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CBI: Airtel gained most from 2002 move to allot extra spectrum

Thomas K Thomas
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Spectrum beyond 6.2 Mhz without revenue share hike cost exchequer Rs 846 cr

The Central Bureau of Investigation has alleged that the decision to allocate additional spectrum to mobile companies in 2002 was a conspiracy to benefit Bharti Airtel.

In an internal note to the Department of Personnel and Training seen by Business Line, the anti-corruption branch of the investigating agency has stated that it had prime facie evidence that the role of Bharti Airtel was more as compared with other players that had also benefited from the policy decision.

The case dates back to 2002 when the Telecom Ministry, under Pramod Mahajan, introduced new spectrum allocation rules based on subscriber linked criteria. While the technical committee of the Department of Telecom had recommended allotting additional spectrum beyond 6.2 Mhz only after the operators reached subscriber base of 9 lakh, the requirement was reduced by the DoT to 4 lakh.

“It is relevant to note that only Bharti Cellular had reached the subscriber base of 4 lakh as on 31 December, 2001 and of 5 lakh on 31 January 2002, that is on the day the said decision was taken,” the CBI said in the note. According to the CBI, the decision to give additional spectrum without suitable increase in revenue share caused undue advantage of Rs 846 crore to various mobile companies but half of this was on account of Bharti Airtel.

Sunil Mittal’s role

The CBI said that investigations have revealed that Sunil Bharti Mittal, Chairman of Bharti Airtel, met Shyamal Ghosh, then Secretary of DoT, and the late Pramod Mahajan regarding this issue. The then private secretary to Mahajan has disclosed that in a high-level meeting, technical officers had said that better use of technology could avoid grant of additional spectrum.

But the Minister insisted that grant of additional spectrum was necessary for growth and on the same day a decision was taken to allocate additional spectrum. The CBI has, however, added that during investigation no evidence has emerged indicating any overt act or criminal intent on the part of any person belonging to the telecom companies that benefited from the policy decision.

The investigating agency has already filed an FIR against Shyamal Ghosh and J.R. Gupta, the then Deputy Director-General of DoT, for entering into a criminal conspiracy with Bharti Airtel and Hutchison Max (now Vodafone India). The investigating agency has alleged that Gupta put up a note on January 31, 2002 “wrongly” mentioning that a consensus had emerged on allocating additional spectrum. The final approval was given by Mahajan on the same day “in haste”.

The CBI has stated that investigations have revealed why such an undue was shown. “Airtel’s IPO was open and immense interest would have followed on such allocation of additional spectrum… the number of share applied for on the very next day disproportionately increased,” the note states.

But there are differences of opinion among the investigating officers on the legal way forward and, therefore, the CBI has asked the views of the Attorney-General on a number of issues, including whether a case can be made out against Sunil Mittal for prosecution along with the government officers.

Bharti Airtel declined to comment.

Thomas.thomas@thehindu.co.in

(This article was published on November 6, 2012)
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Comments:

This is what i have been alleging in many forums eversince airtel entered the fray.Airtel's dubious and in hiking subscriber's base and also windowdressing its books of accounts should be investigated thoroughly.promod was bribed heavily to obtain whatever they want.

from:  Karunanithi
Posted on: Nov 7, 2012 at 06:33 IST
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