The document discusses 2G spectrum allocation in India and the subsequent 2G spectrum scam. It provides details on what 2G is, how licenses were issued in 2008 at 2001 prices according to the CAG, resulting in an estimated revenue loss of Rs. 1.76 lakh crore to the government. It outlines the key findings and charges of the CAG report against former Telecom Minister A. Raja, including ignoring procedures, favoritism shown to certain companies, and the lack of transparency in the allocation process.

1. Submitted to:- Submitted By:-
Arun Kumar Mahabir Singh
Asst.Prof. M.B.A.(G),82
USM KUK

2. What IS 2G ?
 It is a term used in telecommunication sector. It is
a spectrum which support 2G technology. High
bandwidth is required for this purpose. 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.

3. What IS 2G Spectrum Scam ?
Acc. To comptroller and auditor general(CAG) –
o 2G licenses issued to private telecom players at
throwaway prices in 2008
o 2G spectrum allocation had caused revenue loss of Rs
1.76 lakh crore
o Rules and procedures flouted while issuing licenses

4. What is CAG
The CAG is a typical file-based government auditing
agency. It stresses on reporting deviations from set
procedures and policies and fails to recognise that the
deviations have resulted in speeding up economic
growth.

5. CAG Report on 2G Scam
Here are some of the points made by the CAG Report:
 85 firms suppressed facts, gave fictitious papers to DoT
 DoT kept spectrum pricing issue out of GoM's purview
 A Raja ignored Prime Minister's, FM's and Law Ministry's
advice
 Spectrum was rare national asset, should have been
auctioned
 2G spectrum allocated to new players at throwaway prices
 Undue advantage to Swan Telecom in allocation of
spectrum
 Email ID of Swan Telecom shown as that of a Reliance ADA
group official

6. Contd…
 Spectrum allocated beyond contracted quantity to 9 firms
including Bharti, Vodafone, Idea, BSNL, Reliance, Aircel
 Idea and Spice not given spectrum on grounds of proposed
merger- this was against the rules
 Allocation of 2G spectrum led to loss of Rs. 1.76 lakh crore
 DoT did not follow its own practise of first-come-first-
serve in letter and spirit
 Calculation of loss based on 3G auction earlier this year
 Cut-off date for license letters advanced arbitrarily by a
week
 This went against time-tested procedures of government
functioning
 Entire process lacked transparency
 Undertaken in arbitrary and inequitable manner

8. CAG indicts
Unitech Wireless
 Unitech has got licence for 22 circle’s and it paid the
Rs.1658 crore licence fees for each circle but the
company sale their 67.25% eqity for Rs.6120 crore to
the telenor a company of Norvay.
 Telenor has valued the spectrum of the company
 CAG said that if we see this deal then the fees for the
allotment of licence is between Rs.7758 crore to
Rs.9100 crore on the other way if it was not their then
the govt. will get the fees between Rs.58000 crore to
Rs.68000 crore for the 122 licence.

9. Who is A. Raja?
 Andimuthu Raja has come a long way from being a
lawyer in rural Tamil Nadu.
 The former Communication minister who make the
2G spectrum scam
 Alloted the licence which are given in 2008 at 2001
prices of Rs. 1,658 crore.

10. WHAT ARE THE CHARGES ON
FORMER TELECOM MINISTER A
RAJA?
 CHEAP TELECOM LICENSES-
 Entry fee for spectrum licenses in 2008 pegged at 2001
prices.
 Mobile subscriber base had shot up to 350 million in
2008 from 4 million in 2001.
 NO PROCEDURES FOLLOWED-
 Rules changed after the game had begun
 Cut-off date for applications advanced by a week

11. Contd….
 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
 FAVOURITISM, CORPORATES ENCASH PREMIUM-
 Unitech, Swan Telecom got licenses without any prior telecom
experience.
 Swan Telecom given license even though it did not meet
eligibility criteria

12. Contd….
 Swan got license for Rs. 1537 crore, sold 45% stake to
Etisalat for Rs. 4200 crore.
 Unitech Wireless got license for Rs. 1661 crore, sold
67.25% stake for Rs. 6200 crore.
 All nine companies paid DoT only Rs. 10,772 crore for 2G
licences