2GLicenes

www.bsnlnewsbyashokhindocha.blogspot.com M-9426201999
Stand of SNEA(I) on award of 2G licences stands fully vindicated.
The mammoth spectrum scandal first brought to public gaze by this Association at its very initial stages itself now stands explicitly and vociferously vindicated with the CBI raid at the DOT Headquarters on 22nd Oct 09. The raids came soon after a case was registered under Section 120(b) of the Indian Penal Code and Prevention of Corruption Act. “It has been alleged that there had been serious irregularities in the award of Unified Access Services Licences to private companies. As per information received, there was criminal conspiracy between certain officials of DoT and private persons/companies and others in order to award licences to those companies by putting a cap on the number of applicants against the recommendations of the Telecom Regulatory Authority of India and by awarding licences to private companies on first come first served (FCFS) basis at a price fixed in 2001, without any competitive bidding,” the CBI said in a statement. The scandal, robbing the exchequer of huge sums of money figuring around Rs. 50,000 to 60,000 crores, was first reported by this Association as early as Sept 2008. The exposure invited the notice of the PM office, Finance ministry, CVC and other ministries, which could feel the heat and understand the gravity of the monumental corruption, which virtually allowed realty estate and retail companies to make huge money by selling their recently acquired licences bundled with 4.4 mhz of spectrum per circle at throwaway prices to international telecom giants at huge premium. The basic question that arises here is that, despite all the warnings from CVC, MOF, PMO office to refrain from allocating precious 2G spectrum in an arbitrary manner, DOT went ahead with such allocation, and thus deliberately deprived national exchequer of thousands and thousands of crores of revenue. These huge sums in turn went into the kitty of real estate developers and retail companies, with neither any background of telecom operations nor any telecom infrastructure, which were given the opportunity to trade the precious licences and spectrum to foreign Companies for huge sums of money, with 700% profits on the buying price. The DOT, as exposed earlier by SNEA (India), instituted new merger norms, allowing these real estate developers and retail companies in the newly acquired garb of telecom players to privately sell up to 74% of their holdings to foreign companies at exorbitant prices to help them earn huge premium. Such huge money, made by them through the sale of spectrum would and should have gone to the exchequer had the DOT gone in for the traditional and accepted method of auctioning in a transparent manner which they were advised to do by MOF, CVC and PMO. In a very funny development the DOT decided to sell the licences at dirt cheap rates of 1651 crores for a pan-Indian licence bundled with 4.4Mhz Spectrum. DOT further decided that the sale of licenses would be on First- come- first –serve (FCFS) basis and advanced the date for submitting the applications for acquiring licenses from 30th Sept., 08 to 25th Sept., 08. In the meanwhile it probably had ensured that the favoured ones were already in queue. It was mayhem that really followed, with the unsuspecting ones hiring “goondas’ to gain control of the queue. It was great ‘Tamasha’ which was celebrated well by the media. To make the matters more funny and curious , the enacted norms, which restrict these entrants to sell their recently acquired spectrum to the existing operators for a period of three years – again another eyewash - however, do not impose any restriction when it comes to selling the spectrum to foreign players. And first come first serve criterion was adopted when there were about 574 applicants in the queue.
An internal note of the government, which has been circulated to different central ministries, has argued that at a time when the market cap of Indian telecom industry is pegged at a stratospheric 300 billion dollars, the freedom to divest up to 74% holdings would induce these new players who just acquired pan-India mobile licences bundled with 4.4 mhz of spectrum per circle for a modest 1651 crores to make a fast buck and deprive the central exchequer of potential revenue running into billions of dollars.
In the meantime, CVC, whose repeated warnings to DOT to auction 2G spectrum went unheeded, issued fresh notice to DOT over new merger norms, and asked DOT to furnish the details of the steps that the government has taken to ensure there is a minimum holding period based on roll out requirements. Judicial scrutiny of the arbitrary allocation of 2G spectrum by DOT resulting in alleged loss of about 50,000 crores to the government was the next result, when the exposure of the Association caught media and public gaze with the Ministry even getting signatures of certain Unions that ‘all was well in the dirty kingdom of Denmark’ and taking these to the media proclaiming that this Association is only a splinter organisation, while the majority union had given it a clean chit. But undaunted we decided to fight against the great powers behind just because it very hugely hurts and wounds the public money.
Hon’ble High Court of Delhi while issuing notices to the Union of India asking it to explain as to ‘what first come first serve policy for allocation of 2 G recently allocated spectrum to some applicants - many of them real estate developers - on a price decided in 2001 for the entry of fourth operator’ means.
It is extremely pertinent to mention here that this Association was the only forum in BSNL to raise the issue from different platforms and on different occasions, regarding such arbitrary allocation of 2G spectrum and consequent loss of about 50,000 crores to the exchequer in a vociferous manner. This Association raised fundamental questions about the allocation of spectrum in a non transparent manner, completely ignoring the timely warnings from the PMO, Finance Ministry and the CVC. We had also exposed the violations in the precedents said to have been observed by the DOT/Ministry. In July 2001, when the fourth mobile license was awarded, an exacting price of Rs. 1651 crore for a pan-india license was decided through an open multi-stage, auction/bidding process. Again in August 2003 TRAI suggested multi-stage, auction/bidding for all new licenses. This was approved by a GoM and the cabinet 31st Oct. 2003. The NTP 99 was accordingly amended to accommodate these changes on 11th Nov. 2003. Section 7.39 of these recommendations approved by the Cabinet and incorporated in the NTP 99 clearly states “the government may introduce additional players through a multi-stage bidding process as was followed for the fourth cellular operator”. In order to cherry pick its preferred ones the DOT ignoring all these definitive views of the TRAI , the Finance Ministry and the Cabinet, went in for the FCFS at a price fixed in 2001, which even a toddler would say does not in any way match the price in 2008. But the clever technocrats and bureaucrats and other wise men considered otherwise, equating a 2001 price with 2008. The issues raised by this Association more than six months prior to the filing of the PIL in the Delhi high Court was more than reflected in the question “How the value of Swan and Unitech, having no expertise or infrastructure in Telecom, enormously swelled by selling part of their equity to foreign big players and vested interests. Swan which obtained 2 G spectrum at a throwaway price of 1651 crores is today valued at more than 8000 crores by selling its 45% equity to Etisalat, a telecom company of UAE.”
BSNL Management, under pressure from DOT, went a step ahead in allowing Swan to share its infrastructure, including wireless, so as to help it to start wireless operations in the Country. This again was very strongly protested by us. This Association shall tirelessly and fearlessly continue its struggle against all such telecom policies of the government which are intended to help private companies at the cost of the exchequer and the growth of the BSNL.
We are proud that such exposures and bold actions in fighting for issues, which others neglect and reject, ultimately find their value in the form of the CVC registering a case in Jun 09 and the CBI following it up after five months. The battle for justice will be prolonged but we shall pursue it untiringly – unyieldingly. Yesterday it has captured the visual media headlines and today those of the print media. Tomorrow we do not know. But we know even tomorrow there will be one fighting organisation – the SNEA (India).
www.bsnlnewsbyashokhindocha.blogspot.com M-9426201999