Cartels, wasteful 2G use deprived govt of huge revenues, loss may be over Rs ... - Economic Times

NEW DELHI: After alleging that mobile phone companies had acted as a cartel and killed the recently concluded spectrum auctions, the national auditor has now decided to quantify the 'resultant loss' due to the failure of the airwaves sale. The Comptroller & Auditor General (CAG) has also said the "inefficient allocation and inept management of 2G spectrum" by the telecom department (DoT) had deprived the government of 'huge revenues', and added the amount the Centre had lost out would be part of its 2013-14 audits. The auditor's move may spell fresh trouble for the government that has failed to contain the damage from the CAG's 2010 report that indicted the UPA government and former communications minister A Raja for causing a loss of up to Rs 1,77,000 crore to the exchequer by selling airwaves at a fraction of their original value. In a May 20 letter to DoT, CAG has alleged that cartelisation by telcos during the two recent spectrum auctions had resulted in the Centre being unable to "fruitfully utilise 453.50 MHz of second-generation airwaves for the last one year". VALUATION BASED ON TRAI'S ESTIMATES The CAG said the value of these frequencies could be as much as Rs 85,014 crore. This valuation is based on sector regulator Trai's estimates, the auditor added. Earlier, on April 9, CAG had written to DoT complaining that private operators had acted as a cartel in the recent auction. This missive was reported by ET in its edition dated May 21. Responding to CAG's charges, Telecom Minister Kapil Sibal had told ET that CAG did not have the jurisdiction to investigate if telcos had acted as a cartel, and said the auditor could not take a stand on the airwaves sale as it was "ultimately an accountant". In its May 20 letter, the CAG has further alleged that the government's failure to check inefficient utilisation of airwaves by existing mobile phone companies had led to lower revenues in the form of reduced licence fee and spectrum usage charges, and this had caused a 'huge loss' to the exchequer. The auditor also accused the telecom department of not taking any steps to "incentivise efficient use of the scarce natural resource". The CAG communication lists out several examples to highlight what in its view amounts to inefficient use of airwaves by existing mobile phone companies. It states that Bharti, which had 10 units of 2G spectrum in Delhi, was providing services to over 90 lakh customers and had revenues of Rs 2,621.62 crore in the city. In comparison, four other operators who jointly had about 30 units of 2G airwaves in the capital had revenues of only Rs 1,757.16 crore. Copyright © 2013 Times Internet Limited. All rights reserved. via Technology - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNGzKVFFt7JysWqw-udyB7B5ihRMyw&url=http://economictimes.indiatimes.com/news/news-by-industry/telecom/cartels-wasteful-2g-use-deprived-govt-of-huge-revenues-loss-may-be-over-rs-85000-crore-cag/articleshow/20320113.cms

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