India’s external security agency, the Research and Analysis Wing (RAW) has requested the Department of Telecommunication (DoT) to make background verification a must for companies offering international long distance (ILD) services.

Writing to the department, RAW has stated that DoT should approach intelligence agencies including RAW and Intelligence Bureau to ensure that a thorough background verification of companies is carried out before awarding them the ILD licence. In addition, RAW has stated that security clearances should be sought from intelligence agencies every time an ILD licence holder sets-up a gateway in the country.

The security agency has claimed that since companies holding ILD licences are allowed to offer ISD calls and internet-related services, it is critical to analyse security ramifications of a project before provisional permission for installation and operations for ILD is granted to a company. Therefore, DoT should ensure that security clearances are sought from the country’s intelligence agencies before awarding ILD licences.

Further, RAW in its letter has stated that in majority of the cases ILD licencees are owned by front companies of telecom operators, which may have a foreign stake in the company. This may have severe security implications for the Indian telecom networks with ILD operators having access to the country’s network.

At present, an ILD company is required to get approval from the Foreign Investment Promotion Board (FIPB) if foreign stake in the firm is above 49 per cent. However, with the government allowing 100 per cent foreign direct investment in the telecom sector, a lot of foreign companies have expressed interest in increasing stake in their Indian subsidiaries. For example, United States-based firm, AT&T has approached Indian authorities to raise its stake in Mahindra Telecommunications. AT&T holds ILD licence in the country in partnership with Mahindra Telecommunications.

RAW in its communication to DoT has pointed out that the department has been granting conditional approval to companies for setting-up ILD gateways for providing voice and data services. The final approval for offering ILD services is provided by the department only after successful demonstration of lawful interception and monitoring capabilities. However, RAW has claimed that in majority of the cases, national security agencies are not consulted for any background check of companies or their promoters to examine security implications of allowing a new company to access telecom network of the country.

DoT, however, is of the view that whenever a company opts for foreign investment, then FIPB approval is required which entails necessary security clearances.  Also, since department on its part informs intelligence agencies about the provisional approvals it grants to ILD service providers, DoT is of the view that a thorough background check of ILD licence holders as suggested by RAW may not be essential.