The telcom sector in India is in a tangle because of a thickening controversy surrounding allocation of spectrum, the air waves on which data travel. As charges and counter-charges fly over government selling spectrum cheap, Rishi Raj splits the various hues and shades of the spectrum imbroglio:

•Why is it being alleged that communications minister A Raja granted licence and spectrum to a host of new players at throwaway prices, causing loss to the state exchequer?

It all began around middle of last year when the Department of Telecommunications (DoT) sough the Telecom Regulatory Authority of India’s (Trai’s) recommendation on whether the existing policy of having unlimited telecom players in a circle should be continued. DoT had also sought to know Trai's mind on a host of other issues like mergers and acquisitions, use of dual technology and roll-out obligations. While submitting its recommendations in August 2007, Trai said that the government should continue with the policy of no-capping with regard to entry of new players. It also said that 2G spectrum in 800, 900 and 1800 Mhz should not be auctioned while spectrum in all the other bands should be auctioned. As soon the recommendations were made public, a host of firms, mostly with no prior experience in telecom and some shell companies, submitted applications for telecom licences. Though the government accepted the Trai’s recommendation of no-capping, seeing the deluge of applications it put a temporary bar by not accepting applications after October 1, 2007. Then, the DoT issued licences to only those firms, which had applied till September 25, 2007 and companies such as Swan, Unitech, Datacom, Loop Telecom, S Tel benefited from this. These companies have been granted/being granted spectrum on a circle basis.

... contd.