DoT questioned on excess spectrum allocation in 2002

The Central Bureau of Investigation (CBI) has asked the Department of Telecommunications (DoT) whether the allocation of additional spectrum beyond 6.2 MHz and up to 10 MHz required the Telecom Commission’s approval before it was cleared by then telecom minister Pramod Mahajan on January 31, 2002.

The CBI said the allocation with an incremental charge of just one per cent adjusted gross revenue led to a loss of Rs 508 crore to the exchequer.

The move has brought the focus back to various purportedly controversial decisions in the sector taken during the National Democratic Alliance (NDA) regime.

The DoT has been asked to clarify the issue by April 23 and told the matter is urgent, as the case investigation is being monitored by the Supreme Court.

Companies granted spectrum beyond 6.2 MHz included Vodafone, Airtel, Aircel, Loop and Idea Cellular, among others, in various circles.

The prevailing revenue share for telecom companies during the period under investigation was pegged at four per cent for 6.2-8 MHz and 8-10 MHz spectrum, with no differential rates. Only those with more than 10 MHz spectrum were charged five per cent. The DoT has said the difference - if the rate was pegged at five per cent instead of four per cent - would have been Rs 508 crore. In other words, the government would have earned that much additional revenue if its share had been pegged at five per cent. The CBI had said—while filing an FIR (first information report) against some of these companies—the decision to allocate additional spectrum had caused a loss of Rs 508 crore to the exchequer during 2001-07.

Earlier, CBI had asked DoT to give details of the adjusted gross revenue provided by unified access service licensees for all circles and operators, for additional spectrum above eight MHz, from 2002-03 to 2007-08.

The investigation is in response to a December 2010 Supreme Court directive to the CBI to look into any irregularity in the grant of licences between 2001 and 2007, with an emphasis on the loss caused to the exchequer and corresponding gain to licensees.

Accordingly, the CBI had initiated a preliminary inquiry in January 2011.

The agency had named Bharti Cellular (now Bharti Airtel), Hutchison Max & Sterling Cellular (now Vodafone Essar) in an FIR for alleged irregularities in spectrum allocation. The agency carried out raids on the premises of Bharti Airtel and Vodafone across Delhi, Gurgaon and Mumbai. It registered a case on the allocation of excess spectrum to the two telcos in 2001-02.

After five years of NDA rule, the United Progressive Alliance government came to power in 2004. According to the estimates of the Comptroller and Auditor General, the 2G scam under A Raja as the telecom minister allegedly caused a presumptive loss of Rs 1.76 lakh crore to the exchequer.