Asserting that the alleged revenue loss of Rs 1.76 lakh crore on issuance of new 2G licenses in 2008 was “presumptive”, the new Telecom Minister Kapil Sibal today said that the DoT will soon start an exercise to arrive at the actual figure.

“All the numbers that are being handed out are all presumptive as the (government auditor) CAG itself said... We must move from presumptive to certainty,” Mr. Sibal told PTI.

It (revenue loss to the exchequer) is a separate exercise in which “we have to determine net present value” of the licences, he said, adding there was no auction of 2G spectrum so “you can’t determine what the market value would have been for this.”

It is this exercise that needs to be done, he added.

In 2008, the government had distributed 122 new telecom licences to seven operators, besides 38 dual technology licences bundled with 4.4 MHz of start-up spectrum, at a seemingly undervalued price of Rs 1,651 crore for pan-India operations. This was opposed by the incumbent operators, some of whom quoted arbitrary higher prices for acquisition of the radiowaves.

The CAG has calculated the “presumptive” loss on account of the under-valued sale of 2G airwaves at Rs 1.76 lakh crore, based on the amount raised from the recent 3G spectrum auction as well as the price quotations submitted by some of the operators who did not get licences.

“A large number of people have been granted 2G licences with an entry fee of Rs 1,651 crore... We now have to determine what would be the share of revenue the government would have got over a period of 20 years (periodicity of licence) and then arrive at its value,” Mr. Sibal said.

He also recalled that the first-ever auction of licences in the mid-nineties was a disaster, as the operators made high price bids that were not sustainable in the then-growing Indian telecom market.

This forced the then government to announce a relief package in 1999 under its New Telecom Policy, following which the licence regime was switched over to a revenue-sharing model instead of a fixed fee.

The minister has already initiated action against new operators that allegedly suppressed information to get licences or are yet to start services despite getting spectrum.

Mr. Sibal has categorically stated that if it is found that wrong information was given by the firms, their licences will be cancelled. The Department of Telecom (DoT) will be sending showcause notices to nearly half a dozen firms holding licences for about 85 circle areas to ascertain the reason for non-fulfillment of the terms and conditions on which they were granted spectrum.

In all, 119 licencees will be issued showcause notices, either for being ineligible to bag spectrum at the time of allocation or for missing roll-out obligations.

They will be given 60 days to reply before the government decides on a course of action.

Meanwhile, the DoT is also carrying out a field survey to assess the fulfilment of roll-out obligations by all operators and, in case of a failure to meet commitments, the corresponding penalty or liquidated damages to be imposed on the telecom service provider.

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