Fishy frequencies; CBI finds more irregularities with handling of spectrum

30 Jul 2012

India’s Central Bureau of Investigation (CBI) has said that Bharti Airtel and Vodafone India were given additional spectrum in ‘undue haste’ in January 2002, the Business Standard Reports. The CBI claimed that the then-communications minister, Pramod Mahajan, had bypassed the opinions of wireless advisor, the finance ministry and the Telecom Commission to allocate spectrum to the two cellcos beyond 6.2MHz. The CBI accused the minister of undercharging for the spectrum, leading to losses to state coffers of some INR5.08 billion (USD91.88 million). Further questioning Mahajan’s actions, the CBI found that a technical committee report had shown that the cellco’s existing spectrum holdings were sufficient for operations, provided that they make optimal use of their networks – indicating that there was no need to rush the process. Department of Telecommunications (DoT) officials were also accused of showing favour to certain operators. The investigation is currently under review and is expected to progress further at the end of August.

In related news, the CBI has also linked a ‘suspicious transaction’ of USD51 million in December 2007 to the 2G spectrum scam. Investigators are probing a transfer of USD51 million from Unitech Ltd to its wholly owned subsidiary Unitech Overseas under the belief that the funds were used as a bribe in its efforts to acquire wireless concessions. Once transferred overseas, the entire value was eroded by January 2009. The CBI said that the proximity of the investment and its subsequent erosion indicated ‘a strong suspicion of the amounts having been paid as quid pro quo.’