The award of spectrum to a small ISP subsequently acquired by Reliance Industries should be cancelled, suggested a draft report by India’s Comptroller and Auditor General (CAG) quoted in an Economic Times report.
The CAG said the Department of Telecommunications should have smelt something was wrong and picked up “the tell-tale sign of rigging of the auction right from the beginning” of the process, alleged the report.
Virtually unknown ISP Infotel Broadband won spectrum across India by paying 5,000 times its net worth in the auction.
However, within hours of grabbing the haul of radio frequencies, the ISP was acquired by Reliance Industries. The outfit was subsequently renamed as Reliance Jio Infocomm, which is now set for a major launch in 2015 of 4G services.
CAG’s draft report said there was evidence which indicated Infotel had colluded and shared confidential information with a third-party in violation of the auction’s rules and conditions.
The allegations were rejected by Reliance, which said it acquired spectrum in a transparent bidding process supervised by the Indian government.
The company also pointed out that the BWA spectrum was highly competitive, as seen from the final bid prices which were more than six times the reserve price for the pan-India spectrum.
“This was despite no visible evidence of any ecosystem for the BWA spectrum at the time of auction. Any allegations of so-called collusion, sharing the confidential information or rigging the auction are bizarre and completely rejected,” said a Reliance spokesperson.