DoT to impose 3 year lock in on new players

In wake of stake sales by some of the fresh licensees of 2G spectrum, department of telecommunications may impose a 3-year lock-in period on sale of promoters’ equity of new players.

DoT has been criticised for providing the 2G spectrum to new players without auction. DoT had issued licences to nine new companies including Loop Telecom, Swan, Unitech, Datacom, Shyam Telecom and STel for Rs 1,651 crore each.

However, two of these companies, Swan and Unitech, sold part of their stakes at a much higher price. While Swan was able to make $900 million by selling 45% stake, Unitech got $1.1 billion for offloading 60% stake. These two transactions led to wide spread criticism of DoT for having provided the licenses at prices which was only a fraction of the market value.

Therefore, the DoT now is considering imposing the 3-year lock-in. Ppex decision making body of the DoT, Telecom Commission is expected to consider the proposal at its forthcoming meeting next week.