CBI probing telecom department policy deviation

The CBI investigation into the second generation mobile spectrum scam has revealed that the department of telecom (DoT) deviated from its notified policy and made exceptions for biggies in the grant of licences.

One of the biggest deviations was in the grant of time/extension to Idea Cellular to remove deficiencies in its application for UAS licence in Mumbai in 2005.

In DoT guidelines for grant of UAS licences, there is no provision for such time extension. It clearly states that a deficient application will be rejected.

However, in 2001, then telecom secretary, who was also chairman of DoT, overrode the rules to grant time to certain applicants to remove deficiencies. He did not issue a formal order in this regard, nor did he notify all applicants.

“Idea was granted over a year for rectifying deficiency in its application dated August 4, 2005, without concurrence of member-finance DoT. A letter of intent (LoI) in this regard was, however, issued only on November 20, 2006. So, not only was the suggestive 30-day extension dragged to over 12 months but approval of member-finance was also dispensed with contrary to the telecom secretary’s advice,” a senior CBI official said.

CBI officials further said Idea submitted its application for UAS licence in Mumbai on August 3, 2005, when Tata Cellular was holding 31.69% equity in the company in clear violation of the substantial equity cross-holding restriction in UAS guidelines.

Idea was allowed to carry out equity transfer by Tata Industries to comply with the eligibility criteria for UAS licence. At the same time, Idea’s priority for Mumbai was also retained ahead of others.

The subsequent/post-facto transfer of equity out of Idea by Tata Industries was treated as compliance to eligibility requirement.

“This was prima facie violation of the laid-down procedure wherein the applicant was ineligible on date of application and acquired eligibility only later, but was allowed to hold its seniority,” the one-man justice Shivraj Patil committee appointed by the government to probe 2G irregularities states in its report.

“Eligible applicants are supposed to deposit bank guarantee and entry fee within 30 days of grant of LoI. Failure to comply would result in cancellation of offer of grant of licence. There was no provision for extension. But Tata Teleservices was given an extension. It further strengthens our suspicion that DoT officials connived with private telecom players,” the CBI official said.