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The law ministry has told the department of space, or DoS, that it could annul a contract under which 60 MHz of airwaves was leased to a private company five years ago.

The DoS had asked the government’s legal arm for its views on an obscure deal between the Indian Space Research Organisation (ISRO) and Devas Multimedia, in which the firm paid Rs 600 crore for the airwaves.

The company, owned by former ISRO official MG Chandrasekhar, sold a stake to a group of foreign investors, including Deutsche Telekom and private equity firm Columbia Capital, after the frequency spectrum was allotted.

The law ministry has described the contract as ‘illegal’, and said the government should take back the spectrum citing ‘national interest’, a top government official who has seen the written opinion, told ET.

The law ministry’s views were sought after Cabinet secretary KM Chandrasekhar wrote to DoS, asking if the deal could be scrapped.

The Devas management declined comment and said they would present their version of the story to ET soon. Space agency ISRO did not reply to detailed emails sent by ET on Friday and Monday. An ISRO official said its chairman was travelling and others were not authorised to respond.

Though Devas did not give an official comment, a director, who spoke on condition of anonymity, said it had followed all ‘requisite procedures’ and the issue was now between the departments of space and telecom. A telecom ministry official told ET that the Space Commission, the apex decision-making authority at the space department was looking into the issue.

3G auctions

This deal, hitherto virtually unknown, attracted the attention of several ministries during the recent auctions for third generation (3G) and broadband wireless airwaves, which raised over Rs 1.06 lakh crore.

Before the auction, several operators had pointed out that India was auctioning broadband spectrum in the 2.3 GHz band while in most countries this service was offered in the 2.5 GHz band. The 2.5 GHz band is considered to be superior and there are over 125 WiMAX operators globally who offer broadband services in this frequency band.

Companies such as chip maker Intel and some telcos had demanded that India too auction broadband spectrum in the 2.5 GHz band, but the telecom department washed its hands of the issue saying the bulk of these airwaves were with the space department.

“This shifted the focus to ISRO and although the company had signed a deal with Devas in 2005, it was found that the latter had not yet begun to use these airwaves. It was the industry which approached the prime minister’s office, which is in-charge of the space department, stating that ex-ISRO officials cannot be given airwaves that were leased to the space agency,” explained an official with direct knowledge of the development.

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This post was submitted by rishi maurya.

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