2g spectrum scam 2012

7/31/2019 2G Spectrum Scam 2012

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2G

SPECTRUM

SCAM

www.time4education.com


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IN 2011,

TIME MAGAZINE LISTED

2G SPECTRUM SCAM AS

NUMBER TWO ON THEIR

ALL-TIME LIST OFTOP 10 ABUSES OF

POWER..!


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STRUCTURE

MOBILE GENERATIONS 1G, 2G, ETC. SPECTRUM

SPECTRUM MANAGEMENT IN INDIA

2G SCAM TIMELINE AFFECTED PARTIES CORPORATES,

POLITICIANS, BUREAUCRATS

CAG REPORT SUPREME COURT JUDGEMENT

REACTIONS

WAY FORWARD


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MOBILE GENERATIONS

Standards set by The InternationalTelecommunications Union (ITU), part of the UNO

1G 1980s; analog signals; used mainly for voice

calls; poor sound quality; low transfer speed

2G 1990s di ital si nals GSM standard SMS

introduced; GPRS also introduced; much better

data transfer rates

3G 2000s; very high data transfer rates; videocalls, video conferencing, mobile TV, online

gaming, etc.

4G Crazy data transfer rates!!!


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SPECTRUM

Spectrum refers to the radio frequencies/ air waves; apart of the electromagnetic spectrum

Different parts of the spectrum used for different

technologies/ applications

AM/FM Radio, TV broadcasts, mobile communications,w , ,

maritime communication, etc.

A limited natural resource; hence, government

regulated and then, sold/ licensed to privateoperators

Unlike other natural resources, spectrum is not

consumed upon its usage; liable to be wasted if not

used efficiently


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FREQUENCY BANDS ALLOCATED

FOR DIFFERENT SERVICES

S.No. Radio service Frequency band

1 Radio navigation 9 14 KHz

2 Broadcasting 500 1600 KHz

3 Maritime mobile 2000 2200 KHz

4 Mobile phones 610 810 MHz; 890 960

MHz; 1710 1930 MHz

5 FM 85 110 MHz

6 Bluetooth 2400 2480 MHz


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Spectrum and Mobile

telephone services in India GSM technology works in frequency bands of 900 and

1800 MHz; CDMA technology works in 800 MHz band

Min. spectrum required for launching

GSM services: 4.4 MHz services: . z

Essential to allocate spectrum in common bands which are

being used the world over

Indias mobile subscribers base ~ 900 million Scarce spectrum + poor quality services (call drops, etc.)

Too many operators in a single area

Limited availability of spectrum for commercial use

Lack of coherence in govt. policies spectrum allocation


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SPECTRUM MANAGEMENT

Wireless Planning and Coordination (WPC) wing ofthe Ministry of Communications responsible for

Spectrum management in India

National Frequency Allocation Plan basis of

development and manufacturing of wireless equipment

TRAI Telecom Regulatory Authority of India

Independent regulator

Mission: to have conditions that encourage growth oftelecommunications sector in India

Ensure fair, transparent policy environment

India is divided into 22 telecom zones and there are a

total 281 zonal licenses in the market


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2G SPECTRUM SCAM

1. May 18, 2007 A. Raja takes over as the Ministerfor Communications and Information Technology

2. Process of allotment of 2G spectrum along with

Universal Access Service (UAS) licenses initiated by

the Dept. of Telecom (DoT). v

of 2G spectrum to DoT; ignored by A. Raja

4. Sept 25, 2007 Telecom ministry issues Press note,

fixing deadline for applications as Oct 1, 20075. Oct 1, 2007 DoT receives 575 applications for UAS

licenses by 46 companies


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2G SPECTRUM SCAM6. Nov 2, 2007 PM writes to Raja directing him to

ensure that spectrum is allocated in a fair/ transparent

manner; Raja writes back allegedly rejecting many of

his recommendations

7. Nov 22, 2007 Ministry of Finance writes to DoT

raising concerns over the procedures adopted;demand for review rejected

8. Jan 10, 2008 DoT decides to issue licenses on first-

come-first-serve basis; prepones the cut-off date to

Sep 25 07 from Oct 1 07; company representativescalled between 3.30 pm and 4.30 pm, and issued

letters of intent; Pan-India license fee fixed at 2001

rate of Rs. 1658 crore;

Govt. richer by Rs. 12,386 crore in one day!


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2G SPECTRUM SCAM

9. Nov 2008 Swan Telecom got license for Rs. 1537crore and sold 45% stake to Etisalat for Rs. 4200

crore; Unitech wireless got license for Rs. 1661 crore

and sold 60% stake for Rs. 6200 crore; Tata

Teleservices sold 26% stake to DoCoMo for Rs. 13070

crore

10. May 4, 2009 Detailed complaint made by NGO

Telecom Watchdog to the Central Vigilance Commission

(CVC) on spectrum allocation to Loop telecom

11. May 19, 2009 Another complaint by Arun Agarwal,highlighting spectrum to Swan Telecom at throwaway

prices

12. 2009 CVC directs CBI to probe allocation of 2G

spectrum


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2G SPECTRUM SCAM

13. Oct 21, 2009 CBI registers FIR against unnamed DoTofficials and private firms for criminal conspiracy and

loss to exchequer

14. Nov 16, 2009 CBI seeks details of tapped

conversation of corporate lobbyist Niira Radia to find

out involvement of middle men in spectrum allocation

15. March 31, 2010 Comptroller and Auditor General

(CAG) says there were large scale irregularities in

spectrum allocation

16. May 6, 2010 Telephone conversations between Rajaand Radia made public by the media

17. Sep 13, 2010 SC asks Centre, Raja to reply in 10

days to 3 petitions of CPIL on allegation that there was

a Rs. 70,000 crore scam


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2G SPECTRUM SCAM

18. Nov 10, 2010 CAG submits report; claims that thescam caused a loss of Rs. 1.76 lakh crore(!!!)

19. Nov 14, 2010 Raja resigns as Telecom minister

20. Nov 15, 2010 Kapil Sibal takes over Telecom Min.

21. Nov 20, 2010 Affidavit on behalf of PM filed in SC;

22. Dec 2, 2010 - SC comes down heavily on Raja for

bypassing and overruling PMs advice to defer

allocation of 2G spectrum by a few days23. Dec 8, 2010 - SC favours including in the probe period

since 2001 when first-come-first-serve was the norm for

spectrum allocation


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2G SPECTRUM SCAM

24. Jan 4, 2011 Subramanian Swamy moves SC seekingcancellation of 2G spectrum licenses

25. Feb 2, 2011 Raja, Siddharth Behura and RK

Chandolia arrested and remanded in CBI custody

26. Feb 17, 2011 Raja sent to Tihar Jail. ,

Finance minister, P Chidambaram as witnesses

28. Feb 2, 2012 SC cancels all 122 licenses allotted

during Rajas tenure29. Feb 4, 2012 Special court dismisses Swamys plea to

make Chidambaram as co-accused in the 2G scam


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SCAM LIST OF COMPANIES

1. Unitech Wireless (Uninor) 22 licenses

2. Datacom Solutions (Videocon) 21 licenses

3. Loop Telecom 21 licenses

4. Sistema Shyam (MTS India) 21 licenses

5. Swan Telecom (Etisalat DB Telecom) 15 licenses

6. Idea cellular 13 licenses

7. S Tel 6 licenses8. Tata Teleservices 3 licenses

JUDGEMENT DIRECTLY IMPACTS 60+ MILLION MOBILE

PHONE USERS; MOBILE NUMBER PORTABILITY AN OPTION


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2G Scam Affected Parties

Andimuthu Raja

DMK; 4-times MP

CBI, ED allege he could have received Rs. 3000 cr. as

bribe for bringing forward the cut-off daten un n w n m n ur u n

Seychelles to channelize the kickbacks he received

Waywardly redefined the first-come-first-serve policy

Didnt auction or adopt some other market-determinedmethodology

In Tihar jail for more than one year now; applied for bail

several times but every time, got rejected


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M K Kanimozhi

DMK; Daughter of Tamil Nadu CM, Karunanidhi

Owns 20% stake in Kalaignar TV; step-mother owns

60% in the same channel or e w t aja to get a a wa, promoter o

Swan Telecom, to circuitously route Rs. 200 cr. to

Kalaignar TV

Taken in custody in May 11; granted bail in Nov 11


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Siddharth Behura

Telecom secretary, when licenses were granted

Behura conspired with Raja and others accused

Allegedly shut counters to physically block other telecomm n

RK Chandolia

Rajas private secretary, when licenses were granted Conspired with Raja and other accused

Allegedly shut counters to physically block other telecom

companies


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Corporate Executives accused

Sanjay Chandra MD, Unitech Wireless

Gautam Doshi, Hari Nair, Surendra Pipara

Reliance ADAG Vinod Goenka, Shahid Balwa, Asif Balwa Swan

Telecom

Ravi Ruia, Anshuman Ruia Essar group

IP Khaitan, Kiran Khaitan Loop Telecom

Sharath Kumar Kalaignar TV

Karim Morani Cineyug Films


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Subramanian Swamy

Politican, Academic, Economist; President Janata Party

In Nov 08, wrote a letter to PM seeking permission to

prosecute Raja in regards to 2G spectrum scam ,

asked CBI to investigate and report on the matter

Filed various documents in court to prosecute Chidambaram

Filed a petition against PMO in the SC; argues that PMO

took too long (inaction) in replying to his plea to prosecute

Raja in the scam

SC accepted his petition, saying that all public authorities

should take the decision within 3 months against any public

official, if a request is made


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CAG REPORT ON 2G SCAM

Findings

Telecom commission, Finance Ministry, Law Ministry,

Prime Minister all suggestions/views ignored

Arbitrary changes in the cut-off date

FCFS policy not followed

Issue of licenses to ineligible applicants

Any loss ascertained while attempting to value the2G spectrum can only be presumptive; we have

looked at various indicators to assess a possible

value from the records made available to audit


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CAG REPORT ON 2G SCAM

Findings

1. In Nov 07, S Tel offered to pay a much higher price;

at those prices, value of licenses is approx. Rs.

65,000 cr.. v

prices, value of licenses is approx. Rs. 1,52,000 cr.

3. New licensees of 2008 have attracted substantial

FDI; by this estimate, value of all licenses is betweenRs. 58,000 cr. and Rs. 68,000 cr.

Additional spectrum allotted to existing players; value

of such spectrum may be upto Rs. 37,000 cr.

HENCE, LOSS OF RS. 1,76,000 CRORES!


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Sibals Arithmetic Government has not made up its mind on the charge for

spectrum beyond 6.2 MHz, therefore, loss of Rs.36,993 cr.needs to be excluded as of now

The remaining loss of Rs.1,39,652 cr. is only Rs.99,000 cr.since government has only given 4.4MHz spectrum, while

CAG has wrongly calculated loss based on 6.2 MHz nce t e auct ons were e n , ut censes

were given in 2008, the time value of loss of spectrum isnot Rs.99,000 cr. but Rs. 56,000 cr.

Since spectrum was given late and not in 2008, license

term is 19, not 20 years, loss is down to Rs. 53,000 cr. Since 3G spectrum is three times more efficient than 2G,

the loss is further down to Rs.17,755 cr.

Since 4.4MHz is free with UAL license anyway, the actualloss is zero


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SUPREME COURT JUDGEMENT

By Justice AK Ganguly and GS Singhvi

Cancelled all 122 licenses granted during Rajas

tenure; allocation described as unconstitutional and

arbitrary mpose ne o s. cr. eac on n ec re ess,

Swan Telecom and Tata Teleservices; Rs. 50 lakh on

Loop Telecom, S Tel, Sistema Shyam

Govt./TRAI to decide fresh norms for issuing licenses A Raja wanted to favor some companies at the cost

of the exchequer


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REACTIONS SC JUDGEMENT

CORPORATES

Telenor, Sistema asserted they would take legal

measures to protect their investments

Norway wants to take up 2G issue at Govt. level e enor to separate rom n tec ; see s new partner

Telenor seeking compensation from Unitech for damages

caused to their mobile venture

Russia also mounting pressure on the Govt. to protectforeign investors

Tata Teleservices to file review petition on SC order

Batelco, Bahrain telecom company, holding 43% stake in

S Tel, selling its entire stake to Siva group


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WAY FORWARD

Sibal All future licenses to be auctioned;

licenses not to be linked with spectrum

allocation; uniform license fee (8%)

, , , ,

Videocon demand two-stage auctions

Open access to spectrum to all eligible users

against a usage charge, which can beadjusted later

TELECOM WARS TO CONTINUE!!!


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Thanks!

www.time4education.com

2g spectrum scam 2012

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