4G Spectrum auction ~ no first come first served

Vindication and validation not just for former Comptroller and Auditor General Vinod Rai but for Supreme Court and the CBI as well….. writes Firstpost on the tainted Spectrum auction underway now. Today [5th Feb 14]  was the third day of the telecom spectrum auction with eight companies in fray for two sets of airwaves frequencies that can be used for 4G services.   A spectrum auction is a process whereby a government uses an auction system to sell the rights (licences) to transmit signals over specific bands of the electromagnetic spectrum and to assign scarce spectrum resources.

2G (or 2-G) is short for second-generation wireless telephone technology. Second generation 2G cellular telecom networks were commercially launched on the GSM standard.  Three primary benefits of 2G networks over their predecessors were that phone conversations were digitally encrypted; 2G systems were significantly more efficient on the spectrum allowing for far greater mobile phone penetration levels; and 2G introduced data services for mobile, starting with SMS text messages. 2G technologies enabled the various mobile phone networks to provide the services such as text messages, picture messages and MMS (multi media messages). After 2G was launched, the previous mobile telephone systems were retrospectively dubbed 1G.

3G, short for third Generation, is the third generation of mobile telecommunications technology. 3G telecommunication networks support services that provide an information transfer rate of at least 200 kbit/s. 3G finds application in wireless voice telephony, mobile Internet access, fixed wireless Internet access, video calls and mobile TV.

A new generation of cellular standards has appeared approximately every tenth year since 1G systems were introduced in  early 1980s.  “Auction has started. There is excess demand in 900 Mhz band and we expect the momentum to continue,” a DoT official said. On the second day of auction, telecom companies put in bids worth a total of about Rs. 45,000 crore that brings hope for the government to curb fiscal deficit. The fiscal deficit at Rs. 5.16 lakh crore has crossed 95 per cent of budget target in the first nine months of 2013-14.

3G auction in 2010 lasted for 34 days, broadband wireless airwaves ended in 16 days while 2G auction in November ended in two days and CDMA auction in March concluded the same day.  Earlier, in what is ridiculed in most quarters, Telecom Minister Kapil Sibal attributed demand of airwaves to rationalisation of base price which was about 7 times more than the price of Rs. 1,658 crore at which telecom companies were given pan-India permits between 2001 to 2008.

Not only has the spectrum allocation received an overwhelming response from existing operators across the board, but it has firmly established the long-term value of spectrum to companies - who in most cases, especially in the metros, are bidding based not just on the voice potential of the business but the future of data and Internet access - a vast majority of which will occur through mobile devices and use of spectrum, especially 900 MHz. When the 2G scam first occurred in January 2008, the government ignored all protest against the multiple, unilateral and illegal actions of the then Telecom Minister A. Raja, who decided after informing the  PMO  that he will not only proceed to give spectrum on a 'first-come-first-served basis', but in fact will do so by changing the definition of 'first-come-first-served'.

The 2G spectrum scam was a scam involving politicians and government officials in India illegally undercharging mobile telephony companies for frequency allocation licenses, which they would then use to create 2G spectrum subscriptions for cell phones. The shortfall between the money collected and the money that the law mandated to be collected is estimated to be  1766.45 billion (US$28 billion), as valued by the Comptroller and Auditor General of India based on 3G and BWA spectrum auction prices in 2010.  The exact loss continues to be disputed with  Kapil Sibal, the Minister of Communications & IT, claimed in 2011, during a press conference, that "zero loss" was caused by distributing 2G licenses on first-come-first-served basis. Prashant Bhushan of the Aam Aadmi Party on Tuesday sought a probe into “fresh evidence” in the 2G scam that he claimed suggested cover-up attempts to protect family members of the former Chief Minister, M. Karunanidhi, who are accused in the case.

Away from all the melee,  net worth of Indian billionaires could eliminate absolute poverty in the country twice over, says IMF's Lagarde.  The net worth of India's billionaire community has soared 12-fold in 15 years, which is enough to eliminate absolute poverty twice over in the country, where income inequality is also on the rise, according to the International Monetary Fund (IMF).

There are inequalities and common man is measured by poverty line, in the Nation where thousands of crores are nothing to some.

With regards – S. Sampathkumar

5^th Feb 2014.

Inputs taken from Firstpost, Daily Mail and India today.