‘Entire implementation process fails to withstand the test of scrutiny'

The Comptroller and Auditor General (CAG) of India report on the 2G spectrum allocation process clearly highlights how the role of two important government bodies — the Telecom Regulatory Authority of India and the Telecom Commission — responsible for the growth of the telecom sector was undermined.

‘Hapless spectator'

Referring to the TRAI as “a hapless spectator,” the CAG report pointed out that the Telecom Commission (the decision-making body in the Department of Telecommunications), which could have helped in ascertaining the true value of 2G spectrum, was not properly consulted.

“The methodology for allocation of 2G spectrum — a scarce, finite national asset — for whose allocation there was an unprecedented demand, was not deliberated upon by the full Telecom Commission,” the report said, and pointed out that such discussion with the stakeholders represented in the Telecom Commission would certainly have benefited the DoT in arriving at “a more credible and transparent procedure for allocation, as also in ascertaining the true value of 2G spectrum.”

Benefited a few

“The entire implementation process fails to withstand the test of scrutiny, and hence the widely-held belief that it has benefited a few operators and not been able to maximise generation of revenue from the allocation of such a scarce resource. This has now been confirmed,” it added.

Similarly, the report said the role of the TRAI would also appear to have been reduced to that of a “hapless spectator, as its recommendations were either ignored or applied selectively.”

The CAG pointed out that the TRAI, in August 2007, had recommended ‘no cap' on the number of licences in any service area, despite which the DoT issued a press release on September 24, 2007 stating that applications for the issue of licences would be accepted only up to October 1, 2007.

Artificial cap

“This action, in effect, conveyed the fixation of an artificial cap in the number of licences to be awarded...It seems that the ministry, by issuing the press release in advance in September 2007, had, in effect, circumvented the TRAI's recommendation by taking an action counter to it and its acceptance by the DoT in October 2007,” the CAG said.