2G spactrum scam and CAG report.

What is 2G SPECTRUM?

2G is short form of Second generation; 2G stands for the second generation phones. The first introduced mobile phone series were named "1G", 2G is the successor of 1G phones which was introduced in Finland by Radiolinja in 1991. 2G phones are specified by the standard GSM.GSM stands for Global system for Mobile phones, this standard enabled the user to use handset in any part of the world called Roaming Facility.The actual difference of 1G phones was in its Signaling and it used digital Channel to communicate, .This enabled the data communication (text messaging).The frequency range of 2G Spectrum is from 900MHz to 1800MHz.

What is 2G Spectrum Scam..??

India upgraded from 1G phones only from 2008, the 2G phones was going to be introduced. Govt planned to allocate the spectrum for the Service providers. Telecoms minister A.Raja introduced unique procedure for allocation, he allocated by first in first served policy. What Mr A. Raja has done is that, he given away the spectrum to his favorites, important thing to note that Karunanidhi's family holds large share of Telecoms and Television Networks in Tamilnadu. The spectrum was sold in the price of 2001,in 2008. The loss from 2G spectrum allocation is about Ra 1.76 lakh Corers, Rs 1400 per man in the country.What makes this big is that,the amount country loose in 2G Spectrum allocation is more than India annual income From Export Business.

This deal was in the interest of top Corporates in the Country, telecoms Ministry brushed aside all the the Guidelines and proceeded to issue 122 new license for 2G spectrum at 2001 price. The major beneficiary of this deal was Reliance and Tata, it is evident from the tapes that having the conversation between Corporate middle men and Minister A.Raja.

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 begun

Cut-off date for applications advanced by a week

Licenses issued on a first-come-first-served basis

No proper auction process followed, no bids invited

Raja ignored advice of TRAI, Law Ministry, Finance Ministry

TRAI had recommended auctioning of spectrum at market rates

FAVOURITISM, 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

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 60% stake for Rs 6200 crore

All nine companies paid DoT only Rs 10,772 crore for 2G licences

Who is to Blame..??

The Ruling party can never shy away from this, because they are the authority to make decision. Congress party president and Prime Minister manmohan singh never commented on this issue until the supreme court asked, it is a Question mark on the Credibility of Manmohan singh. He took 16 months to reply Janatha Pary President Mr Subramaniam Swami's letter on 2G Scam.

It is always the DMK ministers who are corrupts in First UPA Govt it was Mr Balu now it is A.Raja. Congress will hesitate to take action against DMK, because if DMK withdraws support to the center the govt may collapse. Congress wont wont stand by the national interest because they have their own, indian corporates are the financial source of Congress. It is this corporates who even decides the ministers at the center, and how Congress can act against them.

How the Scam Came Out..!

The Nexus Between the Media and Corporates are so strong that, the top English channel in India even ignored the 2G Spectrum Scam. The whole credits to bring out the scam in to light goes to Janatha party president Mr Subamaniam Swami who filed an affidavit in the Supreme court, CPI(M), CPI,BJP and all the left parties who raised this issue in the Indian parliament, and the Malayalee media person J Gopikrishnan who brought the Nexus between Media and Corporates.

CAG report

"85 of the 122 licenses were issued to companies which suppressed facts, disclosed incomplete information and submitted fictitious documents to DoT and thus used fraudulent means of getting licenses and thereby access to spectrum"  -this is one of the more biting conclusions of the report prepared by the government's auditor, the Comptroller and Auditor General (CAG).

It is unflinching in its indictment of Raja, blaming him for violating guidelines, indulging in favouritism and costing the government Rs. 1.76  lakh crores by mishandling the allocation of 2G spectrum in 2008.

"2G spectrum was allocated beyond contracted quantity to 9 firms including Bharti, Vodafone, Idea, BSNL, Reliance, Aircel," the report said.

It says that the Department of Telecommunications (DoT) circumvented the rules to help Swan Telecom, which effectively acted as a front for Reliance Telecommunications.   The charges in the CAG report are that Swan should not have been considered for a license because Reliance Communications held 10.7% stake in Swan - and according to the rules, a telecom operator cannot own more than 10% stake in another telecom company operating in the same service area. "Email ID of Swan Telecom was shown as that of a Reliance ADA group official," said the report.

The application should have been rejected by the Department of Telecom (DoT), according to the CAG report. "DoT did not follow its own practise of first-come-first-serve in letter and spirit," it said.

The report also says that Reliance Telecommunications was among those who got undue benefits, and that Reliance was allotted spectrum ahead of the others.  According to CAG, Idea and Spice were wrongly denied spectrum on the grounds of a proposed merger.

Reacting to the charge, Reliance Communications spokesperson stated: "Our Group had no shareholding in Swan Telecom Ltd. (now known as Etisalat DB Ltd.) at the time of grant of license to them or any time thereafter, and that issue is accordingly not relevant to our Company. Reliance Communications has always been in full compliance with all applicable laws, rules and regulations, and there has been no violation of our license conditions at any stage on account of cross-holdings in excess of 10%."

CAG indicts Unitech Wireless

Another big beneficiary of the 2G spectrum allocation was Unitech Wireless, which had no experience in the telecommunication sector. After Unitech got the license for a throwaway price of Rs. 1,661 crore, it sold 60 per cent stake to  Telenor Asia for a whopping Rs. 6,200 crore. In its report, CAG indicts Unitech saying the high value paid by Telenor was for the 2G spectrum, and not for other inputs as claimed by Unitech. It also says that such huge equity infusion, which should have accrued to the public exchequer, went as a favour to the new licensees for enriching their business.

Raja Ignored PM's Advice, Says CAG Report

"The Honourable Minister of Communication & IT, for no apparent logical or valid reasons, ignored the advice of Ministry of Law and Ministry of Finance, avoided the deliberations of the Telecom Commission to allocate 2G spectrum, a scarce finite national asset at less than its true value on flexible criteria and procedures adopted to benefit a few operators."

The report also says Raja ignored the PM's advice. "The PM had stressed on the need for a fair and transparent allocation of spectrum..... Brushing aside the advice, the Department of Telecom (DoT) in 2008 proceeded to issue licenses for 2G spectrum at 2001 prices, flouting all rules and procedures," said the CAG report.

View full CAG report on

http://drop.ndtv.com/pdf/CAG.pdf