•Was there anything wrong in this entire exercise?

The DoT granted these licences on a first-cum-first-served basis. As per the policy, alongwith a licence, the cost of an all-India licence is Rs 1,651 crore, while bundled spectrum of 4.4 Mhz is also given. The majority opinion was that since spectrum is a scarce resource, the government should not allot it bundled with licence but rather auction it to realize the market value. Recently, two companies, Swan and Unitech sold 45 per cent and 60 per cent stakes respectively to foreign players at valuations of around $2 billion. Since these two companies do not have network, subscribers or knowledge of telecom business, it is inferred that the huge valuation is the price of a paper called licence and spectrum, which are radio waves required to operate mobile services. Critics maintain that this money could have come to the government, which it let forgo by doling out licence and spectrum at a price discovered in 2001.

•What does Raja have to say?

Raja maintains that he has not done anything wrong. He went by the Trai recommendation of no-capping and not auctioning 2G spectrum. With regard to awarding licence at a price discovered in 2001, he says that the Trai did not ask for revising it, and the Cabinet had approved the price in 2003 so he was perfectly right in sticking to it. Regarding the stake sales by the two companies, Raja says that the deal is as per the corporate laws of the country and the new operators require funds to roll out network and services. As an afterthought he has proposed to bar promoters of new licensee firms from selling their equity till a period of three years.

... contd.