Tata Motors, JLR global sales fall 4% in Sept
RIL Q2 net up 20% on quarter; refining margins help

Corporate Oct 15, 2012

Excess spectrum: Airtel, Voda gain edge; RCom, Tatas lobby hard

By Aditi Roy Ghatak and Paranjoy Guha Thakurta

Consider the law as it applies to the aam admi. If you steal or are in unauthorised possession of something that does not belong to you but someone else, the law is supposed to put you behind bars. The authorities are then meant to take away the purloined possessions and, eventually, the judiciary decides on the punishment to be meted out to you. The law may not be concerned with what end use the stolen product had been put to.

Now consider the law as it applies to those in India with unauthorised possession of electromagnetic spectrum used for telecommunications.

If the latest (8 October) decision of the Empowered Group of Ministers (EGoM) on telecom headed by Finance Minister P Chidambaram stands, those who have built extremely profitable business empires on the basis of spectrum that they were not supposed to have in the first place, will not suffer any penalty, nor will they have to pay for it. Indeed, they will only have to pay for continuing to use spectrum. Forget taking away the unauthorised spectrum, the government of India would like to gift the extremely expensive natural resource to them.

For some reason, unauthorised spectrum does not quite hit the headlines or attract the attention of ordinary Indians with the same intensity as, for instance, stolen land or pilfered coal. Had the government suggested that people who plundered coal be allowed to get away without paying for it or stated that a developer who had developed and sold land without paying for it should be let off without a penalty, there would probably be a big hue and cry.

For some reason, unauthorised spectrum does not quite hit the headlines or attract the attention of ordinary Indians with the same intensity as, for instance, stolen land or pilfered coal.

Spectrum, because of its relative newness as a scarce natural resource, continues to evade public understanding notwithstanding the reams of paper spent on writing about the 2G scam. The excess spectrum scam has gone on for some 15 years, according to some reports. But no one wants to dig deep and hard.

The authors of this article had written a series of five articles that were published by Firstpost between 29 May and 4 June this year. The story has thereafter become even more interesting. At least two Members of Parliament have been asking Prime Minister Manmohan Singh to tell them from when this unauthorised spectrum has been give to certain companies - primarily Airtel and Vodafone - because even the investigation into unauthorised spectrum allocations is not being allowed to go before the year 2000.

However, as two MPs, Prataprao Jadhav and Mithilesh Kumar, wrote to the PM in August this year, the scam seems to have been started from the mid-1990s when bureaucrats probably did not quite understand the value of spectrum, though the recipients certainly did.Read the letter here

Jadhav alleges that "GSM (or the global system of mobile communications technology) operators have duped the government of thousands of crores of rupees by holding spectrum beyond the contracted limits of their licence" and that this has been "going on for 15 years". The 1994 licence agreement they signed stated that the "cumulative maximum spectrum agreed and allowed was 4.5 Mhz (Megahertz) only, which is in a pair (2.25+2.25) in the frequency bands of 890-902.5 and 935-947.5 (GSM 900 Mhz band)".

"However, what was actually given by the government was 4.4 + 4.4 Mhz, "that makes a cumulative of 8.8 Mhz. It is to my utter shock that by now the two operators of the first metro licences are today enjoying 20 Mhz (10+10) Mhz," wrote Jadhav.

A frustrated Mithilesh Kumar wrote that he has been raising this "grave" issue time and again during zero hour but has received no response from the minister concerned. He refers to the initial violation of the 1994 agreement between the government and the mobile operators that was for cumulative maximum spectrum of 4.5 Mhz. It is not just MPs who have hit a wall of silence; so have some individuals who have applied for information under the Right to Information (RTI) Act.

One file has been lying unanswered with the Public Information Officer, Ministry of Communications, from 6 April. The applicant has followed up his query but nothing has been extracted from the ministry. Efforts by the correspondents to trace the file have been futile and people in the know of things suggest that the file has disappeared. What is clear is that the scam has continued through the NDA and UPA governments, led by the BJP and the Congress.

There was some hope that justice would be done pursuant to the Attorney General Goolam Vahanvati's opinion to the EGoM given on 6 October 2012 which said that mobile operators should be charged for spectrum held in excess of 6.2 Mhz from 2008.

Fair enough, even though the demand should have been to establish how much excess spectrum was held from the outset and what the damages should be. Even the Comptroller & Auditor General said in its November 2010 report that service providers were allotted excess spectrum without any one-time payment and estimated that the value of allocated excess spectrum was Rs 36,993 crore without even having gone into the spectrum giveaways in 1994-95.

All that these MPs and RTI applicants are wanting is for the government to explain how and when Clause 20 of the original 1995 licence agreement under section 20.3, that offered a "cumulative maximum" up to 4.4 Mhz was amended in the licence agreement in September 2001 to "up to 4.4 Mhz + 4.4 Mhz".

Pages: 1 2

Related Stories.