Central Bureau of Investigation (CBI) has detailed how Shyamal Ghosh, the then telecom secretary, bypassed the wireless advisor and a technical committee at the Department of Telecom (DoT) on the issue of pricing and allocation of additional spectrum to telcos.
Thereby, Ghosh along with a few other DoT officials, caused a loss to the exchequer and a corresponding gain to Bharti Airtel and Vodafone — then Hutchinson and Sterling Cellular, according to the probe agency’s first information report (FIR) in the spectrum allocation case during the NDA regime in 2001-02. The case relates to a time period when BJP leader Pramod Mahajan was the telecom minister.
CBI has alleged in its FIR that Ghosh along with the then DDG telecom J R Gupta and the beneficiary companies approved the allocation of additional spectrum up to 10 MHz at minimal incremental revenue share, when even 8 MHz was not justified as per the recommendations of the technical committee. According to CBI, this caused an “undue pecuniary benefit of Rs 506 crore” to the beneficiary companies which the department of telecom would have earned.
The FIR has alleged that Ghosh had ‘dishonest intentions’ when he did not seek any justification from the technical committee in effectively bringing down the requirement of subscriber base from nine lakh to four-five lakh for the allocation of additional spectrum.
DoT’s decision was prompted by a request from the Cellular Operators Association of India (COAI), which represents Global Systems for Mobile Communications (GSM) firms like Bharti and Vodafone Essar. It sought additional spectrum for mobile services for meeting the grade of services and coverage needed in high density areas, the FIR says. For the same, the COAI representatives made a presentation before Ghosh on October 4, 2001. Subsequently, additional spectrum of 1.8+1.8 MHz was allocated in metros which COAI claimed was still inadequate, it adds.
Thereafter, a technical committee was formed on October 23, 2001, which recommended that spectrum of 6.2 MHz was sufficient for a subscriber base of about 9 lakh per operator. In view of the then rate of growth of teledensity, the committee also recommended that to encourage optimal use of spectrum “suitable incremental charges at a higher rate should be levied”, the FIR points out.
However, on January 10, 2002, Ghosh put up a note before Mahajan, about allocation of additional spectrum and proposed to impose an additional allocation fee rather than increasing the revenue share, according to the CBI FIR.
By month end, on January 31 2002, Gupta in conspiracy with Ghosh, abused his official position and highlighted the need to allot additional spectrum in metros and falsely mentioned that a consensus has emerged after discussions that additional spectrum may be allotted to operators after they reach the level of four lakh customers, the FIR has stated.
"Ghosh did not wait for the comments of the then Member (Finance) for deciding the percentage of Adjusted Gross Revenue to be charged from operators on account of allocation of additional spectrum beyond 6.2MHz." CBI said that Ghosh bypassed the wireless advisor for the reason that he was retiring on the said day.
In its FIR, CBI said, “The aforesaid public servants moved the file in such haste and designed manner that the key persons in charge did not even have an opportunity to see the file for their comments.”
CBI said that Ghosh bypassed the wireless advisor for the reason that he was retiring on the said day. And, another member, Telecom Commission, was bypassed on the pretext that he was out of office, CBI has said. But this official was available in the office till the afternoon that day, the FIR has noted. The final approval on the note was accorded by the then telecom minister Late Pramod Mahajan on January 31 2002.
On February 1 2002 , immediately after this approval came through, Bharti Cellular, Sterling Cellular and Huthinson Max Telecom were allocated additional spectrum.
