The Great Telecom Crime

There has been much debate and discussion on the scams in the Telecom sector over the last many months – but it’s time now for real action.
a) Time to identify the culprits and wrongdoers and to punish them and,
b) to recover the money. Scams like this cannot simply be the subject of Parliament debates and disruptions and one of the many breaking news in media – Scams are visible signs of dysfunction and white collar crime and the focus now must be to treat this as a crime and identifying the culprits and ensuring that our system of checks and balances prosecutes them under the law. To make the rhetoric coming out of Delhi of being an Economic superpower a reality – we need to act like one and not like a banana republic.

The background to this crime is pretty simple to understand. With the current set of 3G Cellular licenses tenders yielding the Government over Rs 10,000 Crores each (and the bidding isn’t done yet) amidst a general economic environment that isn’t really still the best (i.e. if International economy was booming as in 2007 the proceeds and value would’ve been higher) – the big question that now needs to be asked is this – How did the 2G Cellular licenses sold from 2004 to 2007 onwards get the Government only Rs 1500 Crores each? Is it because the Government chose not to tender these and opt for a more dubious route?

The answer to that question is an obvious and resounding YES. What is the loss to the Government? Assuming that these 2G licenses were to be valued at marginally less than 2G licenses at Rs 10000 Crores each (there’s no evidence pointing to a need to assume 2G as cheaper than 3G licenses and using the secondary transactions of Unitech and Swan as benchmarks), the loss to the Government is in the region of Rs 50,000 Crores – That’s a realistic estimate and doesn’t include the spectrum given as follow-on spectrum to existing Telecom companies. This loss to the government is a direct gain to a handful of corporates. This is swindling by any definition. That is why it’s necessary to start referring to this as a crime and not a scam anymore. The word scam has been overused and increasingly sounds trivial and flippant.

The crime is clear – swindling the Government of Rs 25,000 Crores or more. Now the question is who are the perpetrators of this great swindle? While the cast of suspects who can and should be indicted for these will be all the obvious political actors i.e. the Ministers of Telecom who have chosen to give away these licenses starting from 2004, it is as important that the Independent Regulators TRAI and bureaucrats are held to account. While we are almost reconciled to the bureaucracy being party to this, the Independent regulators TRAI were created by a statute of Parliament precisely to create transparency in the Telecom sector and to protect the sector and all its participants from Political shenanigans that is almost natural to any lucrative contracting and licensing process in our system.

The current Minister Raja has repeatedly relied on TRAIs recommendation as justifying his actions. In many cases he had flouted the TRAI recommendations, but in this case he used the recommendations as it met his needs. The investigation must look into whether the Regulator or the TRAI at anytime were willing accomplices to this minister or any previous minister’s political shenanigans.

If this government is serious about this being a crime then two things need to be done
a) The swindled money must be recovered from the beneficiaries of the swindle. The significant monetary gains that have accrued to these few corporates must be recovered either through additional fees /levies or taxes.
b) An investigation launched to identify ALL the culprits and process of law being launched on them.

This investigation will also be a much needed review about the institution of the Independent Regulators. The practise of stuffing them with retired or serving bureaucrats has made them a second bureaucracy, with little or no will to establish and affirm their independence from politics And when the Regulator becomes the willing participant or silent observer to the fraud , then there is a very serious problem. It’s akin to the Police or a judge is party or silent observer to a crime, then the punishment that needs to be meted out needs to be exemplary, to set an example and to send a message to the rest of the Regulators. That is why a thorough investigation into this entire licensing crime and the role of the Regulator is justified and the objective must be to have perpetrators identified and punished.

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9 Responses to “The Great Telecom Crime”

  1. ngabbita  on May 18th, 2010

    Can’t agree with you more.Lip service not sufficient The money should be recovered. This is a white collar crime and if i can call so, a white Khadi crime as well. Manmohan Singh can not be considered clean till such gigantic scandals are addressed. These people used to call Vajpayee as the right man in wrong party. If the PM does not respond to this scam and take action against the minister and TRAI, i am compelled to believe that the PM is callous or impotent or worthless undeserving of nation’s respect.

  2. soulinexile  on May 18th, 2010

    Do you really expect anyone will investigate this?
    When someone swindles 25000 he goes to jail…!
    When someone swindles 25000 crore he goes to cabinet!
    When someone swindles 25000 he’s probably done it alone
    When someone swindles 25000crore-he’s got accomplices galore

    One minister can not digest so much!!! Scores of Swiss bank accounts would have got credits… including key pple in media/opposition etc… coz to me - there has been nothing but mere posturing on this issue by all!

  3. Amit  on May 19th, 2010

    We need more transparency in the decision-making of the government and more people to speak out for a participatory democracy. Modern technologies allow democracies to be real-time.

  4. adsraj  on May 30th, 2010

    Hi Rajeev,

    Complete agree with you.

    But would like to know, what as an MP, you can do to recover the money.

  5. cokevijay  on June 8th, 2010

    dear rajeev,

    i find it a more appropriate article from a seasoned ex-telecom person who dealt with all these alike situations before.but like T20 when nobody lets the cat out of the bag even for no other reason this crime will be washed,dried, pressed ad worn again without shame and guilty very you mentioned filling trai and others with experienced ex bureaucrats will further complicate the crime as they are well versed wto work hand in glove.our govement is a governence of consensus.state ministry for rajya saba seat,state cabinet ministery seats for OUTSIDE support,cabilet berths for INSIDE support and goes have seen and tasted both ends of a fruit,could give us a fine picture.expecting many more articles…BEST WISHES

  6. Yashaswi  on June 14th, 2010

    Hi: You are the first MP whom i searched for on google! And this is because of two drastically different reasons - 1) I saw your discussion with Pranojoy Guha on Loksabha TV (pricing of telecom spectrum) and 2) Your sponsor a ‘devotional hour’ on radio Indigo in Bangalore which is spiritually cleansing!

    You made quite a few relevant points in the discussion - the best of them being that our very belief that politicians and bureucrats wont have vested interests is misplaced and hence the need for an alert and active third party independent regulator. Your passion to make a difference to the system in which the public in general is losing confidence is commendable. And the confidence to do that comes from your mighty impressive achievements! We need many more like you, and pretty soon - dangerous maladies need drastic remedies…

    Carry on the good work - you belong to the rare breed of politicians who become great just by doing good.

    Wish you all the best. Hope to see you as the minister of industry/telecom/science and tech soon.


    ( )

  7. subhajit  on June 17th, 2010

    I commend and congratulate Rajeev C. for the bold stand he has taken on this issue. I found his arguments in Lok Sabha TV interview with Prananjoy Thakurta very compelling. Wish we had more such people in the high offices of our government & bureaucracy.

    Subhajit Sen

  8. Rajnish  on December 10th, 2010

    Reforming India and eradicating poverty, an alternative proposal to sessions in the parliament

    1. Delink corporate funding and politics. No campaigning, setting up posters, banners etc should be allowed. Instead, at tax payers cost, each political party should be provided an opportunity to air their views. For eg, in rural villages, a stage with a fixed time for each speaker. In cities, a TV slot with a fixed time.

    2. Make Indian govt services the highest paid job. This will attract the best talent. The punishment if found corrupt or negligent should be severe.

    3. Reform judicial system - set time lines, remove elaborate procedures, simplify the process.

    4. Bring in incentives to encourage renewable energy and discourage use of fossil fuels.

    5. Remove inorganic farming, GMO seeds, pesticide companies. Encourage farmers to farm organically. Provide for systems where they can sell directly to the end consumer … like farmers markets… pay by use logistic systems. This will provide them incentive to live in the villages, farm and lead dignified lives rather than work as construction labor for people in the cities.

    6. Set minimum criteria for politicians …. honesty, morals, past experience, demonstrated capabilities.

  9. T D Malgonkar  on December 10th, 2010

    Over 1 billion people, and how come we are unable to find even a single man with a stick to do the trick? Sixty years down the line and we are just rotten and chaotic to the core because of you and I being mere mute spectators. I dont think even half the Indian population can even count that far to exclaim what that figure represented in the telecom swindle really is. As far as Unitech Ltd goes, the less said the better. I hold a permanent injunction order OS 1232/2007 against them for my property in Bangalore, for an offense actually criminal in nature, so you can imagine what this company is really up to.

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