their Oracle investments. The goal is to “right-size” Oracle across the enterprise and gain control over the entire license management process – from accurate needs projections and licensing negotiations, to deployments and audit preparation. Read on.
    Learn more »
  • Sun Blade 6000 Modular System: Power and Cooling Efficiency
    Most IT organizations are struggling with the need to deploy ever more applications in the fixed space, power, and cooling envelope of their data centers, the ability to save even a hundred watts per system quickly turns into more breathing room for future applications and the servers to run them. Read on.
    Learn more »
  • SOA and Business Processes: Making the Connection
    Service-Oriented Architecture (SOA) is also complex, and one of its main characteristics is that an SOA system is comprised of multiple applications that are combined to accomplish critical business processes. Discussions of SOA can quickly grow so complex that the system’s main benefits to an organization are difficult to fully understand. This article discusses SOA Suite 11g, a family of products that take SOA to a new level and correct some of the problems caused by the very combination of components and multiplication of languages that make SOA a flexible, agile system.
    Learn more »
All whitepapers
rhs_login_lockGet exclusive access to Invitation only events CIO, reports & analysis.
Recent comments