Even as Reliance Jio Infocomm negotiates to more closely co-operate with Reliance Communications, the pan-India 4G hopeful faces the potential cancellation of its license.
In a draft report, India's Comptroller Auditor General (CAG) has accused parent company Reliance Industries of rigging the 2010 wireless broadband (BWA) auction in order to secure pan-India 4G spectrum, FirstPost reported.
According to CAG's draft report, during the auction, minor ISP Infotel Broadband applied to participate, bid 128.48 billion rupees ($2.14 billion) for pan-India spectrum and then announced the sale of itself to Reliance Industries the day the bidding concluded. Infotel then became Reliance Jio.
CAG notes that the total bid was more than 5,000 times the company's net worth at the time of the auction, arguing that this shows that Infotel had colluded with Reliance Industries, sharing confidential details about the auction.
The report is also critical of the Department of Telecom for failing to recognise the alleged collusion, and for allowing Infotel to participate in the first place based on the department's eligibility criteria.
The DoT's decision to allow Reliance Jio to offer voice as well as data services has also given the operator an unfair advantage worth 228.2 billion rupees, CAG has argued.
Reliance Industries has rejected any suggestion of collusion, with a spokesperson calling CAG's allegations “bizarre”. The spokesperson pointed out that the 2010 BWA auction was one of the most competitive in India's history, and that voice services using the wireless broadband spectrum would always have been allowed if companies held the relevant license.
Reliance Jio is reportedly involved in negotiations with Reliance Communications over pacts involving the sharing of spectrum and operations as well as infrastructure.