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Another mega telecom scam in the making: BJP

BJP leader says telecom regulator's recommendation for new reserve price of spectrum would favour few operators. Regulator is contradicting its own recommendations, he says.

business Updated: Nov 12, 2013 18:22 IST

Senior BJP leader Yashwant Sinha on Tuesday warned the UPA government of another scam of the magnitude of the high-profile 2G scandal and asked Prime Minister Manmohan Singh to red-flag the Trai's recommendation for new reserve price of spectrum.

Expressing dismay at the new reserve price of spectrum set by Trai--the Telecom Regulatory Authority of India--Sinha dashed off a letter to Singh pointing out the inherent "contradictions" in the move.

"With these reserve prices and the amount of spectrum intended to be auctioned in the forthcoming auction, the potential loss to the government can be as high as Rs. 35,000 crore," Sinha said in his letter.

In the 2G scam, considered one of the country's largest corruption cases, the CAG had estimated the government's losses to the tune of Rs. 1.76 lakh crore.

2G licenses were issued to private telecom players, allegedly at throwaway prices in 2008. Then telecom minister A Raja, who has since resigned, and a host of well-known political leaders and business heads are allegedly involved in the scam.

Sinha was among the six BJP leaders who were part of the joint parliamentary committee (JPC) formed to go into the 2G scam.

In his letter, Sinha said that the proposed steep reduction in spectrum reserve price and spectrum usage charges (SUC) will favour few operators at the cost of national exchequer.

Sinha has pointed out that Trai has reduced the price of 1 MHz of spectrum pan-India by 37 per cent, and the reduction is much steeper for key circles like Mumbai and Delhi at 50 per cent.

The former finance minister noted that these recommendations of Trai contradict its own arguments. Last year, Trai had defended and justified the reserve price of Rs 3,622 crore for pan-India 1 MHz spectrum in 1800 MHz band. It had also insisted that impact of recommended reserve price on telecom tariff to subscribers will be negligible, Sinha added.

"I fail to understand why the same body now has junked its own recommendations within one year and has recommended such a steep reduction in the reserve price. This is not expected from a sector specialist regulator," Sinha said.

BJP did not buy Trai argument that steep reduction has been done for forthcoming auctions as the auctions held in November, 2012 and March, 2013 had been failures.

Sinha said auctions had failed due to collusion and cartelisation of the incumbent operators and not high prices.

"I urge your office to take immediate remedial measures and in order to realise the true economic value of spectrum and to uphold the interest of Indian citizens and the revenue objectives of the government, the recommendations of Trai with respect to reserve price and SUC should be rejected forthwith," Sinha said.

First Published: Nov 12, 2013 15:52 IST