Two dates that former telecom minister, Raja will rue

Hindu Business Line

Thomas K. Thomas

New Delhi, Nov. 15

The 2G spectrum scam has been on the boil for the past three years but September 25, 2007 and January 10, 2008 are probably the two days that exposed the former Communications and IT Minister, Mr A. Raja, to public scrutiny.

When the Communications and IT Ministry announced in mid-2007 that it had decided to bring in more number of mobile players in a bid to drive down tariffs and increase competition, everyone was ecstatic. Seeing the huge response from companies, the Department of Telecom on September 25 set October 1 as the cut-off date for receiving applications. In that one week, the DoT received 408 more applications taking the total to 575 from as many as 46 companies.

But just a month later, in November, the DoT issued another notice suddenly advancing the cut-off date to September 25. As a result of this one move, 408 applications, from the likes of AT&T, Hindujas, Sterlite and Moser Baer, got automatically disqualified leaving the field open to relatively unknown entities including Swan Telecom, Datacom and Loop Mobile.

Around the same time the Ministry of Finance repeatedly told the Telecom Ministry to consider auctioning the spectrum since there are so many interested applicants. According to a report by the Comptroller and Auditor General, Mr Raja ignored these suggestions and moved ahead to issue licences to only a few players at a throwaway price.

On January 10, 2008, the Ministry put out a press release at 2-45 p.m. that Letters of Intent (LoI) will be issued between 3-30 p.m. and 4-30 p.m. to companies that pay the entry fee first.

It resulted in total pandemonium at the Sanchar Bhawan here, the office of the DoT, as representatives of wannabe telecom companies literally got into fist fights and blows in a bid to be the first to get the letter of intent. What followed could make Bollywood stunts pale in comparison as some of the company representatives were physically thrown out of the line by rival applicant company.

The CAG report indicates that some of the applicants got advance information of the DoT action. “Some applicants were even ready with demand drafts drawn on dates prior to the notification of cut-off date and some had even managed securing bank guarantees. Evidently, these applicants, had advance information about the issue of this notification by the DoT which enabled them to take appropriate advance action in spite of the changed time limit for compliance from 15 days to about half a day,” says the CAG report. Even though Mr Raja maintains that he stuck to the first-come, first-served (FCFS) policy, the decision to award licence based on the time of paying fees on January 10, 2008 took away the relevance of the date of application and the sanctity of the declared FCFS policy