It is the mood of the present, generated by the resignation of controversial communications minister A. Raja and the sense of some political uncertainty that has ensued, that probably explains the recent recommendation of the Telecom Regulatory Authority of India to cancel 62 of the 122 spectrum licences issued by the former minister.
Knowledgeable commentators had indeed begun to advise such a course so that some of the money lost to the national exchequer be recouped and politically connected offenders brought to book.
The licence-baggers were supposed to roll out their network in 10 per cent of every district within a year. Not only did they renege on this, they also got away without paying the penalty of `5 lakhs per week per circle for the first 13 weeks of delay, increasing progressively to `20 lakhs for delays up to 26 weeks. Could this have happened without a quid pro quo? The real story is that the licence-baggers were waiting for buyers for these licences so that they could exit the scene after making a killing. Many of them had nothing to do with telecommunications in the first place, but had the political clout to get the scarce and much-in-demand spectrum. For them it was a big money-making business, as illustrated by the case of Swan Telecom — earlier controlled by the builders DB Group. It used influence to get the licence for `1,651 crores and sold it to a party from the UAE for `4,000 crores without any network or even equipment being ordered. Others were waiting to do the same. They also realised that revenues per minute were dropping in the sector and wanted out.
With the Trai recommendation coming in, the government should act on it with dispatch unless it wishes to be regarded with suspicion even with Mr Raja gone. Noises are already being made about customers being harmed if the licences are taken away. Some would rather that penalties weren’t collected, arguing speciously that these are enormous. The offending companies claim to have 1.3 crore subscribers, but there could be a well-founded view that the real figures might be just half of this. So it won’t be a big deal if the licences are indeed revoked, repudiating the self-serving arguments being advanced. Let us not reward the offenders. A provision in the licence says that if for some reason a party cannot fulfil its obligations, then the government can take it over. Thus, it could be that either BSNL or MTNL can take over the subscribers who might find themselves at a loose end. Another measure that needs to be adopted is to auction the spectrum that has been taken over to the existing serious players, whose could number about 200 out of the 575 who applied for licences. The government is said to have about 10-15 megahertz of spare spectrum. This could be auctioned. Based on the price-level achieved for this transaction, it could auction the spectrum of the 62 licensees named by Trai. Only the serious players will remain under this method, and the government might stand to earn handsomely as it did for the 3G auction.
It is to state the obvious to suggest that the government must also immediately seek to trace the money that the national exchequer has lost, no matter how influential the carpet-baggers might be — whether they are politicians, bureaucrats or corporate entities. Here we are not talking of relatively small sums that could be hidden in a mattress, Sukh Ram style. Worse, the stakes are likely to get political soon, and a cleaning up of the Augean stables cannot be postponed for long.