The Hindu : Front Page : CPI(M) for probe into spectrum allocation

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Friday, Nov 07, 2008
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CPI(M) for probe into spectrum allocation

Anita Joshua

NEW DELHI: The Communist Party of India (Marxist) on Thursday alleged a “big scam” in spectrum allocation to mobile operators and questioned the United Progressive Alliance government’s decision to turn a blind eye to the loss of an estimated Rs. 60,000 crore to the national exchequer by giving away scarce spectrum at a fraction of the market price.

Expressing shock at the government’s refusal to address the “huge scam,” the Polit Bureau, in a statement, described as “completely inexplicable” the Communications Ministry’s decision to release new licences in 2G mobile services on a first come, first served basis.

Referring to the Ministry’s contention that the 2G licences had been priced at the 2001 levels to keep the costs low for consumers, the Polit Bureau noted that this was not ensured through the licence terms and conditions. “As a result, the parties who had secured these licences have sold or are selling their shares at huge profits.”

Going into the details of the deal between UAE telecom operator Etisalat and Swan Telecom, besides Unitech and Telenor, the Polit Bureau said the government actually got only one-sixth of what it would have got had it gone through a fresh auction route. Swan and Unitech were allocated spectrum by the Ministry and the two companies subsequently sold part of their holdings to Etisalat and Telenor of Norway respectively. “The total loss to the exchequer of giving away 2G GSM spectrum in this way — including to the CDMA operators — is over Rs. 60,000 crore and must rank as one of the biggest financial scams of all times in the country,” it said.

Questioning the government’s decision to look only at whether these companies could sell their shares legally, the Polit Bureau said it should either invoke fair trade practice/anti-monopoly sections or look at other operative sections of the licence to see how firms could be stopped from reselling scarce natural resources. “If no other recourse is available, it must levy a windfall tax on such speculative transactions.”

Demanding an enquiry into the scam, the CPI(M) asked the government to learn a lesson from this experience and address the 3G licence issue. “Otherwise, the government will lose huge revenue shares from the existing 2G licensees as they switch from 2G and 3G spectrum.”

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