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Telecom licences manipulated

The CPI (M)’S charges of irregularities in the allocation of telecom licences to private players by the Union Telecommunications Ministry last year have got a fresh lease of life.

india Updated: Mar 24, 2009 01:28 IST
Manish Tiwari

The CPI (M)’S charges of irregularities in the allocation of telecom licences to private players by the Union Telecommunications Ministry last year have got a fresh lease of life. A Central Vigilance Commission (CVC) probe has pointed to a violation in rules and procedures.

CVC commissioner Pratyush Sinha told Hindustan Times that the allocation of 2G Spectrum (used for mobile communication) to some private companies on a ‘first-come-first-serve’ basis was “completely subjective and subject to serious manipulation”.
The 2G (second generation) spectrum is a scarce resource essential for providing quality mobile telephony service and data services for mobile — starting with SMS text messages. Replying to a question, Sinha said the Commission’s inquiry clearly
brought out that the officials did not follow the set rules and procedures in issuing licenses.

“Several DoT (Department of Telecommunications) officials have been prima facie found responsible for the manipulations and we’ve decided to initiate action against them.”

The CVC report, he said, was sent to the Telecom Ministry one and half months back and the Commission would soon be asking it to fix responsibilities of all those involved in the dealings. “If the DoT doesn’t respond immediately to our final report, we’ll on our own initiate action against them in the next few days,” Sinha added.

He said: “There was a clause that you can’t transfer your license unless you have rolled out the facilities, but both Swan and Unitech Wireless transferred their shares to two foreign telecom companies within six to nine months.” The CVC termed the transfer without making any progress in operationalising mobile telephony as “highly unethical”.

On whether the role of Dravida Munnetra Kazagham leader and Union Telecom Minister A.Raja — who has been in the eye of storm ever since the issue was brought into public domain — is also being looked into, he said: “It is out of the Commission’s purview”. The DoT had, however, refuted all such allegations so far.

A few months ago, the issue had rocked the Parliament, with the Communist Party of India (Marxist) alleging a large-scale scam and demanding a high-level inquiry into what it described “an enormous loss to the national exchequer due arbitrary allocation of 2G licenses”. The party has alleged that the DoT had given away scarce spectrum at a fraction of the market price.

The CPI (M) claimed that the Telecom Ministry adopted a completely inexplicable principle of ‘first come first serve’ for allocating the licence as well as a licence fee based on 2001 price. Had the government auctioned the spectrum, it would have got several times more revenue than what it got, the party said.

It may be mentioned that besides other companies, Swan Telecom had bought a license for 13 circles along with the necessary 2G Spectrum from the DoT for Rs 1,537 crore. Subsequently, it sold 45 per cent of its stake to the United Arab Emirates’ telecom operator, Etisalat for $900 million in September 2008.

Similarly, Unitech, which paid Rs 1,651 crore as license fee sold 60 per cent of its stake to a Norway-based company, Telenor, for Rs 6,120 crore in October 2008. After the two companies transferred their shakes to the two foreign companies, some political parties including CPI (M) smelt rat and raised the issue in public and the Parliament.