Submitted By:Pranjal Sahai Prachi Sahai

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-firstserve 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 circles 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 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

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