•Is Raja right in his defence?

Yes and No. Yes, when he says that he went by Trai’s recommendation on no-capping and not auctioning of 2G spectrum. No, because he later inflicted a temporary capping policy, which is still in force. Raja is wrong when he says that he went with Trai regarding the price of awarding new licences. Trai in 2003 had categorically said that all new licences should be awarded through a multi-stage bidding. Even the August 2007 recommendation said that a realistic price should be determined through a market mechanism.

•What’s the difference between auctioning telecom licence and spectrum?

Historically, since the telecom sector was opened to the private operators in India, licences have been auctioned but spectrum has been bundled with it. However, companies pay a spectrum usage charge. If Raja would have auctioned the licence in the present case and given spectrum bundled with it, he would have been able to realize a market-determined price rather than a price discovered through auction in 2001. And the Trai recommendations did not stand in his way as far as auctioning of licence is concerned.

•Is there any other way these companies allegedly benefited through DoT?

Yes. A crucial recommendation of Trai with regard to mergers and acquisitions for new licensees was tweaked by the DoT, which led these companies to sell stakes. Trai had suggested that companies should not be eligible for mergers and acquisitions till they achieve their rollout obligations. Companies have to roll out networks covering 10 per cent of the circle by year one and 50 per cent by year three. However, DoT changed it and while it barred the companies for a total mergers and acquisitions till the end of year three, it allowed them to sell stakes up to 74 per cent before that. This helped Swan and Unitech to sell stakes even before they set up a single tower.