The number of licences to be cancelled should be 178 and not 122
The 2G scam has been colossal. But the real beneficiaries of the 2G scam are not the so-called cancelled 122 licences, but 56 other licences which have not be cancelled due to a flawed recommendations of Trai dated August 28, 2007, and subsequent interpretations of the Supreme Court verdict by the policy makers.
The owners of these 56 licences are getting away scot-free with spectrum at 2001 prices, although all of them received spectrum after January 10, 2008. These 56 licensees are: Aircel (14), Vodafone (6), Idea (2),Tata (19) and Reliance Communications (15).
The Supreme Court judgment dated February 2, 2012, is very clear that all licences and spectrum allocations to the applicants before, on and after September 25, 2007, are illegal and quashed. Therefore the number of licences that needs to be cancelled is 178 and not 122 as claimed by the Government.
No licence has ever been given without bidding or an auction. It was in December 2005 that the government created a loop hole in the licencing regime by doing away with licences with spectrum and creating a licence which had an entry fee of 2003, but spectrum to be distributed as and when available. On the face of it, a very innocuous change, but is the root cause of the mess that we see today. This was without any consultation with TRAI. This is the genesis of so called First Come First Served policy (FCFS) and the start of distribution of licences in 2006 to Aircel, Idea and Vodafone. Although licences were given in 2006, 21 of these 22 licences were allocated spectrum on or after January 10, 2008, hence, in spirit and intent, these licences are very much covered by the Supreme Court judgment.
Then there were these second set of licences, of Tata Teleservices and Reliance Communications, which were mischievously manipulated by then authorities in the name of rural roll out. This manipulation was incorporated as a part of the August-2007 TRAI Recommendations. There were two key stipulations before 2007: 10% cross holdings, in the same area of service, and upfront choice of technology for providing a type of cellular service either GSM or CDMA. Reliance in their chivalrous way chose CDMA in 2001 to make a backdoor entry into full mobility to their detriment later. Reliance had received and entered the full mobility licence through a backdoor in 2003, resulting in complete revision of the policy. Having realised their folly of a wrong choice of technology they subverted the system again in 2007 to get a combination of technology in the name of rural penetration and Aam Aadmi. Tatas followed suit to get full mobility in 2003 and again in 2008, but the damage, the change in landscape of competition and cheating the nation was unprecedented. The then regulator played a crucial role in 2003 by using Aam Aadmi and third party interests of the CDMA consumers, avoiding harsh decisions to cancel these illegal, illegitimate licences of both Reliance and Tatas, then.
To any righteous mind the Supreme Court judgement is crystal clear that all 178 are illegal and hence quashed. A simple read of The Supreme Court Judgment at Para 81(i) does not mention any number of the cancelled licences but states that the licences issued and spectrum allocations on or after 10th January 2008, as a result of these two press releases of January 10, 2008 are declared illegal and are quashed. The mandarins and shenanigans of the Government have conveniently assumed the number as 122, though the number has always been 178. These 56 licensees who also received their spectrum post 10th January 2008 and who are the real beneficiaries are laughing all the way, because of the naivety and folly of the government aided by flawed August-2007 TRAI recommendations.
Having savoured the success of an engineered failure of the 12th November 2012 auction, the least the Government can do to redeem their gross injustice to the nation, the Aam Aadmi and abdication of fiduciary responsibilities is to ask these 56 licensees to immediately cough up the reserve price. Had they been allowed to participate in the auction, the same auction would have been a roaring success. Logic defies the government’s thinking of recognising these 56 licenses as legitimate.
This leads me to conclude that this Government is behaving like a pigeon with eyes shut oblivious to the fact that the tiger of corruption is gnawing at them. Why must they behave like that and for whose benefit and for how long?
(The writer is Former CMD Videsh Sanchar Nigam Ltd. Views are personal)