Delhi High Court slams spectrum allocation policy
New Delhi (PTI): The Delhi High Court on Friday slammed the first-come, first-served spectrum allocation policy of the telecom ministry, days before Telecom Minister A Raja is to take charge for the second time in Sanchar Bhawan.
"It is like selling cinema tickets," observed a division bench comprising Justice Mukul Mudgal and Justice Valmiki Mehta after they did not get satisfactory answers from the Department of Telecom (DoT) counsel as to how much spectrum the government has alloted and how much was remaining with it.
"We find it very strange that public exchequer and valuable resources have been involved and misused in this way.... We are completely astounded."
Mr. Raja has been in the eye of storm for allocating spectrum on first-come, first-served basis, even as he has claimed that he was only following the policies of his predecessors.
The court then asked the Centre what was the specific date by which the spectrum was available for allocation by DoT.
Replying to it, DoT counsel submitted that there was no specific date as such. He also added that the entire "process of allocation was a transparent process".
On it the court said, "we would see how much transparent really it was... we would find it out".
Court was hearing a petition filed by one Arvind Gupta, who has challenged spectrum issue policy of the government and alleged that DoT alloted it at much below than the market prices to the new operators.
Mr. Gupta, an economist, has alleged that under its policy for allocation of radio frequencies, the DoT has virtually offered subsidies to the new entrants.
He added that these violations were apparent in the case of Swan Telecom and six subsidiaries owned by real estate major Unitech. Some of them later sold the alloted spectrum at much higher prices.
Consenting to his allegations, the bench said, "prima facie we find that spectrum has been allocated in a worst manner and public Exchequers have lost thousands of crores (rupees)".
In his submissions filed before the high court Gupta alleged that while giving 2G spectrum DoT had violated self-established norms of net worth and cross holding criteria.
"In allocating spectrum without any effort to discover the current market prices means that the government is offering state subsidies to the telecom players," he said.
A close scrutiny of the share subscription agreement of Swan Telecom, would make it clear that Reliance Telecom and Tiger Trustees were two founding promoters of the firm. He said Reliance Tele is an arm of Anil Ambani's ADA group firm RCom and Tiger Trustees was also promoted by the same group.
Mr. Gupta alleged that there was a scandal of Rs 50,000 crore in the 2G spectrum allocation which was done without application of mind and in undue haste and secrecy.
The court referred the matter to another bench headed by Chief Justice and directed it to be listed on July 8.