Contrary to the belief that only new entrants benefited from the spectrum for just Rs 1,658 crore ($340 million), existing majors, including Vodafone, Idea and Bharti, reaped the advantage for the same fee, a concern that has evoked a major political controversy.
The Cellular Operators Association of India, GSM operators' lobby which had earlier taken up the cudgels against the DoT for doling out 4.4 MHz start-up spectrum along with all-India licence at a throw away price, is conspicuously silent now possibly keeping in mind the benefits to its major members from the same policy.
 Senior DoT officials said it is not just new players even old ones have received spectrum in many circles on first- -come-first-serve (FCFS) basis, which is now being opposed by certain sections which have alleged that it is not transparent and has caused loss to the exchequer.
The Department has released a list of existing companies, which have been given licences and spectrum on the same FCFS basis as well as the 2001 pricing during 2004 -2007 period. DoT is likely to present this list on December 10 in its response to a PIL when the spectrum allocation petition comes up for hearing again in the Delhi High Court.
Telecom Minister A Raja recently said there is an "undeclared cartel" behind the current criticism against the FCFS basis of spectrum allocation, indicating that the existing players do not want competition to come. They said FCFS could stand the legal scrutiny as it is part of the Cabinet-approved NTP-99 and till now the 2G spectrum allocation procedure has been based on it.
Vodafone was awarded a GSM licence in Madhya Pradesh as late as on March 20, 2007 and the start-up spectrum was allocated on the basis of an all-India licence fee of Rs 1,658 crore-- the same figure at which new operators like Datacom, Swan, Unitech and others have been given licence. Last week Raja defended the spectrum allocation to new operators under the existing 2G policy and had offered to resign in case his ministry had violated the law in doing so.
Left parties and BJP are now demanding a probe, alleging that the policy has caused loss to the tune of Rs 60,000 crore to the exchequer in spectrum allocation, while the minister maintains that telecom regulator TRAI's recommendations are followed in letter and spirit.
Under attack since the two new telecom players' -- Swan and Unitech's -- selling stake to foreign companies at a huge premium, Raja had said that it was not an outright sale and the transaction brought FDI into the country. He had said the controversy had emerged because he had managed to break the "undeclared cartel" prior to his taking over as the telecom minister last year and has allowed new players to enhance the competition in the market. Raja had said the government has no intention of changing any of the current policies under the new telecom policy of 1999 because this is not required and it can disturb the level-playing field.
"In the 2G bands, allocation through auction may not be possible as the service providers were allocated spectrum at different times of their licence and the amount of spectrum varies," Raja said.
In November 2007, the then Finance Secretary D Subbarao had written to DoT asking if proper procedure has been followed with regard to financial diligence. "It is not clear how the rate of Rs 16,00 crore determined as far as back in 2001 has been applied for a licence given in 2007 without any indexation," Subbarao had written to then DoT Secretary Dinesh Mathur.
Check Out
Telcos miss licence deadline: here
Stake sale lock-in may need Law Ministry’s nod: here
Telecom minister claims transparency in Swan telecom deal: here
Comms minister Raja defends spectrum sale: here
Finance Ministry puts DoT on the spot over 3G auction: here
Raja reacts to criticism over 2G licensing: here |