2G SPECTRUM SCAM

Spectrum (Airwaves) – A rare national asset.

Central government awarded licenses and second generation telecom spectrum to 9 companies for different circles across India in 2008 for 122 circles for offering mobile telephony services. These licenses were awarded in an injudicious and non-transparent manner for an inconsiderable sum of Rs. 1,658 crores, which was the price estimated in 2001, with the mobile subscriber base of 4 million. This abnormally low price was fixed without taking into account the remarkable increase in mobile subscriber base of 350 million in the country, and the precious and the finite spectrum was allocated on a first-come, first-served basis without calling for proper competitive bids and without regard to experience in telecom sector. There was no fixed criteria for awarding licenses to the applicants and also the date were preponed. The subsequent sale of spectrum so cornered by fly-by-night operators for many times the fee they paid had caused enormous loss running into tens of thousands of crores of rupees to the public exchequer.

Based on the subsequent auction of spectrum for 3G services, which generated nearly Rs. 63,000 crores, and that for broadband access, which fetched over Rs. 35,700 crores, the loss to the nation due to under pricing of 2G spectrum is estimated by the CAG to be a whopping Rs. 1,76,645 crores !!

CAG Report on 2G Spectrum Scam

• Spectrum is considered as rare national asset and it should have been auctioned.
• Estimated total loss caused to exchequer through spectrum allocation to 122 licenses and 35 dual technology license in 2008 was Rs. 1,76,645 (Calculation of loss based on 3G spectrum auction earlier this year).
• Advice of PM, TRAI, Law Ministry & Finance ministry ignored by Raja.
• Entire process lacked transparency. Spectrum was awarded as first –come-first serve basis, without asking for auction, which was against the rules. The deadline was also pre-poned by a week.
• Rules were molded to benefit SWAN. SWAN got the license at Rs. 1537/-crore while it sold its 45% stake at Rs.4200 crore.
• Relience has given spectrum ahead of others.
• TATA teleservices among others who got undue benefits.
• Unitech Wireless got the license at Rs. 1661 crore while it sold its 60% stake at Rs. 6200 crore.
• Idea & Spice not given spectrum on grounds of proposed merger – this was against the government rules.

The spectrum was awarded as per the prices in 2001. That time total mobile subscriber base was 4 million while in 2008 the mobile subscriber base was 350 million.

Since, now Supreme Court has ordered CBI to investigate, we can hope that justice will be done and those guilty will get their due.

Unitedworld Executive.