CVC questions spectrum allocation

‘This is a highly unethical practice and necessary action in this regard is essential’.

The Central Vigilance Commission (CVC) has sought details of the government policy of allotting all-India licence and spectrum to new telecom firms for Rs 1,658 — a policy that has attracted criticism from political parties.

The commission’s action comes in the wake of two new firms, Swan and Unitech, selling a part of their stake to foreign players at a huge premium to what they paid for the licence and spectrum.

“They (Swan and Unitech) have hardly made any progress in operationalising the licences. Swan is reported to have sold its 45 per cent equity for $900 million (Rs 4,050 crore) to Etisalat, while a pan-India licence costs Rs 1,650 crore. This is a highly unethical practice and necessary action in this regard is essential”, said Central Vigilance Commissioner KS Ramasubban. He has written to Telecom Secretary Siddartha Behura seeking details of the spectrum allocation policy.

The CVC has also pulled up telecom regulator Trai for not advising the Department of Telecom on spectrum allocation. Seeking details from the DoT, the CVC said, “The department may follow an auction process for allocation of balance 2G spectrum even though the available spectrum is of meagre quantity.” The CVC has strongly objected to some licensees selling equity at high values even before starting operations.

The commission said it was not satisfied with the DoT’s earlier reply to these issues and asked the DoT secretary to look into the matter personally.

“The commission should therefore be apprised of the action the DoT has taken /proposes to take against such licensees. Any delay or reluctance/delay in initiating corrective action (if at all) will only send a wrong signal, besides leading to loss to the national exchequer,” it said.

Trai has also drawn the ire of the CVC for allegedly failing in its function. “The commission observes that Trai as regulator has failed in its functions as required under the Trai Act, 1997. It needs to be ascertained from Trai as to why it failed to intervene and give advice to the government on the issue of efficient management of spectrum.”

“Had Trai given suo moto advice on this critical issue (which was expected of them), the government would have become wiser in the process of allocation of spectrum from 6.2 MHz to 10 Mhz and beyond. This would have enabled the government to realise a higher/reasonable price for spectrum beyond 6.2 MHz”, it said.