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CVC questions Govt on spectrum allocation

The CVC has sought details of the Govt policy of allotting spectrum to new telecom firms at Rs 1,658 crore for all-India licence -- an issue which has raised severe criticism from political circles.

india Updated: Nov 16, 2008 14:52 IST

The Central Vigilance Commission has sought details of the Government policy of allotting spectrum to new telecom firms at Rs 1,658 crore for all-India licence -- an issue which has raised severe criticism from political circles.

The Commission's action comes in the wake of two new firms -- Swan and Unitech -- selling stake in their telecom ventures to foreign players at a huge premium which alleged to have caused massive revenue loss to the exchequer.

"They (Swan and Unitech) have hardly made any progress in operationalising licences the purpose for which they were alloted the spectrum. Swan is reported to have sold its 45 per cent equity for 900 million dollars (Rs 4050 crore) to Etisalat, while pan-India licence costs Rs 1,650 crore. This is highly unethical practice and necessary action in this regard is essential", said CVC K S Ramasubban.

He has written a letter to Telecom Secretary Siddartha Behura seeking details about the spectrum allocation policy.

The CVC has also pulled up telecom regulator TRAI for not fulfilling its role in advising the Department of Telecom on spectrum allocation process.

Seeking details from the DoT on its spectrum allocation policy, the CVC said, "The department may follow an auction process for allocation of balance 2G spectrum even though the available spectrum is of meagre quantity."

The CVC has also taken strong objection to the action of some licencees who have sold equity at high values without starting operation.

The commission has not been satisfied with DoT's earlier reply on these issues saying the response is neither complete nor specific. It has asked the DoT secretary to look into the matter personally on the CVC's concern over allocation of 2G and 3G spectrum.