Big scam in 2G spectrum allocation says CPM

Big scam in 2G spectrum allocation, says CPM

Alleges `first come first served’ cost Rs.. 60,000 crore to the exchequer

Friday, November 07, 2008

NEW DELHI, INDIA: The Communist Party of India (Marxist) lashed out at the Government on India saying that the manner in which the 2G spectrum was allocated by the Communications Ministry has led to a huge scandal in the country.

It is now clear from the sale of shares by Swan and Unitech that more than Rs.. 60,000 crore has been lost to the national exchequer by giving away scarce spectrum at a fraction of the market price, the CPM said in a statement and demanded the government to conduct an enquiry.

The party alleged that the UPA Government, instead of addressing the huge scam that has taken place on the allocation of the fourth licence in 2G mobile services has taken the position that nothing needs to be done.

The Communications Ministry had recently come under fire from various quarters, which alleged undervaluation of 2G spectrum leading to controversy over stake sales of Swan and Unitech. The DoT had even issued a statement in this regard.

For the release of the fourth licence and the spectrum required, the Communications Ministry adopted a completely inexplicable principle of `first come first served’ for allocating the licence as well as a licence fee based on 2001 price, the party pointed out.

As a result, the parties who had secured these licences have sold or are selling their shares at huge profits.

Swan Telecom bought a licence for 13 circles along with the necessary 2G spectrum for Rs.. 1,537 crore and subsequently, it sold 45 per cent of its stake to UAE’s telecom operator Etisalat for $900 million.

Unitech, which paid Rs. 1,651 crore as licence fee, has now sold 60 per cent of its stake to Norway’s Talenor for Rs.. 6,120 crore, the CPM pointed out.

The deal between Etisalat and Swan Telecom, and Unitech and Talenor has brought out the magnitude of largesse that has been doled out, it said.

The government has actually got only one-sixth of what it would have got, had it gone through a fresh auction route – a loss of Rs.. 10,000 crore to the exchequer on Swan and Unitech licences alone.

The total loss to the exchequer of giving away 2G GSM spectrum in this way, including to the CDMA operators, is over Rs.. 60,000 crore and must rank as one of the biggest financial scam of all times in the country, the party alleged.

The Polit Bureau of the CPM demanded the Government of India to hold an enquiry to find out how a scam of this magnitude could be carried out and to put in measures in the licences so that this does not recur in the future.

Do you think the government is trying to cover up a scam? How do you see the Telecom Ministry's stand that the existing licensing policy would help the telecom penetration in the country?

©CyberMedia News

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Shanavaz said on 2/1/2011 12:44:02 AM:
First of all the whole concept is misunderstood by Bapus who came from the age of getting license to TVs, Radios and even Bicycles. The claim by the opposition now is to collect Rs.1,76,645 Crore from the telecom companies, in return the companies will collect this amount from the public. This amounts to Rs. 10,000 per citizen of India. A ridiculous calculation by stupid officials and politicians. The CAG allegations are: 1. Underpricing second generation (2G) spectrum (Who will decide the price ?-the opposition ?) 2. Allowing companies to use two competing technologies —(GSM & CDMA) technology — using the same licence. (It is already existing for over 10 years. Both are different protocols for the same technology. Two separate license is not necessary. It is easy to operate both GSM and CDMA) 3. Allocating more spectrum to companies than what their licences specified. (Old licence will show a bandwidth that will not work in today's mobiles. The bandwidth requirement doubles every six months. Every six months they will issue license ? ) Based on these false allegations, companies who missed the boat challenged on court. To operate telecom or mobile service, no previous record required. It is a readymade mix of imported technology and equipments from China. All todays operators started fresh without any experience when they started. Now this technology improves at a fast pace, and changing every year. Every six months the cost of calling reduces by half. Who will pay this much huge licensing fee and how will they recover from end users ? We have already lost years and before the court verdict comes it will be another two years. Those who make this an an issue and delaying the progress of the country by five years are the enemies of the nation. If they want the people to pay Rs. 10000 per head, they are criminals. Whichever political party that supported this move exposing it's ignorance and short-sightedness. They donot deserve contesting elections and cannot rule a modern country.

to Shanavaz

mohamed sadath said on 12/19/2010 1:00:51 PM:
As per the statement of cpim it is very cleared that dot has losses crores. silence of pm is doubtful himself as a connection in the scam. The congress lead governments are always in the suspection of scams from Rajiv Gandhi ministries. Mr Sukram telcom minister also alleged cellular scams. In the last congress ministry was almost exempted from scams because of left parties was supported the ministry and they have the clear role in the stearing committee and interfere the rule.

to mohamed sadath

Collapse <div runat='server' id=Comm33774 class='CommentsContainer'><span class='commentsFrom' style='float:left;'>Vishal Hemnani said on 5/16/2010 11:07:47 PM: </span><br/>It is really shameful and an instance of unbridled corruption entrenched in India. Fulfilling personal interests and exploiting the nation's economy and revenues is a crime. However, the Govt, as it seems, has been trying to cover up the scam as if it does accuse the Minister, BJP will hype the issue threatening the party in power.
If not punitive, atleast an action to exterminate should be taken against Mr. A Raja. <div class='CommentLineContainer'><input type=button onClick='MoveComm(33774,ctl00_ctl00_ctl00_cphMainContentSection_cphMainContentSection_cphSection1ContentPart_ThreadedComments1_txtPid);' value='Reply'/> to Vishal Hemnani </div>

Vishal Hemnani said on 5/16/2010 11:07:47 PM:
It is really shameful and an instance of unbridled corruption entrenched in India. Fulfilling personal interests and exploiting the nation's economy and revenues is a crime. However, the Govt, as it seems, has been trying to cover up the scam as if it does accuse the Minister, BJP will hype the issue threatening the party in power. If not punitive, atleast an action to exterminate should be taken against Mr. A Raja.

to Vishal Hemnani

mohamed sadath said on 12/19/2010 1:06:29 PM:
no body can take action against mr Raja because Mr. Manmohansing,(leader of the ministry) the man who take action is on suspected the scam as he is on silence. It can be revealed only by a JPC investigation.

to mohamed sadath

Venkitesh M.V said on 11/7/2008 12:49:55 PM:
There is something fishy about the silence of the government and DoTs efforts to justify the act of allocating 2G spectrum on first come first serve basis. Now it is the duty of the givt to come clear on the issue and conduct an enquiry

to Venkitesh M.V