'Old GSM operators caused loss of Rs 1 lakh cr to govt' | business | Hindustan Times
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'Old GSM operators caused loss of Rs 1 lakh cr to govt'

business Updated: Feb 13, 2011 19:29 IST

Anil Ambani group firm Reliance Communication on Sunday accused the old GSM operators for "unscrupulously" causing the revenue loss of over Rs 1 lakh crore to the government during 2001 to 2010.

The company alleged that old GSM operators cornered excess spectrum beyond 6.2 Mhz and caused the loss to the government through other fraudulent misrepresentations as well from time to time. While it has not named any operators, old GSM operators include Bharti Airtel, Vodafone and Idea Cellular.

"The old 2G operators, by active and fraudulent misrepresentation and concealment of material facts from the government, have unscrupulously caused the National Exchequer staggering losses of over Rs 1,00,000 crore, during the period 2001 to 2010," RCom Chief Executive Officer (Wireless Business) Syed Safawi said in a statement. He said that spectrum was hoarded illegally in excess of 6.2 MHz in active connivance with certain DoT officials and it has extensively been documented and commented upon in successive reports, which form part of the ongoing investigations by the CBI, under the monitoring of the Supreme Court.

The CAG's report of 2010, Justice Shivraj Patil report of January 20011, TRAI reports of May 2010 and February 2011 and Telecom Minister Kapil Sibal's recent public statements, have identified these anomalies in the recent past, he said.

TRAI had also pointed out that some operators were holding 2G spectrum in the "superior" 900 MHz band and has proposed that airwaves in this band should be priced at 1.5 times the cost of spectrum in 1,800 MHz band, for which the regulator has recommended six-fold jump in its prices last week.

The loss of revenue to the government by the old 2G operators, on account of excess spectrum alone, has been computed at figures of as high as a shocking over Rs 55,000 crore.

Several of these old 2G operators had also secured the prized and most valuable original eight licences for 2G in Mumbai, Delhi, Kolkata and Chennai in 1994-95, on a nominated basis, without any auction and by nearly zero payment of licence fees, he said.

For instance 2G licences for a Delhi and Mumbai licence were less than Rs 200 crore compared to the recent 3G auction of over Rs 7,000 crore for a licence in these two cities. He also pointed out that the old 2G metro operators, by "misrepresentation of facts, and in active connivance with certain DoT employees", obtained an extension and doubling of their licence period from the stipulated 10 years to an unprecedented 20 years, with zero payment of additional licence fees.

"These old 2G operators immediately sold stakes in their companies to foreigners, and encashed thousands of crores of rupees as illegal profits, in identical manner as has been adversely commented upon in the CAG's report of 2010, in relation to stake sales for 2G licenses issued in 2008," Safawi said.