It seems that Union Finance Minister Pranab Mukherjee had an inkling in 2007 itself that the manner in which the Department of Telecommunications (DoT) was handling the issue of granting newtelecom licences and distributing spectrum would put the government in trouble.
In a ‘Top Secret' letter to Prime Minister Manmohan Singh on December 26, 2007, just two weeks before licences were allotted to new companies at 2001-prices in January 2008, Mr. Mukherjee, who was then External Affairs Minister and also head of the Group of Ministers on spectrum-related issues, including pricing, highlighted the urgency of the government having a “clearly stated policy” on issues of telecom licences and spectrum.
Significantly, what the DoT was following in 2008 was the policy framed in 1999 despite the fact that the cellular market had grown leaps and bounds from 2003.
“While it is the prerogative of the government to frame, revise and change the [telecom] policy, it is also the responsibility of the government to do so in a transparent manner and then follow the stated policy in letter and spirit. Thus, it is essential for the DoT to issue the new norms immediately so that the spectrum allocation is done in a transparent manner,” Mr. Mukherjee wrote to Dr. Singh.
The letter, a copy of which is with The Hindu, was accessed by activist Subhash Chandra Agarwal through the RTI route.
Pointing to divergence of views among various government agencies and departments on telecom licences and spectrum allocation, even as the DoT was gearing up to issue new licences in 2007-08, Mr. Mukherjee told the Prime Minister that in August 2007, the Telecom Regulatory Authority of India (TRAI) suggested “revised norms which were stringent than the earlier ones,” while in October 2007, the Telecommunication Engineering Centre (a nodal agency under DoT) recommended even more stringent norms. Similarly, a third committee set up under the Additional Secretary (DoT) is taking another look at the norms.
Mr. Mukherjee clearly pointed out that there was no new notification from the DoT on these issues. “No notification post-March 2006 has been issued so far. It is clear that the notified norms so far are only those issued in March 2006,” he said.
Referring to various court cases filed by telecom/operators on spectrum allocation, he had warned that “it can lead to problems if we do not have a clearly stated policy and norms in this regard…While under the existing policy the government may keep on issuing new licences, the criteria for the grant of licences may be strengthened and put in [the] public domain at the earliest.”
However, Mr. Mukherjee also said the DoT “may continue to follow this [existing] policy till any further changes are made in this regard.” Interestingly, a file noting on this issue by the Prime Minister's Private Secretary on December 28, 2007 stated that “PM wants it examined.”