Contrary to government auditor CAG linking the allotment of 2G spectrum prices with that of 3G, telecom regulator Trai said that it had recommended such a linkage this year for allotment of spectrum beyond 6.2 Mhz only stipulated under licences.
Making it clear that it had not seen the CAG report that intensified the demand for ouster of Telecom Minister A Raja, Trai Chairman J S Sarma said neither it was asked nor it had recommended any pricing for the licence of 2G spectrum that was given to operators in 2008.
In fact, it was in 2010 that Trai recommended that any further allotment of additional spectrum beyond the contracted limit of 6.2 Mhz or that at the time of renewal of licences after 20 years be linked to the price discovered for 3G.
Castigating Raja on issuance of licences and 2G spectrum, the Comptroller and Auditor General has said that that faulty prices and favourtism had caused a loss of up to Rs 1.76 lakh crore to the government, a figure that is believed to have been arrived taking into account the 3G prices that were arrived after a competitive bidding.
Raja, however, has maintained that he gave the licences and spectrum in 2008 on the basis of New Telecom Policy 1999 and price discovered in 2001, a practice followed by his predecessors, including his party (DMK) colleague Dayanidhi Maran and BJP's Arun Shourie during NDA regime.
Trai did not link 2G spectrum with 3G prices, an issue which created a political storm leading to demand for ouster of Telecom Minister A Raja after the government auditor CAG said that allotment of licence and 2G spectrum in 2008 had cost the exchequer up to Rs 1.76 lakh crore.
Going by this, CAG's estimates of the notional loss to the exchequer due to non-auction of 2G spectrum could be much below the reported Rs 1.76 lakh crore.
"I have not seen the CAG report. So I will not like to comment on that," Sarma said.
He clarified that Trai recommendations clearly stated that additional 2G spectrum beyond 6.2 Mhz or fresh spectrum after the contracted 20 years should be linked to the price of the 3G spectrum.
"Any spectrum beyond the contractual 6.2 Mhz should be valued at the current prices (of 3G). Moreover, after the expiry of the 20 years license period the prices of all the spectrum should be linked to the current prices," he said.
The CAG has submitted its latest report to the government saying non-auction of 2G spectrum in 2008 may have cost the exchequer up to Rs 1.40 lakh crore besides over Rs 36,000 crore on account of additional spectrum to existing players beyond 6.2 Mhz.
The Department of Telecom (DoT) had given new licences bundled with start-up 2G spectrum in 2008 to 121 licencees at the 2001 price of Rs 1,658 crore for pan-India operations.
The CAG has also pointed out that the telecom ministry went ahead with distribution of licences despite finance and law ministry's opposition to non-auction method of alloting spectrum.
TRAI has also said that it was still studying the method for arriving at methodology for linking 2G spectrum price with that of 3G and hope to submit its report to DoT in next 3-4 weeks.