Presentation On 2G spectrum

Submitted to:-Submitted By:-

Arun Kumar Mahabir Singh

Asst.Prof. M.B.A.(G),82USM KUK

What IS 2G ?It is a term used in telecommunication

sector. It is a spectrum which support 2G technology. High bandwidth is required for this purpose. 2G means second-generation wireless telephone technology. Second generation 2G cellular telecom networks were commercially launched on the GSM standard in Finland in 1991.

2G introduced data services for mobile, starting with SMS text messages.

What IS 2G Spectrum Scam ?Acc. To comptroller and auditor general(CAG)

–o 2G licenses issued to private telecom players

at throwaway prices in 2008o 2G spectrum allocation had caused revenue

loss of Rs 1.76 lakh croreo Rules and procedures flouted while issuing

licenses

What is CAG

  The CAG is a typical file-based government auditing agency. It stresses on reporting deviations from set procedures and policies and fails to recognise that the deviations have resulted in speeding up economic growth.

CAG Report on 2G ScamHere are some of the points made by the CAG Report:85 firms suppressed facts, gave fictitious papers to DoTDoT kept spectrum pricing issue out of GoM's purviewA Raja ignored Prime Minister's, FM's and Law Ministry's

adviceSpectrum was rare national asset, should have been

auctioned2G spectrum allocated to new players at throwaway

pricesUndue advantage to Swan Telecom in allocation of

spectrumEmail ID of Swan Telecom shown as that of a Reliance

ADA group official

Contd…Spectrum allocated beyond contracted quantity to 9 firms

including Bharti, Vodafone, Idea, BSNL, Reliance, AircelIdea and Spice not given spectrum on grounds of proposed

merger- this was against the rulesAllocation of 2G spectrum led to loss of Rs. 1.76 lakh croreDoT did not follow its own practise of first-come-first-serve

in letter and spiritCalculation of loss based on 3G auction earlier this yearCut-off date for license letters advanced arbitrarily by a

weekThis went against time-tested procedures of government

functioningEntire process lacked transparencyUndertaken in arbitrary and inequitable manner

CAG indictsUnitech WirelessUnitech has got licence for 22 circle’s and it paid

the Rs.1658 crore licence fees for each circle but the company sale their 67.25% eqity for Rs.6120 crore to the telenor a company of Norvay.

Telenor has valued the spectrum of the companyCAG said that if we see this deal then the fees for

the allotment of licence is between Rs.7758 crore to Rs.9100 crore on the other way if it was not their then the govt. will get the fees between Rs.58000 crore to Rs.68000 crore for the 122 licence.

Who is A. Raja?Andimuthu Raja has come a long way from

being a lawyer in rural Tamil Nadu.The former Communication minister who

make the 2G spectrum scamAlloted the licence which are given in 2008 at

2001 prices of Rs. 1,658 crore.

WHAT ARE THE CHARGES ON FORMER TELECOM MINISTER A RAJA?CHEAP TELECOM LICENSES- 

Entry fee for spectrum licenses in 2008 pegged at 2001 prices.

Mobile subscriber base had shot up to 350 million in 2008 from 4 million in 2001.

 NO PROCEDURES FOLLOWED- Rules changed after the game had begunCut-off date for applications advanced by a

week

Contd….Licenses issued on a first-come-first-served basisNo proper auction process followed, no bids invitedRaja ignored advice of TRAI, Law Ministry, Finance

MinistryTRAI had recommended auctioning of spectrum at

market ratesFAVOURITISM, CORPORATES ENCASH

PREMIUM-Unitech, Swan Telecom got licenses without any

prior telecom experience.Swan Telecom given license even though it did not

meet eligibility criteria

Contd….Swan got license for Rs. 1537 crore, sold 45%

stake to Etisalat for Rs. 4200 crore.Unitech Wireless got license for Rs. 1661

crore, sold 67.25% stake for Rs. 6200 crore.All nine companies paid DoT only Rs. 10,772

crore for 2G licences

Thank You