STATESMAN NEWS SERVICE
New Delhi, 12 November
Upping the ante against the UPA government on corruption, the BJP today said a fresh scam is in the making in the telecom sector. The party said the government move to sell spectrum at reduced prices will result in operators getting spectrum “free of cost” and will enable them to garner “windfall gains”.
Expressing dismay at the new ‘reserve price’ of spectrum as recommended by the Telecom Regulatory Authority of India (TRAI), senior BJP leader Yashwant Sinha urged the Prime Minister to reject the proposal as the steep reduction in costs will benefit a few operators and cause a loss to the exchequer.
In a letter to the PM, the former Finance Minister said in the event of “steep reduction in spectrum reserve price and spectrum usage charges”, the exchequer stands to lose anything between Rs 27,000 crore to Rs 35,000 crore.
Citing media reports that price of 1 MHz of spectrum in 1800 MHz pan-India basis has been reduced from Rs 2376 crore to Rs 1496 crore or 37 per cent, Mr Sinha said, “In case of key circles like Mumbai and Delhi, this reduction is much steeper, by more than 50 per cent”.
“…this implies that the government will not only be giving away precious spectrum to the operators free of cost, without earning a single penny for the exchequer, but will also enable the incumbent operators to garner windfall gains,” he said in his 3-page missive.
Mr Sinha said the main reason given by the TRAI for such a steep reduction is failure of auctions held in November 2012 and March 2013. However, he argued, “contrary to TRAI’s perception, the telecom sector in India is showing robust growth. The auctions failed because of the collusion of incumbent operators and not because of the high reserve price”.
He said going by the TRAI recommendation, each operator could be saving Rs 74,000 crore in 20 years.
The former Finance Minister noted that these recommendations of TRAI contradict its own arguments. Last year, TRAI had defended and justified the reserve price of Rs 3,622 crore for pan-India 1 MHz spectrum in 1800 MHz band. “I fail to understand why the same body now has junked its own recommendations within one year and has recommended such a steep reduction in the reserve price. This is not expected from a sector specialist regulator,” Mr Sinha said.
“I urge your (Prime Minister) office to take immediate remedial measures and in order to realise the true economic value of spectrum and to uphold the interest of the citizens,” Mr Sinha wrote in his letter.