The Indian Government is drawing up plans for a wholesale reform of the country’s telecoms sector, as it battles to rebuild confidence in the scandal-hit but highly profitable industry.
India’s biggest telecoms companies, including Vodafone, Tata, Airtel, Unitech and Reliance, met telecoms minister Kapil Sibal yesterday to discuss measures aimed at drawing a line under a massive corruption scandal that has rocked the Government of Manmohan Singh, damaged investor confidence in Asia’s third biggest economy and robbed taxpayers of up to £25 billion.
Insiders familiar with the talks said a “fair and transparent system for allocating spectrum licences” lay at the heart of the proposals, after an investigation into the award of 2G licences in 2008 found that some operators had secured spectrum at giveaway prices in exchange for bribes paid to Mr Sibal’s predecessor, former telecoms minister A Raja.
As part of the scam, more than $650 million is alleged to have been funnelled to Mr Raja, much of it via his wife’s bank account in Mauritius.
Mr Sibal, who replaced Mr Raja following his resignation in November, is understood to have launched a 100 day fast-track reform programme for India’s telecoms industry, the world’s fastest growing, on January 1.
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Recommendations will be made next month aimed at ensuring a level playing field for players in India’s mobile phone market.
With 752 million mobile phone users, it is also the world’s largest after China and is expected to generate $76 billion in sales in 2012, a 26 per cent increase on the previous year.
Mr Sibal is understood to have told telecoms chiefs that another key plank of the reforms would be changes designed to boost foreign investment in the industry and to allow for further mergers and acquisitions.
The scandal over the 2G licences has been widely described as the biggest corruption scam in India since the country’s independence in 1947.
A string of high-profile business figures have been dragged into it, including Shahid Balwa, 36, India’s youngest billionaire. He resigned earlier this week as managing director of his Mumbai property development company, DB Realty.
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Following his arrest in Mumbai last month for impropriety related to his holding in Swan Telecom, Mr Balwa is alleged to have told representatives from India’s Central Bureau for Investigation, that it would be more convenient for them all to return to Delhi for questioning on his private jet.