Press Esc to close

What is the 2G spectrum scam about?

Last updated: 15 November, 2010
New Delhi, Nov 15 (IANS) 13:32 IST

Here is a background on the 2G spectrum controversy that resulted in Communications and IT Minister A. Raja of DMK resigning Sunday:

The issue dates to 2008 when nine telecom companies were issued scarce airwaves and licences for second generation (2G) mobile phone services at Rs.1,658 crore (less that $350 million) for a pan-India operation. As many as 122 circle-wise licences were issued.
The opposition said that by giving the airwaves cheap, that too in the controversial manner of first-cum-first-served basis, the exchequer had lost billions of dollars. The cut-off date for applications was also arbitrarily advanced.

Later, based on the auction of airwaves for third generation (3G) services, which got nearly $15 billion to the exchequer, and that for broadband access, which fetched over $8.5 billion, the notional loss was estimated at $38 billion to the exchequer.
But Prime Minister Manmohan Singh himself defended Raja’s decision and said May 24 that all that his communications minister had done was to implement a policy already in place and none of the norms were flouted.

The opposition further stepped up its attack with two examples on 2G auction:
- A new player, Swan Telecom, bought licences for 13 circles with the necessary spectrum for $340 million but managed to sell a 45-percent stake in the company to UAE's Etisalat for $900 million. This swelled its valuation to $2 billion without a single subscriber.

- Another new player, Unitech, paid $365 million as licence fee but sold a 60-percent stake to Norway's Talenor for $1.36 billion, taking its valuation to nearly $2 billion, again without a single subscriber.

Similarly, another licensor, Datacom, later became Videocon Mobile and Stel now has large stake by Baharian Telecom. The other companies are Tata Tele, Idea Cellular, Loop Telecom, Shyam Telelink and Spice.

As recently as last month, the Supreme Court asked the solicitor general why the prime minister had not responded to the representation by the opposition to sanction proceedings against Raja.

The final blow came after the Comptroller and Auditor General of India said the entire process of spectrum allocation was undertaken in an arbitrary manner and that the advise of the industry watchdog was ignored and misused.

Go to Top

Photo Gallery
Indian Air force paratroopers perform maneuvers at Bamhrauli Air station as the Indian Air Force ...

Indian Air force paratroopers perform maneuvers at Bamhrauli Air station as the Indian Air Force ...

Indian Mens Hockey team celebrates their birth in the final of the Hero Asia Cup 2017 with a...

Indian Mens Hockey team celebrates their birth in the final of the Hero Asia Cup 2017 with a...

Prime Minister Narendra Modi on the maiden voyage of Ro-Ro Ferry Service between Ghogha and Dahej...

Prime Minister Narendra Modi on the maiden voyage of Ro-Ro Ferry Service between Ghogha and Dahej...

India's Kuldeep Yadav celebrates the wicket of New Zealand batsman Kane Williamson during the...

India's Kuldeep Yadav celebrates the wicket of New Zealand batsman Kane Williamson during the...

External Affairs Minister Sushma Swaraj with Bangladesh Prime Minister Sheikh Hasina at a ...

External Affairs Minister Sushma Swaraj with Bangladesh Prime Minister Sheikh Hasina at a ...

Spain's Garbine Muguruza in action during her group stage match against Latvia's Jelena Ostapenko...

Spain's Garbine Muguruza in action during her group stage match against Latvia's Jelena Ostapenko...

Meng Meng, one of the two giant Chinese panda bears, is seen at the Zoo in Berlin, Germany July 5...

Meng Meng, one of the two giant Chinese panda bears, is seen at the Zoo in Berlin, Germany July 5...

Father Nicolas Maine blesses bikers' helmets during a

Father Nicolas Maine blesses bikers' helmets during a "Blessing of the Bikes" ceremony at Saint...

Arsenal's Sead Kolasinac in action with Everton's Nikola Vlasic during Premier League match at ...

Arsenal's Sead Kolasinac in action with Everton's Nikola Vlasic during Premier League match at ...

A volunteer uses a water hose to fight a wildfire near houses on the outskirts of Obidos...

A volunteer uses a water hose to fight a wildfire near houses on the outskirts of Obidos...

Like us on Facebook

Copyright 2017, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bengaluru - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523
Powered by Yodasoft Technologies Pvt. Ltd.