What is the 2G spectrum scam about?November 15th, 2010 - 1:25 pm ICT by IANS
New Delhi, Nov 15 (IANS) Here is a background on the 2G spectrum controversy that resulted in Communications and IT Minister A. Raja of DMK resigning Sunday:
The issue dates to 2008 when nine telecom companies were issued scarce airwaves and licences for second generation (2G) mobile phone services at Rs.1,658 crore (less that $350 million) for a pan-India operation. As many as 122 circle-wise licences were issued.
The opposition said that by giving the airwaves cheap, that too in the controversial manner of first-cum-first-served basis, the exchequer had lost billions of dollars. The cut-off date for applications was also arbitrarily advanced.
Later, based on the auction of airwaves for third generation (3G) services, which got nearly $15 billion to the exchequer, and that for broadband access, which fetched over $8.5 billion, the notional loss was estimated at $38 billion to the exchequer.
But Prime Minister Manmohan Singh himself defended Raja’s decision and said May 24 that all that his communications minister had done was to implement a policy already in place and none of the norms were flouted.
The opposition further stepped up its attack with two examples on 2G auction:
- A new player, Swan Telecom, bought licences for 13 circles with the necessary spectrum for $340 million but managed to sell a 45-percent stake in the company to UAE’s Etisalat for $900 million. This swelled its valuation to $2 billion without a single subscriber.
- Another new player, Unitech, paid $365 million as licence fee but sold a 60-percent stake to Norway’s Talenor for $1.36 billion, taking its valuation to nearly $2 billion, again without a single subscriber.
Similarly, another licensor, Datacom, later became Videocon Mobile and Stel now has large stake by Baharian Telecom. The other companies are Tata Tele, Idea Cellular, Loop Telecom, Shyam Telelink and Spice.
As recently as last month, the Supreme Court asked the solicitor general why the prime minister had not responded to the representation by the opposition to sanction proceedings against Raja.
The final blow came after the Comptroller and Auditor General of India said the entire process of spectrum allocation was undertaken in an arbitrary manner and that the advise of the industry watchdog was ignored and misused.
- What the 2G spectrum case is all about - May 20, 2011
- What is the 2G scam all about - Feb 02, 2011
- Raja pulls PM, Chidambaram into 2G scam (Roundup) - Jul 25, 2011
- Raja drags PM, Chidambaram into 2G scam (Intro Roundup) - Jul 25, 2011
- Only fresh equity, not spectrum, sold by phone firms: Chidambaram - Jul 25, 2011
- Ahluwalia defends Swan, Unitech on stake sale after spectrum allocation - Jan 16, 2011
- Airwaves Raja drags PM again, wants Chidambaram in witness box - Jul 26, 2011
- Raja resigns over spectrum row, DMK relents (Intro Roundup) - Nov 15, 2010
- Opposition using Raja comment to tarnish government: Sibal - Jul 25, 2011
- Some questions on the 2G spectrum scam - May 20, 2011
- More people involved in 2G scam, says Raja's lawyer - Feb 03, 2011
- Spectrum issue goes back to 2008, opposition calls it $13-bn scam - Apr 28, 2010
- Sibal to unveil draft National Telecom Policy 2011 - Oct 09, 2011
- Was told telcos sold stake to finance roll-out: PM - Feb 16, 2011
- Raja, aides presented in court (Lead) - Feb 03, 2011
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