1. 2G SPECTRUM SCAM

2. WHAT IS SPECTRUM?
Spectrum is specific range of electromagnetic
wavelength, which is used in radio, TV
broadcasting, mobile communications and internet
facility. For AM 540KHz, Cable TV 145-860MHz, 3G
2100MHz, broadband 2300MHz spectrums are used.

3.  2G is short for second-generation wireless
telephone technology.
 The wavelength between 800-1900MHz is called
2G spectrum, which is useful for mobile
communication technology.

4. WHAT ARE THE USES OF 2G SPECTRUM?
Second generation networks
are digital. They prevent
eavesdropping to some extent.
2G devices emit less radiation.
The penetrative levels are high.
Text messaging, e-mail sending
are made possible due to
digitalization. GPRS,EDGE
technologies are up-gradation in
2G technology. MMS facility is
initiated. Pocket internet is
made possible.

5. WHO ALLOTS 2G SPECTRUM TO
COMPANIES?
As it is national property, people have right over it.
As people have elected their representatives, they
have the power to allocate this resource. As
government is divided for administrative
purposes, it is the onus of telecommunication
ministry to allocate to various telecom companies
and the income generated should be used for
welfare of people.

6.  In 2008,the UPA, issued 122 new telecom licenses to
several domestic companies with little or no
experience in telecom sector, and at a price set in
2001.
 The shortfall between the money collected and the
money which the law mandates to be collected is 1.76
lakh crore rupees.

7. 2G SPECTRUM CASE: A CHRONOLOGY
 - Oct 22, 2009: The Central Bureau of Investigation (CBI)
files a first information report (FIR) against unidentified
officials of the department of telecommunications on the 2G
spectrum (airwaves) auction, based on a reference from the
Central Vigilance Commission.
 - November first week, 2010: Media publishes contents of the
Comptroller and Auditor General (CAG) report on the 2G
spectrum auction. The CAG said the public exchequer
suffered a notional loss of Rs.1.76 lakh crore ($40 billion) due
to faulty auction procedure under the then communications
minister Andimuthu Raja in 2008.
 - Nov 9, 2010: Protests start by the National Democratic
Alliance (NDA), the Left and other parties, which demand a
joint parliamentary committee (JPC) probe into the spectrum
scandal which washed away the five-week winter session of
parliament.

8.  - Nov 14, 2010: Raja submits his resignation to Prime Minister
Manmohan Singh in New Delhi. Claims he did no wrong.
 - Nov 16, 2010: CAG report on 2G spectrum allocation tabled in
both houses of parliament amidst uproarious scenes.
 - Dec 8, 2010: The CBI raids the house of Raja and premises of
former aides Siddharth Behura and R.K. Chandolia in New
Delhi. It also raids houses and offices of Raja's
relatives, associates and some journalists and social workers in
Tamil Nadu linked to the DMK and Raja. The CBI claims
recovering incriminating documents.
 - Dec 15, 2010: The CBI raids the houses and offices of Niira
Radia, a corporate lobbyist linked with Raja. She is
subsequently questioned by the CBI several times.
 - Dec 24-25, 2010, and Jan 31, 2011: The CBI questions Raja in
New Delhi.
 - Feb 2, 2011: The CBI arrests Raja, Chandolia and Behura.

9.  - April 2, 2011: The CBI files charges against nine people and three
firms -- Raja, Chandolia, Behura, Swan Telecom promoter Shahid
Balwa, director Vinod Goenka, Unitech director Sanjay Chandra and
three officials from the Reliance Anil Dhirubhai Ambani Group --
Gautam Doshi, Hari Nair and Surendra Pipara.
 - April 20, 2011: Special city court denies bail to
Goenka, Chandra, Doshi, Nair and Pipara.
 - April 25, 2011: In a major embarrassment for
Karunanidhi, daughter Kanimozhi named co-conspirator, along with
Sharad Kumar of Kalaignar TV, Karim Morani of Cineyug
Films, and Asif Balwa and Rajiv B. Agarwal of Kusegaon Realty.
 - May 20, 2011: Kanimozhi's bail plea rejected. She is sent to
judicial custody in Tihar Jail. Sharad Kumar also sent to jail.
 - June 20, 2011: The Supreme Court refuses Kanimozhi's bail plea.
 - July 6, 2011: The CBI files a status report in the Supreme
Court, alleging that Maran had forced telecom promoter C.
Sivasankaran to sell his Aircel stake to the Maxis group considered
close to his family.
 - July 7, 2011: Maran resigns from the union cabinet.

12. WHO ALL BENEFITED FROM THIS SCAM ?
 2G spectrum was allocated beyond contracted quantity to 9
firms including Bharti, Vodafone, Idea, BSNL, Reliance, Aircel,"
the report said.Niira Radia is said to be involved. Read her
details.
 Department of Telecommunications (DoT) circumvented the
rules to help Swan Telecom, which effectively acted as a front
for Reliance Telecommunications. The charges in the CAG
report are that Swan should not have been considered for a
license because Reliance Communications held 10.7% stake in
Swan - and according to the rules, a telecom operator cannot
own more than 10% stake in another telecom company
operating in the same service area. "Email ID of Swan Telecom
was shown as that of a Reliance ADA group official
 Another big beneficiary of the 2G spectrum allocation was
Unitech Wireless, which had no experience in the
telecommunication sector.
 After Unitech got the license for a throwaway price of Rs. 1,661
crore, it sold 60 per cent stake to Telenor Asia for a whopping
Rs. 6,200 crore

13. OTHERS IN THE NET
 DMK chief M Karunanidhi's daughter and MP Kanimozhi who has
been named by the CBI as a co- conspirator with A Raja
 Shahid Balwa, the promoter of Swan Telecom, who the CBI believes
had a central role in the 2G spectrum scam. He has been accused of
colluding with former Telecom Minister A Raja by allegedly
channelizing kickbacks Raja got from the spectrum sale into the real
estate
 Unitech chief Sanjay Chandra and DB Realty founder Vinod
Goenka who have been chargesheeted for cheating and conspiracy
 Three senior executives of Anil Ambani controlled ADAG, Gautam
Doshi, Hari Nair and Surendra Pipara. All these are currently lodged
in Tihar Jail
 Former telecom secretary Sidharth Behura, who allegedly shut
counters to physically block other telecom companies, faces the
same charges as Raja. And so does Raja's Personal Secretary RK
Chandolia

14. Comptroller and auditor Central Bureau of
General of India Investigation
Central Vigilance
Directorate of Enforcement
Commission

15. COMPTROLLER AND AUDITOR GENERAL
OF INDIA (CAG)
 The Comptroller and Auditor General of India (CAG) said it
has submitted to the government the report on the 2G
spectrum allotment that is presumed to have caused a revenue
loss of up to Rs. 1.76 lakh crore.
 CAG has accused the telecom ministry for undervaluing 2G
spectrum, sold to new players in 2008, and held that the
allotment price was not realistic, which has caused a revenue
loss of up to Rs. 176,700 crore to the government.
 The report is also believed to have castigated telecom minister
A Raja for ignoring the advice of finance and law ministries on
allocation of 2G spectrum to benefit a few operators.
 It is also believed to have criticized telecom regulator TRAI
standing as a helpless spectator when its recommendations
were being ignored or misused.
 The CAG report said the price at which the spectrum was
allotted in 2008 was based on 2001 prices, which was quite
low and has resulted in a loss to the government exchequer.

16. MEDIA PERSONS ACCUSED
 Nira Radia, a corporate lobbyist whose conversations
with politicians and corporate entities were recorded by
the government and leaked creating the Nira Radia tapes
controversy
 Barkha Dutt, an NDTV journalist alleged to have lobbied
for A. Raja's appointment as minister
 Vir Sanghvi, a Hindustan Times editor alleged to have
edited articles to reduce blame in the Nira Radia tapes
 Rajdeep Sardesai, a CNN IBN senior editor

17. THE ROLE OF KALAIGNAR TV
One of the companies named by the
CBI in the 2G scam - Swan Telecom -
allegedly sent Mr Raja a Rs. 214-crore
kickback that was routed through a
maze of companies but rested finally
with Kalaignar TV channel in Chennai
that is owned mainly by Kanimozhi
and Dayalu Ammal. Together, they
have 80% stake in the company.
Sharad Kumar, the Managing Director
of Kalaignar TV, owns the balance
and has also been accused of
conspiring with Mr Raja.

18. REASONS FOR 2G SCAM:
1. Political reasons:
Co-alition governments are making central governments weaker to take
decisions. A.Raja, who was main accused, should have been removed when
he was targeted by main political parties, but he was given for second time
with the fear that DMK might withdraw its support. This decision was
because of co-alition political parties.
High spending in elections is making them resort to corruption which is
leading to scams. After huge expenditure, when they are elected they are
recovering the money they have put in elections. They are not taking care of
people by whom they are elected.
No regulations for Members of Parliament is also reason for their corruption
leading to scam. They have some benefits as they are representatives of the
biggest democracy, which are being misused by them.

19.  2. Business reasons:
Businessmen sponsor politicians
when they are in fray. After
election, they seek some
concessions from politicians for
their businesses, if they are elected.
Politicians, being workers of
people, work for these businessmen
in their offices. Businessmen
sponsoring politicians, businessmen
turned politicians
are in forefront of making scams.

20.  3.Media reasons:
Growing media activism is throwing open the
gates for crooked and worm-natured people
resort to it. Commercialization of newspapers is
the prime reason for having scams related to
them. Second reason is that they are being
honored and having direct relations with political
leaders leading to connive in their activities.

21.  4. Bureaucratic reasons:
The steel frame was turned into wooden frame long ago. It is
at the mercy of politicians. Independence of civil service is no
more. They are only submissive to their political bosses. They
are afraid of being transferred if they do not cooperate . There
are five to six transfers in a year related to honest officer
makes shiver others also. Courts do not interfere in the issues
of transfers. Administrative tribunals can not help. Most of the
Civil servants are silent spectators and coming to Mr.
Behura, who has been arrested in 2G scam, was
telecommunication secretary, not for his dishonesty but only
signing of 100 letters of issuance licenses done within days of
time.

22. THE POLITICAL CRISIS AFTER THE SCAM
 The stand-off between the government and the
Opposition over 2G scam continues. The
Opposition wants a Joint Parliamentary Committee
(JPC) to investigate the 2G scam.
 Parliament has not functioned at all this winter
session - the Opposition says it won't let the House
get to work till a JPC is announced.
 Niira Radia also seem to be involved in big way to
2G spectrum scam. She is a corporate lobbyist for
big corporate leaders like TATA group, Reliance
Industries etc

23. SHORTFALL OF MONEY
 A. Raja arranged the sale of the 2G spectrum licenses below
their market value. Swan Telecom, a new company with few
assets, bought a license for Rs. 1537 crore. Shortly thereafter, the
board sold 45% of the company to Etisalat for Rs. 4200 crore.
Similarly, a company formerly invested in real estate and not
telecom, the Unitech Group, purchased a license for Rs. 1661
crore and the company board soon after sold a 60% stake in their
wireless division for Rs. 6200 crore to Telenor.
 The nature of the selling of the licenses was that licenses were to
be sold at market value, and the fact that the licenses were
quickly resold at a huge profit indicates that the selling agents
issued the licenses below market value.
 Nine companies purchased licenses and collectively they paid
the Ministry of Communications and Information Technology's
telecommunications division Rs. 10,772 crore,The amount of
money expected for this licensing by the Comptroller and
Auditor General of India was 1,76,700 crore.

24. ADVANTAGES
 The lower power emissions helped address health
concerns.
 Going all-digital allowed for the introduction of digital
data services, such as SMS and email.
 Greatly reduced fraud. With analog systems it was
possible to have two or more "cloned" handsets that had
the same phone number.
 Enhanced privacy. A key digital advantage not often
mentioned is that digital cellular calls are much harder
to eavesdrop on by use of radio scanners. While the
security algorithms used have proved not to be as secure
as initially advertised, 2G phones are immensely more
private than 1G phones, which have no protection
against eavesdropping.

25. DRAWBACKS
 In less populous areas, the weaker digital signal may
not be sufficient to reach a cell tower. This tends to be a
particular problem on 2G systems deployed on higher
frequencies, but is mostly not a problem on 2G systems
deployed on lower frequencies.
 Analog has a smooth decay curve, digital a jagged
steep one. This can be both an advantage and a
disadvantage. Under good conditions, digital will sound
better. Under slightly worse conditions, analog will
experience static, while digital has occasional dropouts.
 While digital calls tend to be free of static and
background noise, the lossy compression used by the
codec's takes a toll; the range of sound that they convey
is reduced. You will hear less of the tonality of
someone's voice talking on a digital cell phone, but you
will hear it more clearly.

26. RECOVERY
 CPI(M) has reiterated its demand for
cancellation of the licenses of those private
Telco's who got the spectrum through the first
come first served formula and recover the
losses.
 Com. Prakash Karat, General Secretary, CPI
(M) in a statement said:” It is not enough to
arrest a few persons. The Government should
cancel these licenses and auction the
spectrum so that the revenue lost can be
recovered.”
 CPI(M) was the first to point out to this
biggest scam in the country in 2008 itself. Its
continuous exposal and also of the other
opposition parties had compelled the
Government to dismiss Communications
Minister A.Raja and appointment of JPC to
inquire in the matter.

27. INITIATIVES TO AVOID SCAMS (REMEDIES):
Setting up of preventive mechanism. Prevention is better than cure.
Preventing scams in bud stage is very important.
Ministers, civil servants relation to be reformed.
Protection of civil servants. There should be a limit for transfers
within a year.
Stopping the culture of sponsoring politicians by businessmen. It
should be dealt seriously.
Searching ways by Election Commission sponsoring for contestants
which can bring ethical and moral persons to political arena.
Saving the media from rotting through checks and balances.
People should be aware of consequences of weak governments and
should enable strong governments.

28. RECOMMENDATIONS
TRAI Links Excess 2G Spectrum Price with 3G
Auction Price – Big Mess
 TRAI in its recommendations has surprised everybody that GSM
spectrum assigned beyond 6.2MHz up to 8MHz to be charged
at current (linked to 3G auction) price and at 1.3x current
price beyond 8MHz . It has recommended no auction of 2G
spectrum even as subscriber linked criteria for allotment done
away in favor of roll out obligations.

29. OTHER KEY RECOMMENDATIONS OF TRAI ARE
 900MHz spectrum to be valued at 1.5x Current price;
1800MHz valued at 1x ‘Current’ price
 No cap on the number of operators/circle as in future
spectrum should be delinked from UAS licenses
 Uniform license fee of 6% from 2013-14
 Promoter lock-in of 3 years removed
 M&A approval only if merged entity has not more than 30%
of circle subscriber base and/or AGR.
 Spectrum cap for merged entity still kept at rather low levels
of 14.4/10.0MHz (GSM/CDMA). Further, merged entity
should pay 3G-linked price for spectrum >6.2MHz, as well
as a transfer charge at 5% of the difference between
transaction price and total spectrum price

30.  Impact of TRAI Recommendations on 2G Spectrum – The
recommendations are pro-new entrants, and pro-CDMA
incumbents (dual technology operators) like Reliance
Communications and Tata Teleservices.
 TRAI has committed a mistake of earlier recommending
Subscriber linked Spectrum allocation policy and now trying to
cover it under the 3G auction price. Well, retrospect charging
for spectrum creates uncertainty in a sector already bleeding
by irrational tariffs. Further, what is the basis of using 3G bids
for pricing 2G spectrum, as the former are driven more by
scarcity and lack of a transparent spectrum roadmap.

31. CONCLUSION:
 Whenever a scam
raises, Indian government
is dealing with scam rather
than reasons behind it.
 Loopholes in system need
to be corrected in order to
avoid these scams. If these
are not dealt properly so
many scams are on the
way for us.
 A perfect policy making
and new blood in political
veins only can help India to
be out of scam era.