Raja helped RComm get into GSM biz

RComm,Tata Tele got GSM licences at 2001 rates; Revision of rates was scuttled by the minister.

Former telecom minister A Raja outwitted his officials in awarding spectrum to the applicants of dual technology before other pending applications for GSM spectrum,a move which mainly benefited Anil Ambani’s Reliance Communications Ltd. The undue benefit has been highlighted in the report by the Comptroller and Auditor General of India (CAG).

Armed with a Trai recommendation that dual technology be allowed,which means allowing CDMA mobile operators to provide GSM services,Raja took the in-principle assent of his officials to ratify the proposal. The then telecom secretary DS Mathur and member (finance) Manju Madhavan suggested that GSM spectrum should be allocated to them only after drawing a chronology of other applicants as other GSM operators had been applying for spectrum from time to time. Also what should be the licence fee charged from them the old Rs 1,651 crore or be revised as suggested by Mathur,Madhavan and the finance ministry.

Raja said these issues could be discussed later. Then the information was leaked to RComm on October 18,2007,a day before the policy was announced enabling RComm to make the payment on October 19. The company was then given priority in allocating spectrum in January,2008 after both Mathur and Madhavan had retired. With Raja awarding the other new licences also at Rs 1,651 crore for pan-India operations,the same was charged from RComm and other applicant Tata Teleservices Ltd.

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The CAG report has documented the undue benefit shown to Rcomm thus,By taking the priority date of RComm as the date on which they had moved their application for use of alternate technology (when dual technology wasn’t even permitted) ie 2006,they were allocated start-up spectrum in 14 service areas ahead of four other operators who had applied for a telecom licence and whose applications were kept pending on the grounds of non-availability of spectrum.

The CAG report has concluded that the process followed by the department of telecommunications while introducing access to dual technology to the existing telecom operators in India lacked transparency and fairness. Equal opportunity was denied to others similarly placed operators who could apply for use of dual technology,only after the formal announcement of the policy.

The manner in which RComm was paid was hasty and not in order. RComm had compiled with the requirements for the permission to use dual technology on October 19,2007 itself by depositing the non-refundable entry fee of Rs 1,645 crore for 20 service areas through their sister concern Reliance Infcomm Ltd. Acceptance of the bank drafts for Rs 1,654 crore by the orders of Reliance Infocomm ( third party) on behalf of RComm was not in order and shows the hurry through which entry fee was deposited. As a result RComm could acquire the right for allocation of 2G spectrum in 20 service areas on the day the policy itself was announced, the report says.