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CBI raids DoT offices over spectrum row
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NEW DELHI: In an unprecedented move, the CBI on Thursday raided the offices of the Department of Telecom (DoT), alleging criminal conspiracy between DoT officials and private firms in the allotment of 2G spectrum.

TOI was the first to report the unusual twists and turns in DoT's decision-making process in the matter, and closely followed the sequence of events from July 2007 -- when the rush for new telecom licences began -- to January 2008, when spectrum was allocated to the new entrants -- right up till November 2008, as the controversy snowballed.

CBI officials said a case under the Prevention of Corruption Act had been registered against unidentified DoT officials and "private persons" before the raids were carried out in the Wireless Planning Cell (WPC) and in the office of the Deputy Director General (Access Services) at Sanchar Bhawan.

According to the agency, all records pertaining to the allocation of spectrum to new entrants in January 2008 are being examined to ascertain whether or not there was any irregularity in the process.

It is learnt that AK Srivastav, DDG Access Services 1; Ashok Chandra, Wireless Advisor and P K Mittal, DDG Access Services Cell 11, the senior officers in charge of these divisions, were taken to CBI headquarters for questioning. The CBI raid started at 10am and finished at around 6pm.

The Central Vigilance Commission (CVC) had earlier asked CBI to probe alleged irregularities in the award of Unified Excess Services Licenses to private companies and the resultant loss of Rs 22,000 crore to the government.

"As per information received, there was criminal conspiracy between certain officials of DoT and private firms in order to award licences to these companies by putting a cap on the number of applicants against recommendations of the Telecom Regulatory Authority of India (TRAI) and by awarding licences to private companies on first-come-first-serve basis on the rates of 2001 without any competitive bidding," said a senior CBI official.

The CVC had asked CBI to investigate the identities of all beneficiaries in two companies that had bought stakes in Swan Telecom and Unitech Wireless Services. The two licencees had sold their stake even before they rolled out services for which they had been awarded licences.

Unitech and Swan sold their equity to Telenor and Etisalat, respectively, at roughly Rs 9,000 to Rs 10,000 crore each -- or six to eight times the price at which they had received spectrum from the government.

Sources said though there was no quantification done on what was the loss to the government on this account, a rough estimate based on what these telecom companies earned by offloading their stake could be anywhere between Rs 20,000 crore and Rs 22,000 crore.

However, industry watchers claim that the extent of the loss to the exchequer could be as high as Rs 50,000 crore. They point out that DoT gave away 2G spectrum to 120 licencees at roughly Rs 9,000 crore when the market value was probably closer to Rs 60,000 crore.

DoT chose to follow a first-come-first-served (FCFS) process to handpick companies though it could easily have chosen a global auction for 2G spectrum, as has now been prescribed for 3G. The refusal to hold auctions when demand for spectrum far outweighed its supply marked a departure from the policy of auctioning 2G spectrum till 2001.

Telecom minister A Raja had argued that he merely followed TRAI's recommendations. However, TRAI vehemently denied making any such recommendations. Former TRAI chairman N Misra had clarified on many occasions, including in a letter to DoT, that his recommendations should be read in their totality. He had accused the government of cherry picking portions of TRAI's recommendations rather than following them as a whole. All these developments were reported in TOI.

The previous DoT secretary, D S Mathur, was asked to sign the new licences in 2007, but refused to do so till he retired in December 2007. Once he was replaced, 120 licences were subsequently awarded in January 2008.

When criticised by the media and the opposition, Raja said his predecessors, Dayanadhi Maran and Arun Shourie, had followed the same FCFS policy. The big difference, however, was that there was no queue for spectrum during Shourie and Maran's tenure. At the time that Raja chose to give away spectrum to a select 120 companies, there were already 575 applications waiting and more could have followed.

Raja was also accused of abruptly announcing a cutoff date and favoring only those companies that had come in on or before September 25, 2007, even though the government had officially asked for applications till October 1, 2007.

The manner in which spectrum was allocated to companies within the FCFS norm also came under attack as there was no clarity whether winners were being selected based on date of application or date of licence fee payment.

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