My scam versus your scam

Written by Rishi Raj | Updated: Dec 30 2010, 15:28pm hrs
The Congress and the BJP are locked in a blame game on the great telecom loot by former telecom minister A Raja that is now under multiple probes. While the opening up of the telecom sector to private investment and enterprise took place in Congresss regime (1993-95) it was during BJPs rule that several policy changes occurredNational Telecom Policy 1999, Wireless in Local Loop (2001) and Unified Access Service Licence (2003). Under the Congresss reign, which extends to the present times, new licences were given, excess spectrum allocated to GSM players and, last but not the least, there were the Raja licences. Naturally, each time the BJP cries telecom scam and demands a JPC, the Congress shouts back that there were several telecom scams during the BJPs time also. It is understandable that telecom minister Kapil Sibal should appoint a one-man enquiry to go into all allocation of licences/spectrum since 2001 to assess whether appropriate procedures were adopted. However, when the Supreme Court also asks the CBI to conduct a thorough investigation since 2001 and when the BJPs MM Joshi, chairman of the Public Accounts Committee looking into Rajas scam, says he is open to a similar line of investigation, its time to delve into history and sift facts from fiction.

Sibal and Congress spokesperson Manish Tiwari often refer to the loss caused by the BJP through its NTP 1999, which moved operators from a fixed licence fee to the revenue share regime. Sibal recently told a news channel that the loss was as high as Rs 1.43 lakh crorehow he arrived at the figure was never explained. Lets examine what the operators, during 1995-97, committed through bids and how much they paid while migrating to NTP 1999 vis--vis the gain to the exchequer till now. In 1993, the Congresss telecom minister Sukh Ram gave away eight mobile licences in four metros without any bids. Judging by todays yardstick, the metro subscribers were the first to adopt mobile phones and therefore these circles have the highest quality of post-paid subscribers. So, if these were auctioned they would have received the highest bids.

Apart from the metros, in the bids for mobile licences for 18 other circles, operators had made a total commitment of Rs 23,393 crore over a 10-year period i.e., till 1995. Apart from this, there was also a commitment of Rs 27,863 crore for a period of 15 years (i.e., till 2011) for six fixed-line licences. So altogether, the amount the operators would have paid to the government was Rs 51,256 crore had there been no NTP 1999. In fact, since the operators paid up around Rs 9,000 crore by the time of the switch-over, the amount gets reduced to Rs 42,256 crore. There was another misdemeanour committed by Sukh Ram. HFCL had bid for licences in multiple circles for an astronomical Rs 85,000 crore but Sukh Ram changed the policy by putting a cap after the bidding which allowed HFCL to get away with taking just the Punjab circle. So it remains a mystery as to where Sibal got the Rs 1.43 lakh crore figure from when the assumed loss is only Rs 42,256 crore. Tata group chairman Ratan Tata was closer to the figure when he pegged the loss at Rs 50,000 crore.

But did a switch-over to revenue-share really cause this loss According to the UPAs own admission, the government earned a total of Rs 54,840 crore by way of entry fee and revenue share at the end of 2008. Extend it to 2010, and the figure would go up to Rs 70,000 crore. Further, one of the critical features of NTP 1999 was to break the duopoly promised in 1994. It is only because of this that more players could come inso, in a sense, the whopping Rs 67,000 crore got from the 3G auctions couldnt have happened without NTP 1999 happening.

The other point in this blame game started by Sibal and Tiwari is the 52 licences given by the government without auctions in 2004 and 2006. The duo should be a little careful here since only 26 licences were given by the NDA government till April 2004, while the balance were given by Dayanidhi Maran in the UPA-1 regime between June 2004 and March 2007.

If a closer analysis of who caused more loss through this is done, Sibal and Tiwari will find themselves in an uncomfortable position. Of the 26 licences given by the NDA, 14 were for category C circles, for which no bids were received in 2001 auctions. Only 12 were in A or B category circles. On the other hand, of the 27 licences given away by UPA-1 only eight were in C category circles while the bulk were in A and B category circles, which are the more expensive circles. Even in terms of the timing, the UPA would come out more guilty since licences given in 2004 at 2001 prices were closer to the date than 2006-07, which was six years later!

Theres another problem that the UPA may have to face vis-a-vis the BJP. A Pandoras box could be opened on the connection between Maran and the Chennai-based GSM operator Aircel. This is because of the 27 licences given by Maran, 14 went to Aircel, all in either A or B category circles.

So, in the event of a larger probe, while the NDA will have to explain the WLL, the UASL and the granting of 26 licences, the UPA will have greater explaining to do, given that Rajas actions were even graver because he twisted all the rules in the books, which his predecessors never did.