Here are the Key Takeaways from the 2G Spectrum Scam led by A. Raja under the Prime Ministership of Dr. Manmohan Singh. The office of CAG has done a commendable job by bringing to light the following,
The report’s findings indicate there were gaps in policy implementation by DoT in issuing licences, DoT did not consult the High Powered Telecom Commission at the time of granting 122 UAS licences in 2008 and overruled/ignored the advice/suggestions/views/ concerns of the Ministry of Finance, Ministry of Law and Justice and the Hon’ble Prime Minister.
As per the report, DoT also made arbitrary changes in the cut-off date for application in 2007, did not follow its own first-cum-first-served policy, and issued licences to 85/122 ineligible applicants.
To assess the presumptive value of spectrum allocated to 122 new UAS licencees and 35 Dual Technology licencees in FY08, CAG has used three benchmarks: 1) Offer made by S Tel for a pan-India licence, 2) 3G spectrum value as determined in the auction undertaken in 2010, and 3) valuation at which capital was infused into the new licencees.
Based on these, the presumptive loss for the exchequer from licences issued to new licencees is estimated at Rs332-1,025b, loss from issue of spectrum to dual technology players is estimated at Rs124b-371b and loss from issue of spectrum (beyond contracted
quantity of 6.2MHz) to GSM incumbents is estimated at Rs120b-370b. The higher end of the range is based on 3G auction prices while the calculations based on other benchmarks point towards the lower end range.
The CAG found deficiencies in the applications of 85/122 licencees issued licences in 2008. These include all 22 licences of Uninor, 21 licences of Loop Telecom (except Mumbai where it has incumbent operations), two licences of Allianz Infratech (now merged with Etisalat DB), 21 licences of Datacom (Videocon), six licences of S Tel and 13 licences of Swan Telecom (now Etisalat DB). CAG has also found a violation of rules in the equity structure of Swan Telecom as Reliance Telecom (GSM subsidiary of Reliance Comm) had more than the maximum 10% stake in the company.