Reliance Jio 4G in trouble again after CAG’s suggestion

On the one hand where Reliance Jio is working hard to launch its 4G services as soon as possible, CAG’s draft report put RIL again in trouble on other hand. Yesterday CAG drafted a report to DoT suggesting them to cancel the nationwide Broadband spectrum which was allotted to Reliance Jio (IBSPL earlier) back in 2010. This suggestion was made by saying that RIL violated the rules and allegedly rigged the auction.\r\n\r\nFor your knowledge we remind you that in 2010 when Pan India  BWA auction a company viz. Infotel Broadband services (IBSPL) won the PAN India BWA licence worth rupees of 12,847 Cr, which was 5000 times more than the net worth of company. When the action ended, Reliance Industries limited acquired the IBSPL on the same day.\r\n\r\nThe CAG said with its draft report that DoT in 2010 failed to recognize the rigging of the auction right from beginning of the BWA  auction in which a small ISP, Infotel Broadband Services (IBSPL) emerged winner of pan-India broadband spectrum by paying 5,000 times of its net worth.\r\n

When asked to RIL on this matter they said,”There is no final CAG report that we are aware of. That said we reject any suggestion whereby spectrum was acquired in any manner other than through a transparent bidding process duly supervised by Government of India.”


Summery of CAG’s Report on Reliance Jio

\r\nCAG said IBSPL was ranked 150th in the list of ISPs, submitted an earnest money deposit of Rs 252.50 crore through the covert and overt assistance of third-party / private bank, bid for Rs 12,847.77 crore (5000 times of its net worth) for pan-India spectrum and then sold the company on the day of completion of the auction\r\n\r\nThis indicated IBSPL’s collusion and sharing of the confidential information with a third-party in violation of auction conditions, said CAG.\r\n\r\n \r\n\r\n \r\n

In replay to that RIL spokesperson said,”EMD was based on specific deposit requirement for each telecom circle. Accordingly Infotel Broadband Services Pvt Ltd (IBSPL) submitted a Bank Guarantee of Rs 253 crore in format as prescribed in NIA. Since no money was deposited as EMD, the question of source of deposit does not arise.”

\r\n \r\n\r\nWell this is clear that both IBSPL and Reliance played a fair trick in the BWA spectrum of 2010 but its is still not looking illegal in any manner. Reliance Jio will be definitely worried right now but we will still have to wait and watch DoT’s reaction on this complete matter.

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