While the report of the Comptroller and Auditor-General of India (CAG) on 2G spectrum allocation shows how the Department of Telecommunications (DoT) blatantly favoured at least a dozen companies, including some of the country's big industrial houses, it fails to name any top telecom official for the “lapses.”
While addressing journalists here on Tuesday, Deputy CAG Rekha Gupta denied that the report singled out the former Communications and Information Technology Minister, A. Raja. “We have written [the report] on the basis of whatever record has come to us... We have not given a clean chit to anyone,” she said when asked if the report was focused just on Mr. Raja.
The CAG report says DoT not only favoured the Anil Ambani led-Reliance Communications while granting licences, it also sided with existing operators such as Bharti Airtel and Vodafone-Essar by giving them additional spectrum at throw-away prices.
Out of 122 licences issued in 2008, 85 went to companies that were not eligible, while nine real estate companies misrepresented facts to get the spectrum. These include Unitech Infrastructure, Unitech Builders and Estates, Azare Properties, Aska Projects, Volga Properties (all belonging to the Unitech Group), Shipping Stop Dotcom Pvt Ltd (now Loop Telecom), Allianz Infratech (which later merged with Etisalat DB Telecom), Swan Telecom (now Etisalat DB Telecom), Datacom Solutions (now Videocon Telecommunications) and S Tel.
“These licences were issued to companies which did not have the stipulated paid up capital at the time of application. Further, 45 of these 85 licences were issued to companies who failed to satisfy conditions of main object clause,” the report said.
Similarly, in case of the Anil Dhirubhai Ambani Group, the CAG report said, at the time of applying for the licence, the equity stakes of Reliance Telecom Ltd. (RTL) in Swan Telecom was 10.71 per cent, which was against the rules. “It would appear that Swan Telecom, while applying for the UAS [unified access service] licences in 13 service areas, was acting as a front company on behalf of RTL and their application was, in effect, against the intent and spirit of the UAS licensing guidelines,” it added.
Then, the process of giving dual technology licence to Reliance Communications “lacked transparency and fairness,” and equal opportunity was denied to other similarly placed operators, including Tata Teleservices, which could apply for use of dual technology only after formal announcement of the policy.
On the issue of spectrum allocation to existing operators beyond the contracted quantity of 6.2 MHz, CAG has found Bharti Airtel to be the biggest beneficiary, among private players, with 32.4 MHz, followed by Vodafone-Essar with 19.6 MHz, Idea 12.6 MHz, and Aircel 3.6 MHz. Where the government could have earned over Rs.36,993 crore from its sale at market value, the exchequer got just Rs.2,561 crore.
Meanwhile, Ms. Gupta said the figure of Rs.1.76 lakh crore was reached on the basis of the 3G auction held earlier this year, in which the government mopped up over Rs.67,000 crore. “The quantum of loss is presumptive, we have only tried to quantify the loss,” she added. Asked whether licences allotted to ineligible players should be cancelled, Ms. Gupta said: “It is for the Public Accounts Committee to recommend and the government to decide.”