2G spectrum norms: Telcos fume at govt

CIOL Bureau
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NEW DELHI, INDIA: Gone are the days when operators had a cakewalk for spectrum airwaves. With communications minister Kapil Sibal firm on going ahead with the new National Telecom Policy, telco czars are left red-faced.


On the backdrop of the dual technology swindle, the government is treading a cautious path and advocates radical changes in the policy framework. The operators had earlier sought PM's intervention.

Also read: Govt. to charge for spectrum beyond 4.4 MHz

The latest is the salvo shot by Airtel’s chieftain Sunil Bharti Mittal, who accused the government of overcharging the industry. He indicated that tariffs may be hiked. What's not explicitly made public is the fact that during the past one decade, the operators made huge fortunes out of telecom stride.


Mittal’s classic example is often quoted in the industry as he started as a small-time cellphone importer from Taiwan, and now owning a multi-billion dollar telecom empire.

As almost all the telecom services were opened up for free competition for unprecedented growth, the government continued to lose revenue from the operators while they were flourishing at the cost of the ailing state-owned BSNL. The service operators owe a whopping Rs. 2,200 crore to the government in the form of taxes, levies and penalties.

The logjam continues on some of the key issues such as market pricing for 2G airwaves, levy of charge for holding excess spectrum beyond 4.4MHz, 3G roaming pacts and spectrum re-farming.


DoT secretary R Chandrasekhar in a recent interaction with CIOL indicated that the regulatory framework would be discussed with operators, and once put in force, the telcos would fall in line with the new regime.

The Joint Parliamentary Committee (JPC) while probing the 2G scam revealed that the migration policy for telecom operators was approved in 1999. Former telecom minister Jagmohan in his note accused telcos of falsely claiming bad business conditions despite high priced equity sale, divesting shares for enormous profits to foreign partners.

Firms had sold equity at a 'sizeable premium' while the telecom department ignored their gains, he added. Jagmohan said that there was no legal, financial, commercial or moral justification for agreeing to the representation made by operators of cellular and

basic services.


Justice Shivraj Patil too slammed the previous telecom ministers for manipulating the policy regime. Patil said the country lost Rs. 43,500 crore in revenue due to the change in the National Telecom Policy (NTP) in 1999.

Ram Vilas Paswan, who handled the telecom portfolio during 1999-2001, is said to have replaced the fixed licence fee model with a revenue sharing agreement. It is reported that rules were amended to facilitate the new entrant, Reliance Infocomm, as a CDMA operator.

The government’s proactive and positive decisions in early 2000 led the sector to acquire new subscribers. During Dayanidhi Maran's tenure, from 2004 to 2007, the share of foreign direct investment (FDI) in telecom services was raised from 49 per cent to 74 per cent.

Over 27 licences out of 31 basic service licences were converted into Unified Access Service (UAS) licences in late 2003 while in April 2004 licence fee for UAS providers was reduced by 2 per cent.