Date for receiving telecom industry’s views on lock-in period extended

January 21st, 2009 - 4:14 pm ICT by IANS  

New Delhi, Jan 21 (IANS) The telecom regulator Wednesday extended the last date for receiving the industry’s views on the proposed lock-in period on equity sale in new licence holding companies to Jan 27.On Jan 9, the Telecom Regulatory Authority of India (TRAI) had sought the industry’s views on the lock-in period by Jan 20.

According to telecom officials, this move is aimed at preventing operators from making windfall gains.

Last November, the Telecom Commission, the apex decision-making body of the Department of Telecom (DoT), had approved a three-year lock-in, following which the department had referred the issue to the TRAI.

The lock-in provision would be applied only in case of promoters’ equity sale and would not affect strategic investments, the telecom commission noted.

The lock-in clause was introduced by the DoT after Communications Minister A. Raja faced criticism from many quarters regarding the decision to award pan-India telecom licences for Rs.16.51 billion (Rs.1,651 crore), a price that was fixed in 2001.

The ministry’s decision had resulted in losses to the tune of over Rs.500 billion (Rs.50,000 crore) to the exchequer, critics said.

The DoT had awarded licences to nine new companies including Swan and Unitech. After getting licences, Swan offloaded a 45 percent stake to the UAE’s Etisalat for $900 million while Unitech divested up to 60 percent stake to Norway’s Telenor for $1.1 billion.

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