New twist to spectrum blame game

New piece of evidence emerging now suggests that the Department of Telecommunications has not violated any procedure while allotting telecom spectrum to some new players. On the contrary, the licensing was based on a Cabinet decision and TRAI recommendations.

Sources familiar with the development point out that only “half truths” were being spread to point out accusing fingers at DoT for the manner in which the licenses were issued to new players like Unitech and Swan last year.

The then Finance Secretary D Subba Rao had objected to the manner in which the allotment was done. Dr Subba Rao, in a letter to DoT Secretary D S Mathur, asked if proper procedure has been followed with regard to financial diligence. He wondered as to how the rate of Rs 1600 crore fixed in 2001 has been applied to licenses given in 2007 “without any indexation, let alone current valuation”.

Mr Mathur had, in fact, explained in his prompt response that the decision was in accordance of a Cabinet decision of October 31, 2003 which in turn relied on the recommendations of Group of Ministers on telecom matters headed by then Finance Minister.

Mr Mathur’s letter to Dr Subba Rao pointed out “……it was decided that the recommendations of TRAI with regard to implementation of the Unified Access Licensing Regime for basic and cellular services may be accepted. DoT may be authorized to finalise the details of implementation with the approval of Minister of Communications and IT in this regard, including the calculation of the entry fee depending on the date of payment based on the principle given by TRAI in its recommendations.”

The letter went on to explain: “In terms of this Cabinet decision, the amendment to NTP 99 was issued on 11th November 2003 declaring that for telecommunication services the licence for Unified Access (Basic and Cellular) services permitting licencees to provide Basic and/or Cellular service using any technology may be issued.”

The entry fee was finalized for the UAS regime in 2003 based on the decision of the Cabinet. It was decided to keep the entry fee for the UAS licence the same as the entry fee for the fourth cellular operator, which as based on a bidding process in 2001, Mr Mathur’s letter said.

The dual technology licenses wee issued based on TRAI recommendations of August 2007. The fact of the matter is that TRAI, in its recommendations dated 28th August 2007, had not recommended any changes in entry fee/annual license fee and hence no changes were considered in the existing policy, Mr Mathur’s letter pointed out.