Tip of the iceberg,more to follow in these columns.
Taking note of reports that CAG is investigating the loss of nearly Rs 2 lakh crore in the allotment of scarce S-band spectrum, BJP on Monday asked Prime Minister to clear the air, initiate an inquiry and take steps to recover the lost revenue.
“This whole affair is vitiated by fraud. And as a result, this country is facing not only loss of revenue but frittering away of valuable national asset which is a rare spectrum,” BJP spokesperson Nirmala Sitharaman said.
A newspaper report claimed CAG is investigating the allotment of 70 MHz from the available 2500 MHz of S-band spectrum to Devas multimedia for 20 years. The company is owned by M G Chandrasekhar, former scientific secretary at ISRO.
BJP demanded this agreement be immediately nullified and the spectrum space given to the private user be recovered.
“Secondly, we demand a comprehensive inquiry to establish the criminality in the whole matter. We also demand recovery of the lost revenue,” Sitharaman said.
The party alleged this is a “very serious scandal” as it involves a “very unique and rare” spectrum. It also said since the department of space is directly under the Prime Minister, he should immediately clarify his stand on the whole issue.
“The spectrum we are talking about is 5-G which relates to GHz. Recently, BSNL and MTNL were alloted only 20 MHz for Rs 12,487 Crore. But for allocation of 70 MHz to this private operator, the government is charging only Rs 1,000 Crore,” Sitharaman said.
Meanwhile, the office of CAG has clarified that its investigations into the issue are at a preliminary stage and the media reports should not be treated as findings of this department.
BJP also questioned the manner in which the spectrum was allocated without bringing the issue to the public domain.
“This is the first time the allocation for this band has taken place. It is a very unique band. Relates to a very high MHz frequency. And this allocation was done very quietly, without any public auctioning or bringing it in the public domain. And given to a private operator,” Sitharaman said.
She maintained that only 190 MHz of the S-band is available. Of this, 150 MHz is with the Department of Space and 70 MHz of this was alloted to Devas multimedia.
“2-G spectrum is much inferior. But 2-G spectrum related to only 4.4 MHz. CAG said here the loss was 1.76 lakh crore. 3-G is 50 MHz. Here due to media and public pressure, it went for auction. And the government’s revenue earning here was Rs 67,719 Crore,” Sitharaman said, drawing a comparison.
She alleged the loss due to this allocation of 70 MHz was Rs 2 lakh crore.
“From mid-2011, the commercial use of this spectrum is going to commence. The process of allocation was violated. Moreover, Devas Multimedia has also been given two custom-made satellites and 10 transponders for use.
Left demands a thorough probe
Terming as “very serious” reports alleging that ISRO benefited a private firm through allocation of scarce S-band spectrum without a bidding process, Left parties on Monday demanded a thorough probe into the “new scam”.
“This is a new issue. The ISRO is under the department of space which is under Prime Minister ( Manmohan Singh). This is also a new scam,” CPM politburo member Sitaram Yechury told reporters here.
CPI national secretary D Raja said the new revelations were “very serious”, a view echoed by senior RSP leader Abani Roy who demanded a JPC into the matter.
“The revelations have added a new dimension to the 2G spectrum scam. The ISRO is directly under the control of department of space headed by the Prime Minister. It is very serious as ISRO deals with space and it has implications on our security,” Raja said.
He said the issue will be discussed among the four Left parties.
Related:
Another scam in the making, this one too deals with out-of-turn allocation of the S-band spectrum by Antrix to Devas without going through a formal bidding process. The CAG has questioned this move of the Department of Space of granting the spectrum to Devas, a private player that held immense potential commercially.
Devas enjoying the S-band gave the company unlimited leverage in the telecommunication space in terms of high speed mobile communication. It has to be remembered that the auction of just 15 Mhz of similar airwaves for 3G services led to the government gaining a whopping Rs 67,719 crores to its coffers. This is when the freebie deal 70 MHz enjoyed by Devas as part of satellite launch deal with ISRO comes under the scanner for a megre 1000 crore. This happened when industry bigwigs like MTNL and BSNL had to pay Rs. 12,847 crore for 20 Mhz.
http://news.oneindia.in/2011/02/07/another-spectrum-deal-scam-worth-two-lakh-crore-aid0113.html
On Devas Multi media
A Rs. 600 crore deal, wherein the Indian Space Research Organization (ISRO) leased 60 Mhz of spectrum to little known Devas Multimedia five years ago is now under the scanner, reports the Economic Times, citing sources. We had written about Devas in the past, in 2008, when it received an approval from India’s FIPB for raising $75.75 million from German major Deutsche Telekom, thus valuing the company at $443 million. At that time, the company didn’t even have a website, and very little could have been ascertained about them, and what they were planning to do.
The legitimacy of the deal is being questioned. Devas seeks to offer data services to mobile terminals – streaming video, audio, web access, on PC data cards, mobile phones, and vehicle-mounted devices.
ET quotes anonymous executives offering two opposing sides to this issue of allocation of spectrum:
– That ISRO was not authorized to lease out the spectrum, and a probe into the Devas deal began when demands were made for broadband spectrum in the 2.5 GHz band to be auctioned.
– That Devas took a risk by leasing this spectrum, when no one else was willing to, and invested close to $300 million in order to launch services, and one can’t penalize the company just because the value of its spectrum as appreciated.
According to Devas’ website:
– It was founded by MG Chandrasekhar, and ISRO veteran
– Has been funded by Deutsche Telekom, Columbia Capital and Telcom Ventures.
– It has on its board of directors, Kiran Karnik from NASSCOM and Satyam Computers, as well as executives from ISRO / Antrix Corporation, Sirius XM Satellite Radio, Warburg Pincus.
Our take on this deal is that if a deal was inked by an agency not authorized to license spectrum, then it is invalid from the very beginning. That’s what the government and courts will have to determine. A lot of money – $300 million according to an ET source – has been invested over a long period of time. Either this deal will be legitimized (if it is indeed not legit), or heads will roll.
The other, perhaps more important point to note, is that according to the ET report, Devas is on the verge of launching services. Telecom operators have paid a lot more money for 3G and BWA spectrum, so perhaps there may be a move to delay or prevent Devas’ launch by questioning the legitimacy of the deal.
Related:
– Devas Multimedia’s request to introduce a new foreign collaborator approved
– Deutsche Telekom Eyes Indian ISP Space; Devas Multimedia Looks To Raise Funds
– Mobile TV Co Devas Multimedia To Sell 17 Pc Stake For $75 Million To Deutsche Telekom
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