Spectrum allotment legal, say Bharti Airtel, Vodafone

In the FIR filed on Saturday by the CBI in the 2G scam during the then National Democratic Alliance rule, it was alleged that the then Secretary (Telecom) Shyamal Ghosh and the then DDG, DoT, J.R. Gupta entered into a criminal conspiracy with three beneficiary private telecom companies, based in Delhi and Mumbai, and abused their official position as public servants.

It was further alleged that the accused showed “undue favour and caused undue cumulative advantage of approximately Rs.508.22 crore to beneficiary companies,” including the three accused companies, since allocation of such additional spectrum till such decision was reversed by the DoT in 2008.

The companies were Bharti Cellular [now Bharti Airtel]; Hutchison Max [now Vodafone Essar] and Sterling Cellular [now Vodafone Essar].

Interestingly, in its report for 2010-11, the Comptroller and Auditor-General of India pointed out that nine operators, including Bharti Airtel, Reliance, Vodafone, Idea, Aircel, BSNL and MTNL, were allotted spectrum far and above the upper limit fixed in the telecom licence agreement, and this could have helped the government earn an additional Rs.36,993 crore.

Responding to the CBI searches, Bharti Airtel said it had always maintained the highest standard of corporate governance and regulatory compliance. “We would like to categorically state that all the spectrum allotted to us from time to time has been strictly as per the stated government policy,” a spokesperson said. “We are providing all details and correspondence to the authorities and shall provide complete support as needed in the matter,” the spokesperson added.

Vodafone has also said that their documents are in full compliance with the governing laws and regulations. A statement from the company said: “There was a visit by CBI officials on Saturday morning at our office in Mumbai and Delhi seeking information related to the spectrum allocation to operators during 2001-02. All our documents are in complete compliance with the governing laws and regulations. Vodafone India is completely co-operating with the officials and will provide them all the required details as part of their checks.” Vodafone had entered India in 2007 through acquisition of the Hong Kong-based Hutchison Telecommunications International's stake in Hutch Essar.

In a sharp reaction to the CBI raids, the BJP termed the action an “attempt to malign the NDA government” and divert attention from the ongoing probe into the 2G scam. However, the Congress rebutted the BJP charge, saying the law would take its course.

The 2G scam has been grabbing headlines since last November when Mr. Raja quit the UPA government and the CBI turned the heat on him.

Mr. Raja has contended that the decisions he took were in consonance with the policy being followed by the Telecom Ministry since the NDA rule.

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