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PRESENTED BYPRESENTED BY:-:-

AASHISH U.JIKARAASHISH U.JIKAR

SHRIKANT R. MUNGHATESHRIKANT R. MUNGHATE

Presentation On 2G

spectrum

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What IS 2G ?

It is a term used in telecommunicationsector. It is a spectrum which support 2Gtechnology. High bandwidth is requiredfor this purpose. 2G means second-generation wireless telephonetechnology. Second generation 2Gcellular telecom networks werecommercially launched on the GSMstandard in Finland in 1991.

2G introduced data services for mobile,

starting with SMS text messages.

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What IS 2G Spectrum

Scam ?Acc. To comptroller and auditor general(CAG) o 2G licenses issued to private telecom players

at throwaway prices in 2008

o 2G spectrum allocation had caused revenueloss of Rs 1.76 lakh crore

o Rules and procedures flouted while issuing

licenses

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How did it start?How did it start?On November, 2008, Subramanian Swamy wrote to PrimeOn November, 2008, Subramanian Swamy wrote to Prime

Minister Manmohan Singh and followed it up with four moreMinister Manmohan Singh and followed it up with four more

letters seeking sanction to prosecute A. Raja in regards toletters seeking sanction to prosecute A. Raja in regards to

2G telecom spectrum political corruption scam.2G telecom spectrum political corruption scam.

When the Prime Minister Manmohan Singh didn't take anyWhen the Prime Minister Manmohan Singh didn't take any

decision Swamy went to Supreme Court. On 27 Novemberdecision Swamy went to Supreme Court. On 27 November

2010 Subramanian Swamy anounced that he will file a2010 Subramanian Swamy anounced that he will file a

criminal case against former union minister A. Raja in the 2Gcriminal case against former union minister A. Raja in the 2G

Spectrum Scam before the Special Court for CorruptionSpectrum Scam before the Special Court for Corruption

Cases in connection with the charges of irregularities in 2GCases in connection with the charges of irregularities in 2G

spectrum allocationspectrum allocation

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What is CAG

The CAG is a typical file-based governmentauditing agency. It stresses on reportingdeviations from set procedures and policiesand fails to recognise that the deviations haveresulted in speeding up economic growth.

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CAG Report on 2G Scam

Here are some of the points made by the CAG Report:

85 firms suppressed facts, gave fictitious papers to DoT

DoT kept spectrum pricing issue out of GoM's purview

A Raja ignored Prime Minister's, FM's and Law Ministry's adviceSpectrum was rare national asset, should have been auctioned

2G spectrum allocated to new players at throwaway prices

Undue advantage to Swan Telecom in allocation of spectrum

Email ID of Swan Telecom shown as that of a Reliance ADAgroup official

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Contd

Spectrum allocated beyond contracted quantity to 9 firmsincluding Bharti, Vodafone, Idea, BSNL, Reliance, Aircel

Idea and Spice not given spectrum on grounds of proposed

merger- this was against the rulesAllocation of 2G spectrum led to loss of Rs. 1.76 lakh crore

DoT did not follow its own practise of first-come-first-serve inletter and spirit

Calculation of loss based on 3G auction earlier this year

Cut-off date for license letters advanced arbitrarily by a weekThis went against time-tested procedures of government

functioning

Entire process lacked transparency

Undertaken in arbitrary and inequitable manner

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CAG indicts

Unitech WirelessUnitech has got licence for 22 circles and it

paid the Rs.1658 crore licence fees for eachcircle but the company sale their 67.25%equity for Rs.6120 crore to the telenor acompany of Norway

Telenor has valued the spectrum of the

companyCAG said that if we see this deal then the fees

for the allotment of license is betweenRs.7758 crore to Rs.9100 crore on the other

way if it was not their then the govt. will getthe fees between Rs.58000 crore to Rs.68000

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Who is A. Raja?Andimuthu Raja has come a long way from

being a lawyer in rural Tamil Nadu.

The former Communication minister whomake the 2G spectrum scam

Alloted the licence which are given in 2008 at2001 prices of Rs. 1,658 crore.

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WHAT ARE THE CHARGES

ON FORMER TELECOMMINISTER A RAJA?CHEAP TELECOM LICENSES-

Entry fee for spectrum licenses in 2008 peggedat 2001 prices.

Mobile subscriber base had shot up to 350million in 2008 from 4 million in 2001.

NO PROCEDURES FOLLOWED-Rules changed after the game had begun

Cut-off date for applications advanced by a week

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Contd.Licenses issued on a first-come-first-served basis

No proper auction process followed, no bids invited

Raja ignored advice of TRAI, Law Ministry, Finance Ministry

TRAI had recommended auctioning of spectrum at market

rates

FAVOURITISM, CORPORATES ENCASH PREMIUM-

Unitech, Swan Telecom got licenses without any prior

telecom experience.Swan Telecom given license even though it did not meet

eligibility criteria

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Contd.Swan got license for Rs. 1537 crore, sold 45%

stake to Etisalat for Rs. 4200 crore.

Unitech Wireless got license for Rs. 1661 crore,

sold 67.25% stake for Rs. 6200 crore.

All nine companies paid DoT only Rs. 10,772crore for 2G licences

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