Reliance Jio gets undue benefit of $530 mn

Published on May 10, 2015 12:55:25 PM

According to the latest Comptroller and Auditor General of India (CAG) report, Reliance Industries telecom unit Reliance Jio Infocomm got an undue benefit of about $530 million, after the government allowed it to offer voice services over wireless broadband spectrum it had won in 2010.

The government’s lapses resulted in an undue advantage of Rs3, 367 crore ($528.56 million) for Reliance Jio, due to non-accounting of time value of migration fees.

Undue favour to operators using dual/multiple technology Pursuant to TRAI’s recommendations (August 2007), DoT granted telecom licences for dual technology to 4 Private operators in October 2007/January 2008 but failed to implement TRAI’s recommendations to levy spectrum usage charge for the combined total of spectrum allocated in different technology in specific bands without any reason on record.

This resulted in undue benefit to two major telecom operators namely Reliance Communications Limited and Tata Teleservices Pvt Ltd using dual/multiple technology to the extent of Rs. 882.06 crore (2009-10 to 2013-14).

Reliance Jio Infocomm was the first to take benefit of this scheme and paid UL entry fee of Rs 15 crore and additional migration fee of Rs 1658 crore in August 2013.

This migration, allowed at prices discovered in 2001, resulted in undue advantage of Rs. 3,367.29 crore to M/s Reliance Jio Infocomm.