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Smoke without fire

What is common between the 2G telecom scam and the one that has hit the Indian Space Research Organisation (Isro)? In both cases, it’s about spectrum. But beyond this, there is no similarity between the two cases. Pallava Bagla writes.

india Updated: Sep 01, 2011 10:37 IST

What is common between the 2G telecom scam and the one that has hit the Indian Space Research Organisation (Isro)? In both cases, it’s about spectrum. But beyond this, there is no similarity between the two cases. The 2G scam caused a ‘presumptive loss’ of Rs1.76 lakh crore and in the Isro ‘scam’ (though it’s misleading), the loss is about R2 lakh crore. Till date, however, nothing has been proved against Isro or Devas Multimedia Pvt Ltd.

Former Isro chairman G Madhavan Nair has questioned the present chairman K Radhakrishnan’s statement on the need for a “five-fold change in the national and strategic needs” of S-band spectrum. Nair, who has been accused of under-valuing the spectrum, says 70 megahertz (MHz) of S-band spectrum is reserved for the defence establishment — more than what they want. It’s true that Isro erred in not following some internal procedures. But its opaque functioning can’t be the reason to haul it up. Crony capitalism and nepotism didn’t seem to play a role in this case.

But if there is no scam, why did the government scrap the deal? This is because the 2G scam had hit the department of telecommunication. But in the case of Isro, the blame is at the door of the minister of space — the prime minister. Maybe this forced the knee-jerk reaction. But why did the strong Indian government have to invoke its ‘sovereign right’ to annul such a small agreement?

S-band spectrum is a range of radio frequency in the 2-4 Giga Hertz range and its usage decides its presumptive valuation. India has kept aside some S-band for its satellites and allied services; if reallocated, it can also be deployed for 3G-type mobile telephony. The former commands a much lower price, the risks are higher and customer base low. It has specialised use and some other factors make it very attractive for its use in remote areas like the Kargil peaks and the dense Maoist-controlled forests. The government can earn huge revenues from S-band only if it is released for mobile telephony in a terrestrial setting. But that may not happen very soon.

The Devas-Antrix (Isro’s commercial arm) deal was for hiring transponders that came bundled with about 70 MHz of spectrum. But today it is being benchmarked against the high auction revenues of the 3G spectrum sale. There is a difference between the two: the 3G spectrum rates are for terrestrial use in mobile telephony — not the same as satellite use of S-band like the Devas-Antrix deal envisaged. But by comparing this with the 2G scam, we are comparing apples with oranges. Doesn’t the annulment of the deal tarnish India’s record as a reliable business partner? Considering that some mega nuclear deals are coming up, the scrapping of the deal has opened a legal Pandora’s Box and has set a bad precedent. Can businesses with long gestation periods flourish in such an insecure environment? Moreover, thanks to this confusion, Isro’s credibility has also taken a beating.

For the use of S-band in satellites, Devas was paying about Rs12 crore per year for leasing out each transponder. It was supposed get six transponders on the first satellite (GSAT-6), which would have come automatically bundled with spectrum. If you do the calculations right, the Devas deal, which was for 12 years, would have meant a loss or gain, whichever way you look at it, of about R1,000 crore. The astronomical ‘presumptive’ loss was deduced by erroneously linking it to the 3G sale figures.

Was the gross exaggeration of this presumptive loss made to make the Isro controversy look bigger than the 2G scam? In this question lies hidden the politics behind the fracas and the lynch mob mentality that scuttled the deal. Undoubtedly, the PM’s clean image is priceless and, maybe, jettisoning the Antrix-Devas deal was only a small price to pay.

Pallava Bagla is the co-author of Destination Moon and correspondent, Science The views expressed by the author are personal