Presentation On 2G

scam

Submitted By:-
NEHA BHANOT
ECE/10/137
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.
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
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.
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
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
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.
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.
WHAT ARE THE CHARGES ON FORMER TELECOM MINISTER A RAJ

 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
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
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
Thank
You