Major Scams in Telecommunication Sector

A project submitted in the partial completion of the said degree

Submitted By:
Navin James

Submitted to :
Ms. Prachi Rashmi

A3221610042
[Link](H)
9TH Sem

Introduction
In 2008, the Central Government of India granted 122 telecom licenses to various companies
in response to 575 applications for licenses. In a report in 2010-11, the Comptroller and
Auditor General (CAG) of India concluded that the allocation of these 122 licenses was
characterised by policy gaps and irregularities in procedure. The Government was criticised
for cherry-picking the telecom regulators recommendations; for ignoring market based
mechanisms like auctions; and for administratively allocating licenses at prices discovered in
2001 on the pretext of providing a level playing field with incumbent operators. The
estimated loss by the CAG according to three different estimates ranged from Rs 53523 to
139652 crores. Media coverage of the report and license allocation, hyped as the 2G Scam,
was followed by public outrage and protests. On the 2nd of February 2012, the Supreme
Court of India, in response to a Public Interest Litigation (PIL), cancelled all 122 telecom
licenses granted in 2008 and directed that the spectrum linked with these licenses be
auctioned.
The verdict took the telecom industry by surprise and left the Government running for cover.
The unaffected incumbent operators praised the verdict for giving a blank slate to the
Government - an opportunity to chalk out a fresh concrete policy for efficient management of
spectrum and maximization of government revenues. The affected licensees, however,
complained that the Supreme Court left a question mark with respect to the future of
operators who had already rolled out their networks. Many investors such as the Telenor
Group (of Uninor) had already invested over Rs 6,100 crores in equity and over Rs 8,000
crores in corporate guarantees as a foreign investor that trusted a telecom licence stamped by
the Government of India. The company had appealed to the government for a solution so that
its customers are not affected by the verdict. ''We also expect the authorities to ensure that our
36 million customers, 17500 workforce and 22000 partners are not unjustly affected,'' said
Uninor . A few other foreign investors even threatened to invoke foreign investment treaties
to indemnify their losses. Some others have decided to write off the losses and exit the
market completely.
Industry experts fear that the reduced competition by the mass cancellation of licenses is
expected to lead to an increase in tariffs in the near future. Further, experts also fear that a
few telecom infrastructure companies are expected to become unsustainable as their primary
customers were the cancelled licensees.
The Supreme Court ruling comes in a scenario wherein telecommunications in India is torn
between the New Telecom Policy of 1999 (NTP 1999) and the Draft New Telecom Policy of
2011 (DNTP 2011), which is yet to be finalised and notified in February 2012. In these times
of uncertainty, all stakeholders look towards the Central Government for guidance with very
high expectations.

Background
India is divided into 22 telecommunications zones with 281 zonal licenses in the market.[13]
In 2008, 122 new second generation (2G) Unified Access Service (UAS) licenses were given
to telecom companies at the 2001 price and on a first-come-first-serve basis. As per the
charge sheet filed by the Central Bureau of Investigation (CBI), several rules were violated
and bribes were paid to favour certain firms while awarding 2G spectrum licenses. The audit
report of Comptroller and Auditor General of India (CAG) says that several licenses were
issued to firms with no prior experience in the telecom sector or were ineligible or had
suppressed relevant facts. 1In November 2007 former Prime Minister of India Dr Manmohan
Singh had written a letter to telecom minister A. Raja directing him to ensure allotment of 2G
spectrum in a fair and transparent manner and to ensure license fee was properly revised.
Raja wrote back to the prime minister rejecting many of his recommendations. 2 In the same
month Ministry of Finance wrote a letter to Department of Telecommunications (DOT)
raising concerns over the procedure adopted by it but DOT went ahead with its plan of giving
2G licenses. It advanced the cut-off date to 25 September, from 1 October 2007. Later on the
same day, DoT posted an announcement on its website saying those who apply between 3:30
and 4:30 pm on that very day would be issued licenses in accordance with the said policy.
Companies like Unitech and Swan Telecom got licenses without any telecom experience.

Swan Telecom got the license even though it did not meet eligibility criteria. 3Swan got a
license for INR15.37 billion (US$250 million) and then it sold 45% stake to UAE-based
company Etisalat for INR42 billion (US$690 million). Unitech Wireless, a subsidiary of the
Unitech Group, got license for INR16.61 billion (US$270 million) and later sold 60% stake
for INR62 billion (US$1.0 billion) to Norway-based company Telenor.

Following is the list of companies who received 2G licenses during the tenure of A. Raja as
Telecom Minister.(The licenses were later quashed by Supreme Court)

1 [Link]/business/slide-show/slide-show-1-tech-what-the-cag-report-on-2g-scamsays/[Link]

2 [Link]

3 [Link]

Major Findings
1. Gap in policy implementation:
In August 2003 TRAI had submitted a Report recommending a road map for allocation
oflicences. This Report formed the basis for the UAS policy approved by the Council of
Ministers in October 2003. The implementation of UASL regime was to be carried out in two
phases with first phase of six months assigned for migration of already existing Basic Service
Operators (BSOs) and Cellular Mobile Service Operators (CMSOs) to the new regime. The
entry fee for migration of BSOs was determined as the fee equal to what was paid by the
fourth cellular operator introduced through multi-stage bidding process in 2001. CMSOs
were not required to pay any entry fee for migrating as they had already entered the market
through a bidding process and thus paid a market determined price.
The second phase was to start after the first phase in which a Unified Licencing regime, with
a nominal entry fee for the licence with the spectrum being charged separately, was
envisaged.
However, Audit examination reveals that the Department of Telecom did not implement the
licensing regime as approved by the Cabinet and implemented only the first phase of the
policy, overlooking the second phase. In the actual implementation, the interim stage of
implementation seems to have become the final destination. This appears to have become the
underlying factor, quite erroneously, to value the spectrum in 2008 at 2001 prices. An
important objective of this policy decision to delink the prices of spectrum from the issue of
licence and devise an efficient allocation formula for spectrum along with an appropriate
price, remained unachieved. Ministry of Finance was authorized by the Cabinet decision of
2003 to participate in the discussion for efficient allocation of spectrum and price fixation but
DOT decided not to associate the Ministry of Finance.
As a consequence of such lacunae in the implementation of the policy laid down by the
Council of Ministers in 2003 the issuance of licences in 2008 along with allocation of
spectrum has been done by DoT at prices determined in 2001 which were based on a totally
nascent market despite the sector witnessing substantial transformation and manifold growth.
The issue was never placed before Cabinet for a review.
4

2. Telecom commission not consulted; Finance ministry overruled; Advice of Law ministry
and Prime ministers office ignored.
4 CAG Report No 19 of 2010-11, at page iv.

3. Issue of license to ineligible applicants; Arbitrary changes by DoT in the cut-off date.63
4. FCFS policy was not followed:
The First Come First Served (FCFS) policy earlier internally adopted in DoT for allocation
of spectrum, was then extended for issue of new UAS licences. Under this policy, all
applications are registered in the Central Registry Section of DoT where date of receipt and
serial numbers are posted on it. Priority of applications is determined based on this date of
receipt in the Central Registry. In a communication dated 2nd November 2007, the Hon'ble
MoC&IT had even confirmed to the Hon'ble Prime Minister that the processing of
applications was to be on the FCFS basis. However, audit found that DoT deviated even from
the FCFS policy in letter and spirit. The applications submitted between March 2006 and
25th September 2007 were issued the LoIs simultaneously on a single day, viz. 10th January
2008. 5A notice was issued through a press release giving less than an hour to collect the
same. This decision to issue LoIs simultaneously to all applicants was taken at the level of the
Minister. As per the FCFS policy being followed those who were issued LoIs were given 15
days to fulfil the conditions. This included submission of a Performance Bank Guarantee
(PBG) and a Financial Bank Guarantee (FBG). By changing the FCFS criteria, some
licensees, who could proactively anticipate such procedural changes were ready with the
Demand Drafts drawn on dates prior to the notification of cut off date by DoT and could avail
the benefit of first right to allocation of spectrum, having jumped the queue. The entire
process followed lacked transparency and objectivity and has eroded the credibility of DoT.

5 CAG Report No 19 of 2010-11, at page vii.

The Supreme Court Judgement

In a Public Interest Litigation (PIL) filed by organisations like Centre for Public Interest
Litigation, Telecom Watchdog and activists like Dr. Subramanian Swami, the following
issues were raised before the Supreme Court:
Issues
1. Whether the recommendations made by the Telecom Regulatory Authority of India (TRAI)
for grant of Unified Access Service (UAS) Licence with 2G spectrum at the price fixed in
2001, which were approved by the Department of Telecommunications (DoT), were contrary
to the decision taken by the Council of Ministers in 2003?
Although, while making recommendations on 28.8.2007, TRAI itself had recognised that
spectrum was a scarce commodity, it made recommendation for allocation of 2G spectrum on
the basis of 2001 price by invoking the theory of level playing field. Paragraph 2.40 of the
recommendations dated 28.8.2007 shows that as per TRAIs own assessment the existing
system of spectrum allocation criteria, pricing methodology and the management system
suffered from number of deficiencies and there was an urgent need to address the issues
linked with spectrum efficiency and its management and yet it decided to recommend the
allocation of spectrum at the price determined in 2001. All this was done in the name of
growth, affordability, penetration of wireless services in semi urban and rural areas, etc.
Unfortunately, while doing so, TRAI completely overlooked that one of the main objectives
of NTP 1999 was that spectrum should be utilised efficiently, economically, rationally and
optimally and there should be a transparent process of allocation of frequency.... We also
consider it necessary to observe that in todays dynamism and unprecedented growth of
telecom sector, the entry fee determined in 2001 ought to have been treated by the TRAI as
wholly unrealistic for grant of licence along with start up spectrum. In our view, the
recommendations made by TRAI in this regard were contrary to the decision of the Council
of Ministers that the DoT shall discuss the issue of spectrum pricing with the Ministry of
Finance along with the issue of incentive for efficient use of spectrum as well as disincentive
for sub-optimal usages.6
2. Whether the policy of first-come-first-served followed by the DoT for grant of licences is
ultravires the provisions of Article 1473 of the Constitution?
There is a fundamental flaw in the first-come-first-served policy inasmuch as it involves an
element of pure chance or accident. In matters involving award of contracts or grant of
6 Writ Petition (Civil) No. 423 OF 2010 with No. 10 OF 2011

licence or permission to use public property, the invocation of first-come-first-served policy

has inherently dangerous implications. Any person who has access to the power corridor at
the highest or the lowest level may be able to obtain information from the Government files
or the files of the agency/instrumentality of the State that a particular public property or asset
is likely to be disposed of or a contract is likely to be awarded or a licence or permission is
likely to be given, he would immediately make an application and would become entitled to
stand first in the queue at the cost of all others who may have a better claim. This Court has
repeatedly held that wherever a contract is to be awarded or a licence is to be given, the
public authority must adopt a transparent and fair method for making selections so that all
eligible persons get a fair opportunity of competition.7
Directives

The licences granted to the private respondents on or after 2008 and subsequent
allocation of spectrum to the licensees are declared illegal and are quashed.

The above direction shall become operative after four months.

Keeping in view the decision taken by the Central Government in 2011, TRAI shall
make fresh recommendations for grant of licence and allocation of spectrum in 2G
band in 22 Service Areas by auction, as was done for allocation of spectrum in 3G
band.8

7 Writ Petition (Civil) No. 423 OF 2010 with No. 10 OF 2011

8 [Link]/industry-and-economy/info-tech/[Link] (as visited
on27th September 2014)

Parties accused of Involvement

The selling of the licenses brought attention to three groups of entities politicians and
bureaucrats who had the authority to sell licenses, corporations who were buying the licenses
and media professionals who mediated between the politicians and the corporations.
Politicians accused Politicians named as accused in the charge sheet filed by the Central
Bureau of Investigation (CBI) and the Directorate General of Income Tax Investigation in the
Special CBI Court, allegations levelled against them by CBI and charges framed against them
by the Special CBI court.
[Link]
Political career Political party DMK, four times Member of Parliament, present
constituency Nilgiris, Tamil Nadu, former Union Minister of State (Rural Development
1999), former Union Minister of State (Health and Family Welfare 2003), former Union
Cabinet Minister (Environment & Forests 2004), former Union Cabinet Minister
(Communication and Information Technology 2007 & 2009)
Allegation 9In a joint investigation report prepared by Central Bureau of Investigation
(CBI) and Income Tax Department the agencies allege that A. Raja could have received
INR30 billion (US$490 million) as bribe for bringing forward the cut-off date for
applications for spectrum from the initial 1 October 2007 to 25 September 2007.[35][36] The
deadline switch eliminated many applications, enabling Raja to favour a few with spectrum.
[35][36] The agencies also alleged that he used bank accounts under his wife's name in
Mauritius and Seychelles to channelize the kickbacks he received.[37] A charge sheet filed by
CBI alleges that Raja conspired with the accused, subverted the first-come first-served
(FCFS) policy and waywardly redefined it to ensure that Swan and Unitech got 2G licences.
[38] He didn't auction the 2G spectrum or adopt some other market-determined methodology
to determine its real valuation and instead benchmarked it to a rate discovered in 2001, when
the telecom sector was at a nascent stage.
Charges Criminal breach of trust by a public servant under section 409, criminal conspiracy
under section 120-B, cheating under section 420 & forgery under sections 468 and 471.
Booked under the Prevention of Corruption Act for accepting illegal gratification.
9 [Link]/2011-02-11/india/28545283_1_telecom-minister-raja-cut-offdate

Status Taken into custody (arrested) by CBI on 2 February 2011[41] On 9 May 2012 he
applied for bail for the first time since his arrest.[42][43] and was granted bail on 15 May
2012, 10As of August 2012, trial is being conducted in Special CBI Court.

M. K. Kanimozhi
Political career Daughter of five-time Chief Minister of Tamil Nadu, M. Karunanidhi.
Political party DMK. She is a member of parliament, representing Tamil Nadu in the Rajya
Sabha (the upper house of Indian Parliament).
Allegation As per the chargesheet filed by CBI Kanimozhi has 20% stake in her family
owned Kalaignar TV, her step-mother Dayalu Ammal owns 60% stake in the same channel.
[50] CBI alleges that Kanimozhi was an "active brain" behind the channel's operations[50]
and she worked along with former telecom minister A. Raja to get DB Realty promoter
Shahid Balwa to circuitously route INR2 billion (US$33 million) to Kalaignar TV.[51]
According to CBI, Kanimozhi was in regular touch with A Raja regarding launching of
Kalaignar TV channel and its other pending works.[51] CBI alleges that A Raja was further
pursuing the cause of Kalaignar TV not only for getting registration of the company from
Ministry of Information and Broadcasting but also for getting it in the DTH operator TATA
Sky's bouquet. She was also summoned by the Income Tax Department, Chennai for alleged
tax evasion charges.
11

Charges Criminal conspiracy to cause criminal breach of trust by a public servant, criminal
conspiracy under section 120-B, cheating under section 420 & forgery under sections 468 and
471. Booked under the Prevention of Corruption Act.
Status Taken into custody (arrested) by CBI on 20 May [Link] bail on 28 November
2011 after spending 188 days in judicial custody .As of August 2012, trial is being conducted
in Special CBI Court.
Pramod Mahajan
CBI decided to include the name of late Pramod Mahajan in a separate column of the charge
sheet to be filed by it soon against three cellular companies and former officials in connection
with alleged irregularities in spectrum allocation during NDA regime causing a loss of Rs
5.08 billion to the exchequer.
[Link]/news/2g-scam-raja-gets-bail-after-15-months-in-jail/[Link]
11 [Link]/2011-04-26/news/29475332_1_kalaignar-tv-secondchargesheet-cineyug

Bureaucrats accused
Siddharth Behura
Designation Telecom Secretary when licenses were granted.
Allegation According to the chargesheet filed by CBI, Behura conspired with A. Raja and
several other accused. CBI alleges that when the application deadline time was declared as
between 3:30 pm to 4:30 pm, Behura allegedly shut counters to physically block other
telecom companies.
Charges Criminal breach of trust by a public servant under section 409, criminal conspiracy
under section 120-B, cheating under section 420 & forgery under sections 468 and 471.
Booked under the Prevention of Corruption Act for accepting illegal gratification.12
Status Taken into custody (arrested) by CBI on 2 February [Link] bail on 9 May
2012 As of August 2012, trial is being conducted in Special CBI [Link] before JPC
on 10 July 2012, Behura blamed A Raja, the then telecom Minister, for most of the decisions
related to 2G spectrum auctions.
RK Chandolia
Designation Raja's private secretary when licenses were granted.[Allegation As per the
chargesheet filed by CBI, like Behura, Chandolia too conspired with A. Raja and several
other accused. The agency alleges that when the application deadline time was declared as
between 3:30 pm to 4:30 pm, Chandolia along with Behura allegedly shut counters to
physically block other telecom companies.[Charges Criminal conspiracy to cause criminal
breach of trust by a public servant, criminal conspiracy under section 120 B, cheating under
section 420 & forgery under sections 468 and 471. Booked under the Prevention of
Corruption Act
Status Taken into custody (arrested) by CBI on 2 February 2011.[41] Granted bail by the
special CBI court 1 December 2011 but on 2 December 2011 High Court took suo motu
notice of newspaper reports of the bail granted to Chandolia and stayed it.[63] Chandolia
appealed against High Court order in Supreme Court and on 9 May 2012 Supreme Court of
12 [Link]/news/national/[Link]

India upheld the bail granted to RK Chandolia. As of August 2012, trial is being conducted in
Special CBI Court.
Corporate executives accused Corporates named as accused in the chargesheet filed by CBI
in the Special Court and charges framed against them by the Special court.

Sanjay Chandra
Designation Former MD, Unitech Wireless
Charges Criminal conspiracy to cause criminal breach of trust by a public servant, criminal
conspiracy under section 120-B, cheating under section 420 & forgery under sections 468 and
471. Booked under the Prevention of Corruption Act
Allegation Ex-CBI prosecutor AK Singh was implicated in a taped conversation, sharing
legal strategy and secret information with the accused, Chandra.
Status Taken into custody by CBI on 20 April 2011,granted bail on 24 November [Link]
of August 2012, trial is being conducted in Special CBI Court.

Gautam Doshi
Designation Group MD, Reliance Anil Dhirubhai Ambani Group
Charges Criminal conspiracy to cause criminal breach of trust by a public servant, criminal
conspiracy under section 120-B, cheating under section 420 & forgery under sections 468 and
471. Booked under the Prevention of Corruption Act[Status Taken into custody by CBI on
20 April 2011,[67] granted bail on 24 November [Link] of August 2012, trial is being
conducted in Special CBI Court.
Hari Nair
Designation Senior vice-president, Reliance Anil Dhirubhai Ambani Grou
Charges Criminal conspiracy to cause criminal breach of trust by a public servant, criminal
conspiracy under section 120-B, cheating under section 420 & forgery under sections 468 and
471. Booked under the Prevention of Corruption Act
Status Taken into custody by CBI on 20 April 2011, granted bail on 24 November [Link]
of August 2012, trial is being conducted in Special CBI Court.
Surendra Pipara

Designation Senior vice- President, Reliance Anil Dhirubhai Ambani Group

Charges Criminal conspiracy to cause criminal breach of trust by a public servant, criminal
conspiracy under section 120-B, cheating under section 420 & forgery under sections 468 and
471. Booked under the Prevention of Corruption Act
Status Taken into custody by CBI on 20 April 2011, granted bail on 24 November 2011. 13As
of August 2012, trial is being conducted in Special CBI Court.
Vinod Goenka
Designation Promoter and managing director, DB Realty & Swan Telecom
Charges Criminal conspiracy to cause criminal breach of trust by a public servant, criminal
conspiracy under section 120 B, cheating under section 420, forgery under sections 468 and
471, fabrication of evidence under section 193. Booked under the Prevention of Corruption
Act
Status Taken into custody by CBI on 20 April 2011granted bail on 24 November [Link] of
August 2012, trial is being conducted in Special CBI Court

Shahid Balwa14
Designation Promoter, DB Realty & Swan TelecomCharges Criminal conspiracy to cause
criminal breach of trust by a public servant Criminal conspiracy under section 120-B,
cheating under section 420, forgery under sections 468 and 471 & fabrication of evidence
under section 193. Booked under the Prevention of Corruption Act.
Status Taken into custody by CBI on 8 February 2011,granted bail on 29 November
[Link] of August 2012, trial is being conducted in Special CBI Court.
Asif Balwa (younger brother of Shahid Balwa)
Designation Director, Kusegaon Fruits and Vegetables Charges Criminal conspiracy to
cause criminal breach of trust by a public servant, criminal conspiracy under section 120-B,
cheating under section 420, forgery under sections 468 and 471 & fabrication of evidence
under section 193. Booked under Prevention of Corruption Act15

13 [Link]/article/india/2g-scam-accused-corporate-executives-walk-out-of-tihar-after-bail152323

14 [Link]/2011-11-29/news/30454669_1_swan-telecom-shahidbalwa-parity

15 [Link]/article/india/2g-scam-charges-against-raja-others-143384

Status Taken into custody by CBI on 29 March 2011] granted bail on 28 November
[Link] of August 2012, trial is being conducted in Special CBI Court.
Rajiv Agarwal
Designation Director, Kusegaon Fruits and VegetaCharges Criminal conspiracy to cause
criminal breach of trust by a public servant, criminal conspiracy under section 120-B,
cheating under section 420, forgery under sections 468 and 471, fabrication of evidence under
section 193. Booked under Prevention of Corruption Act
Status Taken into custody by CBI on 29 March 2011,granted bail on 28 November [Link]
of August 2012, trial is being conducted in Special CBI Court.

Sharath Kumar16
Designation managing director, Kalaignar TV
Charges Criminal conspiracy to cause criminal breach of trust by a public servant, criminal
conspiracy under section 120-B, cheating under section 420, forgery under sections 468 and
471 & fabrication of evidence under section 193. Booked under Prevention of Corruption Act
Status Taken into custody by CBI on 20 May 2011,[74] granted bail on 28 November 2011.
As of August 2012, trial is being conducted in Special CBI Court.
Ravi Ruia
Designation Vice-chairman, Essar Group
Charges Criminal conspiracy under section 120 B & cheating under section 420 of Indian
Penal Code.
Status Not taken into custody yet. As of August 2012, trial is being conducted in Special
CBI Court.
Anshuman Ruia
Designation Director, Essar Group[
Charges Criminal conspiracy under section 120 B & cheating under section 420 of Indian
Penal Code.
Status Not taken into custody yet.[78] As of August 2012, trial is being conducted in
Special CBI Court
Vikas Saraf

16 [Link]/news/2g-scam-kanimozhi-sharad-kumar-arrested/[Link]

Designation Director for strategy and planning, Essar Group

Charges Criminal conspiracy under section 120 B & cheating under section 420 of Indian
Penal Code
Status Not taken into custody yet.[As of August 2012, trial is being conducted in Special
CBI Court
IP Khaitan
Designation Promoter, Loop Telecom
Charges Criminal conspiracy under section 120 B & cheating under section 420 of Indian
Penal Code.
Status Not taken into custody yet.[78] As of August 2012, trial is being conducted in
Special CBI Court
Kiran Khaitan
Designation Promotor, Loop Telecom
Charges Criminal conspiracy under section 120 B & cheating under section 420 of Indian
Penal Code.
Status Not taken into custody yet. As of August 2012, trial is being conducted in Special
CBI Court.

Corporations accused
Unitech Wireless
Charges Criminal conspiracy to cause criminal breach of trust by a public servant, criminal
conspiracy under section 120-B, cheating under section 420 & forgery under sections 468 and
471. Booked under the Prevention of Corruption Act.
Status As of August 2012, trial is being conducted in Special CBI Court.
Reliance Telecom
Charges Criminal conspiracy to cause criminal breach of trust by a public servant, criminal
conspiracy under section 120-B, cheating under section 420, forgery under sections 468 and
471. Booked under the Prevention of Corruption Act Status As of August 2012, trial is
being conducted in Special CBI Court
Swan Telecom
Charges Criminal conspiracy to cause criminal breach of trust by a public servant, criminal
conspiracy under section 120-B, cheating under section 420, forgery under sections 468 and
471. Booked under the Prevention of Corruption Act

Status As of August 2012, trial is being conducted in Special CBI Court.

Other companies named in the charge sheet are
Loop Telecom Pvt Ltd
Loop Mobile India Ltd
Essar Tele Holding
Essar (Parent group of Essar Tele Holding)

Conclusion
The Minister for Communication and Information Technology has been extremely vocal
since the Supreme Court judgment and has assured the telecom industry that the times of
uncertainty are about to end. He promises that his government is coming out with a strong
definite policy to address all concerns.
The Supreme Court verdict is in line with the Draft National Telecom Policy 2011 (DNTP
2011), which was released prior to the verdict. As per the DNTP 2011, the government
intends to de-link spectrum from licenses; adopt the unified licensing regime; and allocate all
future spectrum through open market mechanisms such as auctions. The policy is expected to
be finalised and notified by April 2012.
Certain sections of the telecom industry believe that now is the right time for the government
to go a step further and be more radical in its approach. The government could seize this
opportunity to allow MVNOs and create a secondary market for spectrum trading which
would result in greater efficiencies. Further the government could adopt a truly technologyneutral policy, by allowing licensees to provide any of the 2G/3G/4G services in the spectrum
that they hold i.e. regulatory restrictions for using a particular frequency for a particular
technology should be done away with.
This will allow spectrum holders to optimise spectrum usage by refarming certain portions of
the 900/1800 MHz for more efficient 3G/4G services. However, these changes are not
expected to reflect in the new policy document.
On a separate note, TRAI and DoT are expected to ensure that the upcoming auctions of
vacated 2G spectrum happen in a fair and transparent manner. Given that the market
dynamics have changed tremendously since the Supreme Court verdict (specifically because
a number of expected participants in the auction have expressed intentions of exiting the
telecom market; and more so because the supply of spectrum far exceeds demand at the given
point in time), the government needs to draw a fine balance between maximising government

revenues, increasing spectrum efficiency, creating a level playing field and ensuring that
consumer tariffs remain low.

Bibliography
Primary Sources:
Websites:
[Link]/news/839371/scams-in-telecom-sector
[Link]
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