India's Biggest Scam – 2G Telecom Spectrum Scam – The Story So Far


Estimates have varied from R1,76,000 crore to zero loss.

The 2G telecom spectrum scam is arguably the most high-profile corruption case in Indian history ­ valued at as much as R1,76,000 crore by the Comptroller and Auditor General (CAG) ­ in which former cabinet minister A Raja and former telecom secretary S Behura are behind bars in Delhi’s Tihar jail.

Here’s the lowdown:

What’s the allegation 

The department of telecom (DoT), headed by Raja, it has been alleged, decided on who should be given the licences much before the bids had come, exploiting loopholes in the existing first-come-first-served (FCFS) policy.

Telecom firms, it has been alleged, were awarded 122 licences arbitrarily and granted 2G spectrum (radio frequency) in 2008 at extremely cheap rates, robbing the government of revenue.

Four months of telecom tangle

September 24, 2007: Four months after he took over as the telecom minister, DMK’s A Raja (pic) triggered a mad scramble for telecom licences.
The department of telecom issued a press statement giving companies a week to apply for mobile phone licences.

October 1, 2007: As many 575 applications are received as little-known firms jostle to get a slice of India’s booming telecommunications pie.

October 19: DoT clarifies there was going to be no cap on the number of the unified access service licence, or UASL, holders in any of India’s 22 telecom circles.
UASL is a single licence that allows companies to offer a host of telecom services including landline, mobile phone, internet access services and satellite data services

October 26: The Telecom Commission seeks the opinion of the attorney general or solicitor general of India on the issuance of new UASLs and the use of dualtechnology and suggests that only the firms that applied before September 25, 2007, should be eligible for licence and spectrum.
Experts tracking the developments say the date was advanced to suit one particular company.

November 1: Law minister HR Bhardwaj (pic) writes to Raja arguing that it is necessary that the issue of telecom licence and spectrum allocation be first considered by an empowered group of ministers (eGoM).

November 2: Raja writes to Prime Minister Manmohan Singh, rebutting Bharadwaj’s proposal, stating that the law ministry’s opinion was out of context.
The prime minister replies to Raja the same day, asking Raja to consider the introduction of a transparent methodology of auction

December 26: Raja writes to Prime Minister, stating that discussions with the external affairs minister and the solicitor general (GE Vahnavati) had “further enlightened“ him to take a pre-emptive and proactive decision on the issue. Action starts January 3, 2008 The PM (pic) wrote back to the communications minister, acknowledging the receipt of the letter. “I have received your n received your note on the developments on the telecom sector,“ Singh wrote in a single-line response..

January 7: DoT adds a twist to the first-come-firstserved policy. Those who applied on September 25, 2007, would be eligible for licence and spectrum, but there was a catch. The order in which they would get it would depend on who first fulfilled the slew of qualifying conditions.

The conditions: Producing documents to verify terms of the licence and the R1,651 crore bank draft.

January 10: At 1.47 pm, the DoT issues a press release, fixing September 25 as the cut-off date for applicants to be eligible for licences.
About an hour later, at 2.45 pm, the DoT issues a second press statement asking all applicants to report to the Committee Room of New Delhi’s Sanchar Bhawan at 3.30 pm.
The applicants were required to pay the R1,651 crore to the govt upfront.
Those who paid first and furnished documents would be the first to be issued a letter of intent, or LoI, and be the first in the queue for the grant of spectrum.
The applicants were thus given 45 minutes to get a bank draft issued and delivered at a specially set-up counter in Sanchar Bhawan.
By 5.30 pm, the DoT issued 122 new telecom licences, ignoring advice from other ministries and bypassing the Cabinet and other forums of inter-ministerial consultations.

DoT & Raja’s defence

The government has only followed a policy of the preceding NDA government that had endorsed the firstcome-first-served policy.

SC verdict

The SC cancels the 122 2G spectrum licences granted on January 10, 2008 Imposes penalty ranging from R50 lakh to R5 crore on licencees.


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