Marxists allege $13-bn scam
in India's spectrum allocation
Delhi, Nov 6 (IANS) Taking the recent stake sale by Swan Telecom
and Unitech as case points, the Communist Party of India-Marxist
(CPI-M) has alleged a major scandal in the latest round of
radio frequency allocation to mobile telecom operators.
party said in a statement Thursday that the "first-come-first
served" principle adopted by the United Progressive Alliance
(UPA) government had also resulted in a loss of Rs.60,000
crore (Rs.600 billion/$13.2 billion) to the exchequer.
CPI-M is shocked that the UPA government, instead of addressing
the huge scam that has taken place in the allocation of the
fourth licence in 2G mobile services, has taken the position
that nothing needs to be done," the party statement said.
CPI-M said while the mobile phone licences were priced at
2001 levels to keep the costs low for the consumers, this
was not ensured through the licence terms, due to which successful
parties sold their shares at huge profits.
Telecom, for example, bought a licence for 13 circles along
with the necessary spectrum for Rs.15.37 billion ($340 million).
Subsequently, it sold 45 percent of its stake to UAE's Etisalat
for $900 million, taking its book value to $2 billion.
Unitech did not spend a single rupee for executing its licence
but sold a 60-percent stake to Norway's Talenor for Rs. 61.20
billion, while paying only Rs.16.51 billion as licence fee,
the party said.
government has actually got only one-sixth of what it would
have got, had it gone through a fresh auction route - a loss
of Rs.100 billion to the exchequer on account of Swan and
Unitech licences alone," the CPI-M said.
issue is: If scarce national resources are given away at throwaway
prices and these are then sold at many times that price, what
should the government do?" the party queried.
should either invoke fair trade practice/anti-monopoly sections,
or look at other operative sections of the licence to see
how this can be prevented. If no other recourse is available,
it must levy a windfall tax on such speculative transactions."
party said that with the stage set for auctioning licences
for third-generation telephony, the government must ensure
that adequate provisions are put into the licence terms and
conditions so that another fiasco can be avoided.