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PMO is keeping fortnightly tabs on telecom industry

The Telecom Commission will now despatch a report on the 1^st and 16^th of every month to the PMO.

The PMO is closely watching developments in the telecom sector, especially because the recovery of outstanding dues from licensees of cellular and basic services has become a very sensitive. Many defaulting companies have moved the courts.

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In addition, the ministry of communication has also been asked to bring the opinion of the attorney general on the issue of revenue sharing regime to the Union Cabinet before implementing the opinion.

It may be recalled that DoT's licence fee recovery strategy is based on an earlier advice of the attorney general.

Sources say that as and when the AG chooses to reply on the fresh reference, the cabinet will undertake a detailed discussion on the matter.

The move to rope in the full cabinet was finalised while approving the new telecom policy, in an attempt to prevent DoT from riding roughshod over private telecom companies.

Communications Minister Jagmohan has referred the matter of the backdoor entry of foreign telecommunication companies to the Department of Company Affairs.

This follows Jagmohan's letter to Finance Minister Yashwant Sinha, urging him to investigate the allegations made by former Prime Minister H D Deve Gowda and the two writ petitions filed in the Delhi high court.

Jagmohan has forwarded the details of the allegations and connected issues to Jaswant Singh, chairman, Group on Telecom, and Vijay Kelkar, finance secretary.

On his part, Finance Minister Yashwant Sinha also took up cudgels against telecom companies who have run up huge licence fee arrears.

Sinha has initiated action against those companies who have claimed deduction under Section 35 ABB of the Income Tax Act. He also intends to impose capital gains tax on promoters who have earned profits from divestment of their equity holdings in telecommunication companies.

This decision is likely have a direct bearing on Max India. The company sold out its 40 per cent stake in Hutchison Max Telecom for Rs 5.49 billion. Another 1 per cent privately held by the Max India promoter Analjit Singh was sold for Rs 100 million in mid-1998.

With the deal totalling Rs 5.6 million, Hong Kong-based telecom operator Hutchison Whampoa now controls 69.09 per cent of the equity in Hutchison Max Telecom.

- Compiled from the Indian media

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