2G SPECTRUM SCAM

By:

Pratik GuptaShiven ChawlaNeha Sharma

Pavi YadavNikhil Mehrothia

Palak MehtaNitin Pharswan

What is 2G?• ‘2G’ means: “Second-Generation Wireless • Telephone Technology”

• 2G is relatively new technology in the field of mobile.

• 2G is not just a network but a good technology.

• 2G spectrum was the revolutionary technology in their time,• it comes with some more benefits.

1. SMS facility was first started with network.• 2. Safe for the use, means security level was high.• 3. Environmental conditions was very good for this network & no network

shortage was there.

What is 2G spectrum?

• What is spectrum? • What is its relation

with mobile phone services?

• What is the 2G spectrum ?

• Spectrum as a scarce national resource

Telecom operation is administered

Entire country is divided into 22 Telecom Circles

• All the seven sisterly states in the North East comes under a single circle called North East Circle

• For every Circle , a separate telecom license is issued.

• FCFS policy ???• Licenses with start-up

spectrum (4.2 MHz) were issued for mobile services

THE 2G SPECTRUM SCAM

• Gov. awarded 122 telecom licenses with 2G spectrum in Jan 2008 at 2001 rates (Rs 1,685 cr) ignoring the current market value of the spectrum.

• As a Result Mobile subscriber base had shot up to 350 million in 2008 from 4 million in 2001

In February 2007, Hutch sold its 67% equity to Vodafone at Rs 75,000 cr signalingsubstantial increase in spectrum value

T H E 2 G S P E C T R U M S C A M

After obtaining licenses at cheap rates, the private companies sold (diluted) their equities to foreign telecom companies at a very high price

• Shyam Telecom: Sold 74% to Sistema of Russia (MTS brand)

• - Unitech: Sold 67% to Telenor of Norway (Uninor brand)

• - Swan Telecom: Sold DB Group about 45% to Etisalat, UAE (Cheers brand) and

• 5% to Genex, Chennai• - Tata Teleservice: Sold 26% to

NTT of Japan (DoCoMo brand)

Financial Loss Category Loss as per CAG

New 2G value(R s. in Crore)

122 New licences 1,02,498

35 Dual Tech Licences 37,154

Spectrum Held in Excess of 6.2MHZ 36,993

Total Loss 1,76,645

Role of the former telecom minister in this scam?

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 4million 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.

Were senior officers involved in this scam?

• Two top most officers of DoT • Mr D.S. Mathur, Secretary-

DoT, • Ms Manu

Madhavan,Member (Finance), DoT.

• Did not agree with A Raja’s approach.

• Retired on December 31, 2007.

• Appointed Mr Siddhartha Behura as Secretary (DoT). Who completely followed his instructions.

Steps taken by Government after Scam

• Set up a special branch of CBI to look into the matter.

• Telecom Minister resigns his post after Scam.

• A Raja also arrested by the CBI.

• CBI also arrested Mr Siddharatha Behura

• (Secretary-DoT), and Mr RK Chandolia (PS to Mr Raja) r A Raja,

What Should be done ?

• What must the government do to recover this loss?

• If the government recovers the money from the operators/cancels licenses, will it

lead to a rise in tariff?