Govt. Defends Allocation of Unified License to Mukesh Ambani’s Reliance Jio

The Ministry of Telecom is busy these days. After the spectrum allocation auctions, the Comptroller and Auditor General of India (CAG) protested voiced their surprise at Mukesh Ambani owned Reliance Jio Infocomm Limited (RJIL) being allotted a unified license. Further, the allegations claimed that this resulted in an undue gain of Rupees 22,848 crore to RJIL. However, the Ministry of Telecom has come out strongly in criticism of such claims.

The CAG in an audit note has claimed that the government has allowed entities, like the owner of RJIL, Reliance Industries Limited (RIL) to basically enhance the offerings of their services that enabled them to provide voice services for a paltry amount. The Telecom Ministry has taken a stern objection to these claims and refuted all the charges levelled by the CAG. The Ministry has explained that the notice inviting applications for 3G and broadband wireless access (BWA) spectrum before a 2010 auction didn’t restrict BWA winners from providing voice telephony. These winners were allowed to acquire either a unified access service license or an ISP, and if they purchased a unified license, they would become eligible to provide any of the services under the permit, including full mobile voice services. However, to convert this license the holder had to pay a one-time fee of Rupees 1,656 Crores to the government.

It is the telecom ministry’s responsibility to ensure that the appropriate amount is recovered from a company in case of such license conversions and the fact that RIL was able to ‘get away’ with it in the eyes of the CAG is the prime reason for this complaint. Quoting the Honourable Supreme Court’s judgment in 2012 regarding the 122 telecom permits handed out the Telecom Ministry then headed by A. Raja, the CAG said that the Government of India should have charged Mukesh Ambani’s Reliance Jio the differential amount paid by 3G spectrum winners in 2010 plus the net present value of the total amount. This whole issue was came on the back of the judgment that rendered the 122 telecom permits given in 2008 as invalid on account of them being allotted on the basis of 2001 prices instead of 2008 prices.

As a result, the differential amount which the CAG claims should be paid by Reliance Jio to the Ministry of Telecom is Rupees 22,484 crore. However, the Ministry of Telecom claims that nothing wrong has been done and no untowardly favours towards Ambani Seniors Company have been done. As such, the matter should end right here.

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