CAG, media helped create today's 2G mess: Sibal

Media-led “sensationalism” over the Comptroller and Auditor General’s (CAG’s) estimate of Rs 1.76 lakh crore of losses due to the allocation of telecom licences without auctions after 2008 was instrumental in “killing” the market for it, said Kapil Sibal, telecom minister.

He was defending the government for the lacklustre bids, far below the estimates, for spectrum in last week’s auction. This was a re-auction ordered by the Supreme Court after the latter had quashed the earlier allocations. The government and ruling party has been criticising the CAG’s estimate fo losses as having been without foundation. Sibal today, in an interview to the CNBC-TV18, said: “The CAG, I’m sure, had views in mind when he put out those figures. He must be convinced of that figure. We believe that by taking that figure of presumptive loss, the media sensationalised the whole thing.” Adding: “It resulted, ultimately, through a judgment of a court of cancellation of licences, which in turn...destroyed sentiment of the market, which in turn led to the situation that we are in today.”

The Empowered Group of Ministers (EGoM) on the issue, headed by finance minister P Chidambaram, will meet within a week to plan the next course of action after the lukewarm response to the recent auction.

On Friday, Sibal had said the government would do another auction for the unsold spectrum by March. It would also consider re-pricing of spectrum and strategy for auctioning CDMA spectrum. “We will have a meeting of EGoM within a week,” Sibal had said.

The government had got just Rs 9,407 crore (it had hoped for something close to Rs 40,000 crore) from the recent auction. No CDMA spectrum could be auctioned, as bidders had pulled out.

“The Supreme Court has told us to auction. We had no choice on the matter. Now, if the court thinks some other policy prescription is necessary, let the court tell us. The government has no choice. It was a final judgment of the Supreme Court,” said Sibal.

On the SC order seeking an explanation from his ministry on the amount auctioned and other details, Sibal said: “If the court asks (us) to provide an explanation, we will.”

On last year’s auction of third-generation (3G) auction, he said: “We got revenue and the consumers got nothing. There was no roll out. I don’t think that’s the end-purpose of any policy prescription. Ultimately, the consumers must benefit. The consumer must get an efficient service at reasonable prices.”

Sibal has also said the government had reached out to entities abroad to attract investments in the sector, denying allegations by Member of Parliament Rajeev Chandrasekhar that there were no efforts to make the auction successful.

“We didn’t do roadshows in 2001, 2008, 2010. We talked to all the international players. We talked to Australians. We talked to AT&T, we talked to DoCoMo,” Sibal said.

However, he added, CDMA was “a dying technology” and that was why “nobody is interested in CDMA”.