Firoz.T.Totanawala The Bangalore Metro Reporter THE TOTAL RECALL SC CANCELS ALL 122 2G SPECTRUM ALLOCATION, BLESSING IN DISGUISE FOR GOVERNMENT

By Firoz.T.Totanawala 

The Bangalore Metro Reporter 

THE TOTAL RECALL!                                                     

SC CANCELS ALL 122 2G SPECTRUM ALLOCATION, BLESSING IN DISGUISE FOR GOVERNMENT 

 The Supreme Court’s judgment in cancelling 122 2G Spectrum Licenses, has dealt a severe blow to the corporate bodies, which have corrupted the system for their profit making. A. Raja, the then Telecom Minister and an accused in the 2G Spectrum Scam, has completed one year in Jail facing trial. The SC judgment has come as a sort of anniversary ‘Jolt’ to him. The SC directive to take a decision on fresh licensing in place of cancellation of the existing licenses will on the contrary fill the coffers of the government. Now that the SC has cancelled 122 Licenses, the Telecom revolution has come a full circle... 

In 2008, the UPA government allotted spectrums to the Telecom companies at throwaway prices. Even companies which had no reputation or experience in Telecom field obtained Licenses and later sold it to other interested players at not less than ten times the License fee. 

 The previous NDA government started the Telecom revolution and at that time itself, there were allegations of thousands of crores from the deal. Then under UPA Government, A. Raja proved that the Telecom services are a multi billion business. The ‘First come First serve’ policy introduced by NDA was continued by A.Raja and many companies to whom Telecom business was Greek and who set up benami companies were favoured with licenses at throw away prices. Allegedly, had the government adopted auction or tender process it would have belted more than two lakh crore rupees! There were some efforts at fixing a reasonable and market driven pricing, but the DMK vetoed the move and A.Raja was asked to continue issuing license to companies at a throwaway price. And these companies in turn sold the same to others at rates ranging from 10 to 15 times the license money. The License money was around 5000 crores and one can imagine the huge profit these companies made by selling off their licenses. 

 The spectrum allocations clearly benefitted the politicians in power and the Telecom companies. During that time, the Janata Party leader Subramanian Swamy exposed the scam and even petitioned the Prime Minister Mahmohan Singh to permit him to prosecute A.Raja for all the omissions and commissions by him in allocation of Spectrum Licenses. But nobody took notice of Swamy’s charges and ignored him. However, Swamy persisted with his crusade and continued to send reminders to the PM. He also approached the High Court for a direction to the PM to consider his petition, but it also refused to allow his petition. Finally, Swamy filed the petition in the Supreme Court which delivered a historic judgment. 

 Before Swamy admitted his petition in the Supreme Court, the CAG dropped a bombshell taking strong exception to the illegalities in the spectrum allocation. The CAG put the loss to the state by this scam at 1.76 lakh crores rupees which shocked the entire nation. The SC ordered the CBI probe which took up the probe seriously. It arrested A.Raja and other big wigs involved including Kanimozhi, the MP daughter of DMK boss Karunanidhi. The CBI also filed charge sheets and the trial is going on. A.Raja has completed one year in jail and among the key players and brokers some have committed suicides, some are murdered and some are absconding. Moreover, the scam also involves foreign companies. 

 The Supreme Court after taking into consideration all the facts stuck down the ‘first come first serve’ policy of the government and in one go, cancelled all the 122 licenses issued by A.Raja. It further directed the government to come out with a system in consultation with the Trail for allocation of new licenses in place of the cancelled ones. The Supreme Court also heavily fined few Telecom companies for having indulged in unfair practices. 

 And the net result of the judgment is that the operators will have to cease their operations in the next three months. The government may or may not allow them to bid for new licenses. Eventually, the mobile charges will become dearer once the new licenses start operation because they have to shell out more for the license fee. 

 Whatsoever, the government is extremely happy with the Supreme Court judgment as it is expected to earn revenue of more than two lakh crore rupees from issuing fresh 2G licenses. As on now, the government’s financial position is precarious and the rupee value has also nosedived. In such a situation, addition of 2 lakh crores rupees is definitely a blessing in disguise to the government. 

That is all.