CBI examining SC order directing FIR against telcos

The Central Bureau of Investigation (CBI) is learnt to be examining the Supreme Court order directing it to file an FIR against telecom companies from 2001 to 2006. CNBC-TV18’s Siddharth Zarabi reports.

This is going to be a major development if it fructifies. We learn from our sources that last week the Supreme Court has directed the CBI to file FIRs against all telecom providers from the period 2001 onwards till 2006. Remember, all the licenses issues after 2008 are already subject to multiple probes including by the CBI and the Enforcement Directorate (ED) among other.

This order of the Supreme Court is being examined by the CBI. We have confirmed with CBI officials that they are currently studying this order—examining it legally in-house and if need be, they will also consult with the law ministry.

Clearly, this is going to be a huge step if it is taken. It will have massive ramifications for the telecom sector for the investor sentiment overall for also possible foreign investment future plans of all the domestic operators because clearly it extends the entire noise about telecom licenses—the allegations of corruption, the alleged award of licenses in 2008 without due process being followed to 2001. Remember, 2001 was the time when India’s telecom growth started.

In 2001, we are still in the low millions, possibly a number of 13 million to 14 million subscribers put together after six to seven years of licenses having being awarded in the mid-90s. From 2001 we saw massive rounds of expansion in the telecom industry. We saw companies like Bharti becoming national operators, we saw there advent of wireless in local loop limited mobility, which was ultimately through a government decision of the National Democratic Alliance (NDA), converted into a full-fledged UASL license. We saw decisions to reduce the license fee and we also saw parallel—a fast up take in growth. We also saw something called the calling party place principle coming fully into effect due to previous decisions.

Clearly, the 2001 to 2006 period was the sunny phase of India’s telecom growth story and from 2006 onwards the bigger players became bigger. We had newer players come in but they clearly haven’t bitten into the market in that manner. But 2001 to 2006 was the big time for Indian telecom to say and therefore if FIRs are going to be registered, clearly, the sense that it will send out is possibly going to be negative.

Remember the FIRs for the 2008 scam are specific. They name certain companies. They talk about individual wrong doing. They also name DoT officials. There is a possibility of a charge sheet being filed against the then telecom minister A Raja along with his crucial and key aids. But to get a FIR against all telecom operators—and remember there are 14 of them in this country—would send out massive signals. We don’t know when CBI will finally take a call on doing this.