India Cancel Deal satellite spectrum after a dispute

India has decided to cancel the agreement at issue to lease satellite spectrum of a private company, claiming that needs s-band spectrum for national purposes, including the defence.

A Committee of Cabinet Security decided to cancel the 2005 agreement between Antrix, the commercial arm of space research organization (ISRO) Indian and Devas Multimedia, Minister of India Veerappa Moily, told reporters at a briefing TV in Delhi on Thursday.

The cancellation is done pursuant to the provisions of the agreement, said Moily. He has not explained why ISRO, an agency of the country under the space, which includes the Office of the Prime Minister, had concluded the agreement in the first place.

Deva, Deutsche Telekom as an investor, was not immediately available for comment.

In a statement on Wednesday, the company said that it expects the Government to fulfil all the obligations of the agreement and will take "strong, including legal action," to protect the rights and interests of the company.

Moily has said that if they should go to Court Devas, it would fail.

After media reports and opposition politicians, earlier this month has questioned the proposed leasing spectrum satellite Devas without an auction, the GOI claimed that the agreement with Devas was already under consideration by December 2009. The controller and Auditor General of India (CAG) is reviewing the deal and has asked the Government because the agreement was finalized without competitive bid, according to reports.

Similar issues were raised in November by the GAC on the decision of the Department of telecommunications to allocate spectrum of 2 G mobile operators on a first come first served basis. The Telecommunications Department allegedly favoured some private operators, not following proper procedures, said the GAC. Central Bureau of Investigation of India has arrested a number of people including telecom ex-Minister of the country, r. Raja, in connection with this controversy.

Devas, a startup at Bangalore, was founded in 2004 to establish a national satellite system for delivering applications for rural development, e-Government, emergency communications, remote connectivity and strategic services, according to the website of the company.

The Department of space in 2000 was authorized to enter into commercial agreements with non-governmental users for spare capacity on its satellites, after meeting the requirement of government agencies. Private companies with foreign participation Indian less than 74% were authorized to establish satellite systems, and the Department may contract to build capacity on its satellites that could be used to provide private companies with commercially to spectrum.

Government officials said earlier this month that the space Department had begun a review of the agreement between Antrix and Devas in December 2009 and recommended that it was canceled in July 2010.

The contract had not been resolved yet because it was a complex process, k. Radhakrishnan, Secretary, Department of space, he told reporters at a briefing earlier this month.

Deva said earlier this month that it had proceeded with the project after having obtained the necessary permissions and approvals from government agencies, including the Commission and the Office space of the Union, and the same it has been confirmed by Antrix in February 2006.

Deva also received approvals to foreign direct investment by Foreign Investment Promotion Board of India and is in full compliance with government regulations, the company said.

Having fulfilled all its obligations towards the 2005 agreement, Devas said it now expects delivery of contracted space segment capacity, which was delayed by more than two years.

John Ribeiro covers outsourcing and General technology breaking news from India to the IDG News Service. Follow John on Twitter at @ Johnribeiro. E-mail address of John john_ribeiro@idg.com