India Won't Spare Guilty in Mobile-Phone Licenses Probe, Minister Says

India will prosecute any company that violated rules for obtaining mobile-phone licenses from 2001 and won’t spare those found guilty, Communications and Information Technology Minister Kapil Sibal said.

“There should be a message that those who have done wrong and will do wrong will not be spared,” Sibal told Bloomberg-UTV in an interview aired today.

Prime Minister Manmohan Singh’s government has come under fire from opposition parties and the nation’s chief auditor for the way airwave permits were awarded in 2008. India’s highest court has said it will directly monitor a federal probe into the sale of wireless licenses and yesterday ordered investigators to submit a progress report by its next hearing on Feb. 10.

The court’s move raises scrutiny on the probe of a scandal that’s roiled India’s phone industry, led to the resignation of Sibal’s predecessor Andimuthu Raja and subsequent searches of Raja’s residences, and stalled parliamentary proceedings.

India’s top auditor said last month the sale of 157 permits at “unbelievably low” prices two years ago deprived the treasury of as much as 1.4 trillion rupees ($31 billion).

The government was now focused on restoring confidence in the industry and ensuring that the ministry would “function in a transparent, open and non-discriminatory manner,” Sibal said.

‘Industry Survives’

“I want to make sure that the industry survives," he said. "We should not send a message to the industry that we are not bothered about the survival of the industry, or all we are bothered about is sending people to jail.”

The Comptroller and Auditor General of India said in its report the government sold wireless airwaves in 2008 for 123.9 billion rupees, though they could have earned as much as 1.5 trillion rupees from the sale. Raja has denied any wrongdoing.

The auditor also said that the government awarded licenses to 13 ineligible companies at the time. Two of those permits are currently used by units of Norway’s Telenor ASA and Emirates Telecommunications Corp.

The Telenor and Etisalat units said Dec. 14 they will prove the validity of their mobile-phone licenses to the government after the Department of Telecommunications gave the carriers 60 days to prove they followed rules in getting the permits.

Sibal said any changes in the ministry’s rules would occur after due consultation with the industry and consumers.

The aim will be to ensure “people will have confidence in the fact that I am taking these decisions to create a level playing field,” he said. “And I am going to take these decisions after a dialogue and through a transparent process.”