Introduction
Definition:
2G (Second Generation Telecommunication Standard) is means the wireless mobiles
which was introdu...
A Raja caused the loss of $40 billion to the Government by selling the Licenses of
network to the private players without ...
the spectrum allowing for far greater mobile phone penetration levels; and 2G
introduced data services for mobile, startin...
was the minister when the controversial second round of spectrum allocations took
place. Mr. Raja, an MP of the DravidaMun...
PrashantRuia - Essar Group ShahidBalwa - DB Realty and DB Etisalat (formerly Swan
Telecom) Anil Ambani - Reliance Group (A...
1. The 2G Spectrum Scam Story
2. How did it start?OnNovember, 2008, Subramanian Swamy wrote to Prime Minister
Manmohan Sin...
8. Who All Benefited from This Scam ?2G spectrum was allocated beyond contracted
quantity to 9 firms including Bharti, Vod...
buying licensingLoopMobileVideocon Telecommunications
LimitedSTelRelianceCommunicationsSistemaShyam Mobile (MTS) – Sistema...
saying those who apply between 3.30 and 4.30 pm would be issued licenses in accordance
with the said policy.[16]
Companies...
On nov 11th,The Comptroller and Auditor General(CAG) announced that revenue loss for India
due to Raja at Rs.1.8L Cr.
CAG ...
3. Main issues in 2G Spectrum Scam:
• 2G licences at throwaway prices
• Rules bent,no procedures followed.
• Cut-off date ...
4.1 IMPACT ON INDIAN ECONOMY
• Indian economy, at present is only next to China as far as its growth rate is concerned.
St...
• investing in the country looking at the plight of those who entered in 2008. The
Government
• need to come out with a st...
4.2 IMPACT ON GOVERNMENT ASSUMING OFFICE
• The verdict of Supreme Court is certainly an indictment on the Government. No
d...
• parties are demanding nothing less than the Government’s head. Even the coalition
parties (other
• than DMK) have starte...
• dictating terms to the Government as to how to issue the licences. The Government
will thus be a
4.3 IMPACT ON EXISTING ...
• is sufficient enough to dent its image. The image of the operators in global scenario is
also going
• to get beating. Ad...
• old operators.
IMPACT ON NEW OPERATORS
• Needless to say, the farewell to existing licence holders would pave way for op...
• them in the country which is overpowered by the corruption.
4.5 IMPACT ON CUSTOMERS
• The existing customers of the outg...
• portability scheme would be making their life even easier. Thus, the customers should
not be
• bothered much by the happ...
4.6 IMPACT ON INVESTORS
• The investors in the shares of outgoing operators would definitely be ruing their luck as
the
• ...
5. ALLEGATIONS
CHEAP TELECOM LICENCES
• Rules changed after the game had begun
• Cut-off date for applications advanced by...
Spectrum of Controversies:
Spectrum Scam:
Amount paid by new Telecos for a pan-India licence in 2008: Rs.1,651crore.
Estim...
Supreme Court given the case to CBI for investigation.
CBI raids Raja across the Spectrum.
CBI searches Raja houses in Del...
CONCLUSION
• To sum up, it may be said that 2G verdict may have an adverse impact on many
stakeholders to
• it. The same w...
BIBLIOGRAPHY
WEBSITE
 Www.Wikipedia .com
 www.scribed .com
 www.Hr factor.com
Daily Newspaper
26 | S A T N A M S I N G H
1. Times of India
2. Financial Times
3. Economic Times
27 | S A T N A M S I N G H
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  1. 1. Introduction Definition: 2G (Second Generation Telecommunication Standard) is means the wireless mobiles which was introduced in second generation. Spectrum means bandwidth which was sgiven by government of India. Now 2G is in operation and 4G is expected. WHAT IS 2G 2G means second-generation wireless telephone technology. Second generation 2G cellular telecom networks were commercially launched on the GSM standard in Finland in 1991. 2G introduced data services for mobile, starting with SMS text messages WHAT IS 2G SCAM 2G licenses issued to private telecom players at throwaway prices in 2008 Spectrum scam has cost loss to the government Rs. 1.76 Lakh crore Rules and procedures flouted while issuing licenses WHO CAUSED IT? The then telecom minister Andimuthu Raja caused the 2G scam 1 | S A T N A M S I N G H
  2. 2. A Raja caused the loss of $40 billion to the Government by selling the Licenses of network to the private players without following any rules and regulations. 2G Scam: It means issuing of 2G licenses to private telecom companies at low prices. The companies paid fewer amounts to the government which hits the profit and revenue of the government. It was done by bribing the Department of Telecom (DoT). 2g is a network service which was supposed to be launched in india for which the network providers such as vodafone,loop/bpl,reliance,airtel,docomo etc. had to be approved by the govt. of india to hold the licence for the bandwidth which is used for the 2g service and for this license the politicians of india have said to be taken some bribe just to give the licence for eg:the 3g facility allows us to stream videos from the internet from the cellphone for live streaming the internet usage amount is high hence they require a particular licence from the government to allow them to use similarly the 2g required a licence for which a bribe had been demanded by the politicians which has now! been exposed hope this helps you 2G-second generation,A.Raja minister of communication and IT ,cheated ind gov..2g spectrum scam involved officials nd minister nindia illegally under charging mob telephons companies for frequency allocation licences,wich they would use 2 create 2G subscriptions for cell phons .according 2 a report submitted by the comptroller and auditor based on money collected from 3G* licences.this made loss of rs.176.379 crores($40 billion)...and more info came out when tapping the phone calls of lobbyist niiraradia. 2G (or 2-G) is short for second-generation wireless telephone technology. Second generation 2G cellular telecom networks were commercially launched on the GSM standard in Finland by Radiolinja[1] (now part of Elisa Oyj) in 1991. Three primary benefits of 2G networks over their predecessors were that phone conversations were digitally encrypted; 2G systems were significantly more efficient on 2 | S A T N A M S I N G H
  3. 3. the spectrum allowing for far greater mobile phone penetration levels; and 2G introduced data services for mobile, starting with SMS text messages . After 2G was launched, the previous mobile telephone systems were retrospectively dubbed 1G. While radio signals on 1G networks are analog, radio signals on 2G networks are digital. Both systems use digital signaling to connect the radio towers (which listen to the handsets) to the rest of the telephone system. 2G has been superseded by newer technologies such as 2.5G, 2.75G, 3G, and 4G; however, 2G networks are still used in many parts of the world. Some of the many conversations recorded over 300 days were leaked to the media. The intense controversy around the leaked tapes, became known in the media as the Radia tapes controversy. The tapes featured some explosive conversations between Politicians, Journalists and Corporate Houses. Politicians from Karunanidhi to ArunJaitley, journalists like BarkhaDutt and VirSanghvi and Industrial groups like the Tata's were either participants or mentioned in these explosive tapes. In 2008, the Income Tax department, after orders from the ministry of Home and the PMO, began tapping the phones of NiiraRadia. This was done to help with an ongoing investigation into a case where it was alleged that NiiraRadia had acted as a spy.[3] The 2G spectrum scam involved officials and ministers in the Government of India illegally undercharging mobile telephony companies for frequency allocation licenses, which they would use to create 2G subscriptions for cell phones. According to a report submitted by the Comptroller and Auditor General based on money collected from 3G licenses, the loss to the exchequer was 176,379 crore (US$38.27 billion). The issuing of the 2G licenses occurred in 2008, but the scam came to public notice when the Indian Income Tax Department investigated political lobbyist NiiraRadia and the Supreme Court of India took SubramaniamSwamy's complaints on record [With Case type: Writ Petition (Civil),Case No:10, Year:2011].[1] The case details of the main PIL filed with the supreme court is Typewritten Petition (Civil),Case No:423, Year:2010. ArunShourie - the minister for Telecom during 2003 in the previous BJP regime. It was ArunShourie who introduced the controversial technology neutral "Unified Access(both Basic A. Raja - the Ex-Minister of Communications and Information Technology who 3 | S A T N A M S I N G H
  4. 4. was the minister when the controversial second round of spectrum allocations took place. Mr. Raja, an MP of the DravidaMunnetraKazhagam from the Nilgiris constituency, was forced to resign following the public outcry. Manmohan Singh, - Prime Minister of India from heading the ruling UPA government led by the Congress, who is accused of not acting on removing Raja, the main accused in the scam in spite of Finance minister Chidambaram's warning to him .In a note to the PM on January 15, 2008, Chidambaram had reiterated the finance ministry's suggestion to auction spectrum as the price would be based on scarcity value. He then went on to suggest this could be used as one-time for additional spectrum. 3. Politicians involved & Cellular) Services License", which allowed fixed line operators who had paid much lower license fees to offer mobile phone services, at first in the limited WLL mode (Wireless local loop) and later, following an out of court settlement between mobile operators and the BJP govt, full mobility. This gave an advantage to players like Reliance and Tata Teleservices who managed to get mobile spectrum without paying the hefty fees that earlier operators like BPL Mobile had paid. R K Chandolia - private secretary of Raja during UPA-I when the licences were awarded. He was an Indian Economic Service officer of the 1984 batch cadre. When Raja became the Telecom Minister once again in UPA-II, Chandolia had been promoted to the Joint Secretary rank. Raja re-designated him Economic Adviser, that gave him the charge of all important policy-related work. Chandolia interacted with all the licensees. It is said that it was Chandolia who, from DDG- access services A K Srivastava's room, had handed out letters of intent to representatives of various companies PradipBaijal - a bureaucrat who is alleged to have implemented policies that favored certain Telecom companies when he was heading the TRAI. Post retirement, Baijal joined Noesis, a consulting firm. Raja has made references to Baijal's decisions in 2003 as the basis for his decisions in 2008. The houses and offices of the bureaucrat were recently when raided by the Central Bureau of Investigation as part of their investigations. Siddhartha Behura - former telecom secretary who served in the DOT at the time of the 2G allocation. 4. Bureaucrats involved 4 | S A T N A M S I N G H
  5. 5. PrashantRuia - Essar Group ShahidBalwa - DB Realty and DB Etisalat (formerly Swan Telecom) Anil Ambani - Reliance Group (ADAG) Allianz Infra Dishnet Wireless Vodafone Essar Tata Communications SistemaShyam Mobile Reliance Communications S Tel Videocon Telecommunications Loop Mobile Swan Unitech 5. Corporations Corporative involved personalities involved Raja, Behura and Chandolia were arrested on Feb 2nd 2011. The CBI conducted raids on Raja and four other telecom officials - former telecom secretary SiddharthBehura, Raja's personal secretary R K Chandolia, member telecom K Sridhar and DoT deputy director general A K Srivastava on 8 December 2010. In response to the various allegations , the Govt of India has replaced the then incumbent Telecom minister ,A Raja with KapilSibal who has taken up this charge in addition to being the Union minister for Human Resources Development. MrSibal contends that the "notional" losses quoted are a result of erroneous calculations and insists that the actual losses are nil. In mid November the comptroller VinodRai issued show-cause notices to Unitech, S Tel, Loop Mobile, Datacom (Videocon), and Etisalat to respond to his assertion that all of the 85 licenses granted to these companies did not have the up- front capital required at the time of the application and were in other ways illegal. Some media sources have speculated that these companies will receive large fines but not have their licenses revoked, as they are currently providing some consumer service. In early November 2010 Jayalalithaa accused the Tamil Nadu state chief minister M Karunanidhi of protecting A. Raja from corruption charges and called for A. Raja's resignation. By mid November A. Raja resigned. 6. Response to Scam The first casualty in Stock Markets once Raja was arrested was DB Realty. DB Realty had given 200+ crores to KalaignarTV( owned by Karunanidhi's Wife) . The news led to 20% fall in the stock prices of DB Realty. Sun TV had its shares fall by 10% on the next day following rumours of KalanidhiMaran having stake in Kalaignar TV. Sun TV COO refused the allegations. Swan Telecom Chief Balwa was arrested on Feb 8 and this led to rumours of links with Anil Ambani's Reliance ADAG and it led to 20% fall of his stocks . Its 5 | S A T N A M S I N G H
  6. 6. 1. The 2G Spectrum Scam Story 2. How did it start?OnNovember, 2008, Subramanian Swamy wrote to Prime Minister Manmohan Singh and followed it up with four more letters seeking sanction to prosecute A. Raja in regards to 2G telecom spectrum political corruption scam.When the Prime Minister Manmohan Singh didn't take any decision Swamy went to Supreme Court. On 27 November 2010 Subramanian Swamyanounced that he will file a criminal case against former union minister A. Raja in the 2G Spectrum Scam before the Special Court for Corruption Cases in connection with the charges of irregularities in 2G spectrum allocation 3. What Happened?2G licenses issued to private telecom players at throwaway prices in 2008CAG: Spectrum scam has cost the government Rs. 1.76 lakh croreCAG: Rules and procedures flouted while issuing licenses.Person accused is the Telecom minister : A.Raja 4. The Comptroller and Auditor General of India (CAG) said it has submitted to the government the report on the 2G spectrum allotment that is presumed to have caused a revenue loss of up to Rs. 1.76 lakh crore. 5. CAG ReportCAG has accused the telecom ministry for undervaluing 2G spectrum, sold to new players in 2008, and held that the allotment price was not realistic, which has caused a revenue loss of up to Rs. 176,700 crore to the government.The report is also believed to have castigated telecom minister A Raja for ignoring the advice of finance and law ministries on allocation of 2G spectrum to benefit a few operators.It is also believed to have criticised telecom regulator TRAI standing as a helpless spectator when its recommendations were being ignored or misused.The CAG report said the price at which the spectrum was alloted in 2008 was based on 2001 prices, which was quite low and has resulted in a loss to the government exchequer.Also, no proper auction method was followed and no bids were taken to sell out the spectrum. 7. Yielding to relentless opposition pressure, Union telecom minister A Raja resigned 0n the wake of the 2G Spectrum allocation scam on 14th november.He was arrested by the CBI on 2nd February. 6 | S A T N A M S I N G H
  7. 7. 8. Who All Benefited from This Scam ?2G spectrum was allocated beyond contracted quantity to 9 firms including Bharti, Vodafone, Idea, BSNL, Reliance, Aircel," the report said.NiiraRadia is said to be involved.Read her details.Department of Telecommunications (DoT) circumvented the rules to help Swan Telecom, which effectively acted as a front for Reliance Telecommunications. The charges in the CAG report are that Swan should not have been considered for a license because Reliance Communications held 10.7% stake in Swan - and according to the rules, a telecom operator cannot own more than 10% stake in another telecom company operating in the same service area. "Email ID of Swan Telecom was shown as that of a Reliance ADA group official 9. Another big beneficiary of the 2G spectrum allocation was Unitech Wireless, which had no experience in the telecommunication sector.AfterUnitech got the license for a throwaway price of Rs. 1,661 crore, it sold 60 per cent stake to Telenor Asia for a whopping Rs. 6,200 crore. 10. Parties Involved with the 2G Case 11. Politicians involvedA. Raja, the Ex-Minister of Communications and Information Technology who was the minister when the controversial second round of spectrum allocations took place. ArunShourie, the minister for Telecom during 2003 in the previous BJP regime. PramodMahajan, the minister for Telecom between 1999 and 2003. 12. Bureaucrats involvedSiddharthaBehura, former telecom secretary who served in the DOT at the time of the 2G allocation.PradipBaijal, a bureaucrat who is alleged to have implemented policies that favored certain Telecom companies when he was heading the TRAI. R K Chandolia, private secretary of Raja during UPA-I when the licences were awarded. He was an Indian Economic Service officer of the 1984 batch cadre. 13. Corporations involvedUnitech Group a real estate company entering the telecom industry with its 2G bid; sold 60% of its company stake at huge profit to Telenor after buying licensing (Including land values properties for towers)Swan Telecom sold 45% of its company stake at huge profit to Emirates Telecommunications Corporation (Etisalat) after 7 | S A T N A M S I N G H
  8. 8. buying licensingLoopMobileVideocon Telecommunications LimitedSTelRelianceCommunicationsSistemaShyam Mobile (MTS) – Sistema Mobile RussiaTataCommunicationsVodafoneEssarDishnetWirelessAllianz Infra 14. Media persons and lobbyists involvedNiraRadia, a former airline entrepreneur turned corporate lobbyist whose conversations with politicians and corporate entities were recorded by the government authorities and leaked creating the NiraRadia tapes controversy.BarkhaDutt, an NDTV journalist alleged to have lobbied for A. Raja's appointment as minister.VirSanghvi, a Hindustan Times editor alleged to have edited articles to reduce blame in the NiraRadia tapes. 15. PetitionersSubramaniamSwamy, activist lawyer and politician, whose letters to the Prime Minister demanding action and affidavits and cases in the Supreme Court brought the issue into the public limelight.ParanjoyGuhaThakurta, a journalist who was one among the very first to write on the irregularities in the awarding of 2G 2. History of 2G scam Raja arranged the sale of the 2G spectrum licenses below their market value. In 2007, Telecom Regulatory Authority of India (TRAI) had given its recommendations on pricing of 2G spectrum to A.Raja but he did not place the recommendations before the full Telecom Commission which, among others, would have included the Finance Secretary.[13] In November 2007 Prime Minister of IndiaDrManmohan 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.[14] In the same month "Finance Ministry" wrote letter to "Department of Telecom" raising concerns over the procedure adopted by it[15] but "Department of Telecom" went ahead with its plan of giving 2G licenses. It proponed the cut-off date to September 25, from October 1, 2007. Later on the same day, DoT posted an announcement on its website 8 | S A T N A M S I N G H
  9. 9. saying those who apply between 3.30 and 4.30 pm would be issued licenses in accordance with the said policy.[16] Companies like Unitech& Swan Telecom got licenses without any prior telecom experience. The 2G spectrum scam This is the biggest scam till now in India. The Supreme Court said that this 2G Scam is the mother of all the Scams. The 2G spectrum scam involved officials in the government of India illegally undercharging mobile telephony companies for frequency allocation licenses, which they would use to create 2G subscriptions for cell phones. The shortfall between the money collected and the money which the law mandated to be collected is 1, 76,379crore rupees or USD 39 billion. The issuing of licenses occurred in 2008, but the scam came to public notice when the Indian Income Tax Department was investigating political lobbyist NiraRadia. The government's investigation and the government's reactions to the findings in the investigation were the subject of debate, as were the nature of the Indian media's reactions. The discussion around the reactions to the 2G spectrum scam became known in the media as the NiraRadia tapes controversy. A Raja ,theEx-Minister of Communications andInformation Technology , is an Indian politician from the DMK, who sold the licences and played a key role in 2G Scam and also who knows full details regarding 2G Scam. Generally , Tele Communication companies have to take licence from Government by paying large amounts for their operations and also Government have many rules to give permission for new companies in Tele Communication.So,due to Raja , many companies got the licences very cheaply and also many new companies started their services with outeligibilitycriteria,which is illegal. Following is the information given by Comptroller and Auditor General(CAG): 9 | S A T N A M S I N G H
  10. 10. On nov 11th,The Comptroller and Auditor General(CAG) announced that revenue loss for India due to Raja at Rs.1.8L Cr. CAG indicts Raja: CAG says Raja caused Rs.177,000crore loss to India. Licences issued in 2008,pegged at 2001 prices. Raja’s ministry sold spectrum to 9 companies in 2008 using faulty &outdatedpolicy,causing Rs.140,000 crore loss. Doled out additional airwaves to existing telecos beyond what they were entitled to,causing an additional loss of nearly Rs.37,000 crore to exchequer. Raja gave dual licence permits to RCOM & Tata tele in 2008 using old policy , causing a loss of up to Rs.37,000 cr. Raja ignored advice of Telecom RegulatoryTRAI , Finance Ministry & Law Ministry on pricing airwaves at realistic & market-driven rates. He ignored Prime Minister’s advice also to favouring some corporates,Raja flouted all norm New Delhi: India is the world's second-largest telecom market in terms of subscribers - it has 900 million subscribers. So far, the telecom sector has been crowded with more than a dozen players. Call rates in India among the lowest in the world. Now that the Supreme Court has cancelled 122 licenses, here is a quick look at the likely impact. 10 | S A T N A M S I N G H
  11. 11. 3. Main issues in 2G Spectrum Scam: • 2G licences at throwaway prices • Rules bent,no procedures followed. • Cut-off date advanced • No auction,no bids. • First-come-first-served. • Swan Telecom licence:Rs.1537 crore • Sold 45% stake:Rs.4200crore • Mobile subscriber base: 2008:350 million 4. Effect s On 2G Scam 11 | S A T N A M S I N G H
  12. 12. 4.1 IMPACT ON INDIAN ECONOMY • Indian economy, at present is only next to China as far as its growth rate is concerned. Still the • worrying point is the fiscal deficit which, inspite of all efforts is more than 5 per cent of India’s • GDP and is mounting year after year. As per the audit report of Comptroller and Auditor Generalof India (CAG), the Government of India was expected to earn somewhere between Rs. 57,666 • crore to Rs. 1.76 lakh crore had the fair dealings been done in the spectrum allocation. The actual • realisation, in turn was only Rs. 12,386 crore. Now, since the exercise is to be repeated once • again and that too in a fair manner, the target envisaged by CAG is looking realistic to attain. • Hence, India is likely to earn huge revenue which, in turn would help the country in controlling • sky high fiscal deficit persisting for some time now. • India is also hoping to get Foreign Direct Investment (FDI) on account of foreign players seeking • licence in the new 2G auctions. India definitely needs the same to push for attaining its growth • targets. The only worrying factor, however is that prospective foreign entrants may restrain from 12 | S A T N A M S I N G H
  13. 13. • investing in the country looking at the plight of those who entered in 2008. The Government • need to come out with a statement that whatever was done wrong in the past are a history and • that transparency would be ensured in the new bids. • One of the negative outcomes of the verdict on the country’s economy would be marginal • increase in the unemployment. The companies, which have been asked to shut their businesses, • were already employing good number of people. Uninor alone, for instance has a workforce • comprising of 17,500 persons. Adding to it, the company has 22,000 partners. Thus, both direct • as well as indirect employment is going to be adversely affected on account of the verdict. One • however hopes that this will be short run phenomenon and the displaced workforce would be 13 | S A T N A M S I N G H
  14. 14. 4.2 IMPACT ON GOVERNMENT ASSUMING OFFICE • The verdict of Supreme Court is certainly an indictment on the Government. No doubt, the • Government is putting blame on the individual, who was the concerned minister at that point of • time yet, either of the two i.e ignorance of the Government or inability to control the minister of • the coalition partner is a certainty. Both do not argue well for the Government. The opposition 14 | S A T N A M S I N G H
  15. 15. • parties are demanding nothing less than the Government’s head. Even the coalition parties (other • than DMK) have started dictating terms to Congress on account of it. The image of the • Government around the globe has also taken a beating. Writing on the wall is getting clearer for • it with every passing day. • Inspite of the political fallout, the Court’s order may still be counted as a blessing in disguise for • the Government. The auction of new licenses may put much needed money in its pocket. The • same will give it fiscal cushion. The Finance Minister himself had opined that on account of • country’s high demand and requirement, improving revenue would be his topmost priority. Now, • he has got a chance to fetch good money through 2G auction in the coming months. The • Government may be ruing political fallout yet; the finance minister may be feeling happy from • the core of his heart. • The court’s verdict has ensured that Government will be having no say whatsoever in deciding • method to be followed for future 2G auctions. It will be the Supreme Court which will be 15 | S A T N A M S I N G H
  16. 16. • dictating terms to the Government as to how to issue the licences. The Government will thus be a 4.3 IMPACT ON EXISTING LICENSE HOLDERS • There is no denying the fact that licence holders of the auction of 2008 are going to be the worst • Sufferers of Supreme Court’s verdict. No doubt they were the partners in eye-opener scam yet, • the fact remains that they made investment only after getting necessary clearances from the • Government. Few of these are claiming that they are suffering even after being fully compliant at • Each stage of the licence allocation process. • At the outset, the business of these licence holders is to be wrapped up. Most of these have • already made huge investments in the country. Telenor, for instance, the co-partner in Uninor has • so far invested Rs. 6100 Crore in equity and over Rs. 8000 Crore in corporate guarantees as • foreign investor. Similarly, Sistema of Russia, the partner of Shayam group of India has so far • spentRs. 12,500 Crore. The disgraced operators collectively would bear the loss of Rs. 9000 • Crore for the amount paid as the licensing fees. • Adding insult to the injury would be a fine of Rs. 50 lakh to Rs. 5 Crore that each operator would • have to pay. No doubt, the amount is meagre for any good business undertaking yet, fine in itself 16 | S A T N A M S I N G H
  17. 17. • is sufficient enough to dent its image. The image of the operators in global scenario is also going • to get beating. Adding to all these would be the assets that these existing licence holders would • have to sell. They may even have to contend with throwaway prices they would get for the same. 4.4 IMPACT ON OLD OPERATORS • If the verdict has broken the heart of licence holders of 2008, the old operators like BSNL, Bharti • Airtel and Vodafone may find a big smile on their face on account of it. In a fiercely competitive • market, if the old players could tap the customers of the outgoing players, it would be a huge • bonus for them. The same would give much needed boost to their earnings. There are more than • 7-Crore subscribers of the outgoing operators and through number portability; the old operators • may get an easy access to these subscribers. • Another benefit that would accrue to the old operators would be that these can tap the assets of • the outgoing operators. The old operators if are deciding to leave the market and not indulge in • new bids, would not have too many options but to sell their assets at rather low prices. The old • operators meanwhile can grab the opportunity with both hands by purchasing the assets of the 17 | S A T N A M S I N G H
  18. 18. • old operators. IMPACT ON NEW OPERATORS • Needless to say, the farewell to existing licence holders would pave way for opening of doors for • prospective operators. A good thing that is going to happen for them is that a fair dealing would • be ensured as Court would keep a direct vigil on the entire allotment. Moreover, the Government • would never allow the history to repeat itself after the thrashing it has got from the court and • everywell wisher of the country. Thus, genuine operators would feel safe and secure at least till • the completion of the auction process. Still, the image of the country is dented and the operators • especially the foreign ones would always remain perturbed with what is going to be in store for 18 | S A T N A M S I N G H
  19. 19. • them in the country which is overpowered by the corruption. 4.5 IMPACT ON CUSTOMERS • The existing customers of the outgoing operators may experience a temporary loss of connection. • However, they still will have ample time to switch over to the old operators. The number 19 | S A T N A M S I N G H
  20. 20. • portability scheme would be making their life even easier. Thus, the customers should not be • bothered much by the happening. The new operators, meanwhile, would be having a task cut out • for them as prospective customers would be tempted to give privilege to old and established 20 | S A T N A M S I N G H
  21. 21. 4.6 IMPACT ON INVESTORS • The investors in the shares of outgoing operators would definitely be ruing their luck as the • shares of the companies like Unitech and DB Realty etc. have been touching the ground after the • court’s verdict. Their initial inflated prices would further ensure that losses to their investors are • much higher. Those who had invested in Idea, BhartiAirtel etc. (The old operators), meanwhile • would be finding it hard to control their smiles as their shares are rocketing up after the verdict. • Thus, the verdict is having its say on investors as well. 21 | S A T N A M S I N G H
  22. 22. 5. ALLEGATIONS CHEAP TELECOM LICENCES • Rules changed after the game had begun • Cut-off date for applications advanced by a week • Licenses issued on a first-come-first-served basis • No proper auction process followed, no bids invited • Raja ignored advice of TRAI, Law Ministry, Finance Ministry • TRAI had recommended auctioning of spectrum at market rates WEB Of Allegations: CAG says telecom ministry had flouted every canon of financial propriety,rules and procedures. Raja issued licences to ineligible applicants:85 of 122 licences issued in 2008 were illegal as these cos had disclosed incomplete information , submitted fictitious documents and used fraudulent means to get permits. Allianz Infratech ,Datacom(Videocon), Unitech(Telenor), S Tel, Loop Mobile and Etisalat were not eligible for mobile prmits. Swan Telecom appeared to act as a ‘front company’ on behalf of Anil Ambhani-led Reliance Telecom. Profit list for spectrum changed in Punjab & Maharashtra to favour Swan. Telecom ministry gave undue benefits to RCOM & Swan. 22 | S A T N A M S I N G H
  23. 23. Spectrum of Controversies: Spectrum Scam: Amount paid by new Telecos for a pan-India licence in 2008: Rs.1,651crore. Estimated loss to exchequer on selling licences cheap:Rs.140,000crore. Easy Money: Swan Telecom taken the licence for Rs.1537 crore and sold 45% stake to UAE’s Etisalat for $900m(Rs.4200 cr). Unitech taken licence for Rs.1661 crore and sold 60.00% to Norway’s Telenor for $1.1 billion(Rs.6200 cr). S Tel sold 49% to Bahrain’s Batelco for about $225m. On nov 14th Raja quit as congress refuses to relent and KapilSibal taken the charge. Actions Taken By The Government To Prevent The 2G Scam: Enforcement Directorate(ED) has writeen to countries from where money was received by Indian firms for details on investors & source of funds. It is also examing role of prominent corporate lobbyist who is alleged to have player a role in influencing the way the permits were awarded to new companies. Opposition (BJP)to press for Joint Parliamentary Committee probe. Janata Party President SubramaniamSwamy filed a complaint in Supreme Court on Raja.So, the issue is in SC. The Telecom Regulatory has asked the Government to cancel 62 of the 122 licences issued by former Telecom Minister A Raja. The CAG in its report said 85 of 122 licences given to six companies , notably Uninor,Videocon,LoopMobile,STel,Etisalat and AllinzInfratech were illegal as these firms were not eligible to obtain them. ED quizzes NiiraRadia,who is a lobbyist & owner of Vaishnavi Corporate Communications that handles PR for of all Tata companies for role in 2G Scam for 7hours. 23 | S A T N A M S I N G H
  24. 24. Supreme Court given the case to CBI for investigation. CBI raids Raja across the Spectrum. CBI searches Raja houses in Delhi,Chennai. SC questions Rs.10,000cr loans to new licences. Court asked CBI to examine the feasibility of probing the allocation of radio spectrum since 2001,when BJP-Led NDA Government was in power. Judges appealed to be critical of a decision by SBI to lend Rs.2500 cr to Uninor. CBI told to court that they will complete the investigation in 3 months,later they told they need 6 months time. 6. Suggestion • The proceedings of the parliamentary committees should be made available to the media and public,so that people can understand the issue clearly. • The Government must take the serious and severe decisions especially in these type of scams,so that no one tries to cheat. • Government has to prove itself by arresting the illegal persons, whether they are anybody. • Both media and the general public must create an awareness that the government is a trustee of public money and assets and the people are the real owners. • Media has played an important role in curving a public opinion .So,alert citizen and conscientious media. 24 | S A T N A M S I N G H
  25. 25. CONCLUSION • To sum up, it may be said that 2G verdict may have an adverse impact on many stakeholders to • it. The same will put the existing licence holders and their customers’ and investors and the • Government in a spot of bother. Yet, the same will go a long way in keeping a check on • unethical political-corporate sector nexus in future. This, in turn will help the country and its • Economy in flourishing. 25 | S A T N A M S I N G H
  26. 26. BIBLIOGRAPHY WEBSITE  Www.Wikipedia .com  www.scribed .com  www.Hr factor.com Daily Newspaper 26 | S A T N A M S I N G H
  27. 27. 1. Times of India 2. Financial Times 3. Economic Times 27 | S A T N A M S I N G H

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