CAG on spectrum auctions: Govt did nothing to bust telcos' cartel

For the United Progressive Alliance, telecom is turning out to the quicksand which is pulling it down to nadir of ignominy.

The Comptroller and Auditor General (CAG) has again criticised the actions of the government and private telecom companies in the recently concluded spectrum auctions.

According to media reports, the CAG has said the private telecom companies colluded to fail the auctions and the government did nothing about it.

The CAG has said this in a communication to the telecom department last month, the reports said.

[caption id=“attachment_801029” align=“alignleft” width=“380”] BSNL said this in an affidavit filed in the Supreme Court case between the DoT and the telecom companies regarding their 3G roaming pacts. Reuters[/caption]

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According to a report in the Economic Times, the auditor has alleged cartelisation by telcos in the auctions held in November 2012 and March 2013. This has wasted spectrum worth thousands of crores which in turn affected the government finances, it has said.

In November 2012, the government managed to rake in just about Rs 9,500 crore compared with the expectation of Rs 45,000 crore. March auction was worse, with only one company MTS buying spectrum of about Rs 3,700 crore.

“As per DG (Audit), apparent cartelisation by the telecom service providers observed recently in the last two spectrum auctions, wittingly or unwittingly aided and abated by the inaction/delayed action of the licensor (government) ……have already cost the government very dearly in the recent 2G auctions as huge tranches of spectrum valued at tens of thousands of crores, available in the country for cellular mobile services, are being rendered waste while the government is starved of its due resources when it needs most,” a report in the Hindustan Times quoted from a DoT note.

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It is the same companies which have been demanding additional spectrum to improve the service quality that have stayed away from the auctions.

The is has prompted the CAG to raise doubts about the credibility of the subscriber base figures being released by the companies and also the quality of their service audits, the ET report said.

It even suspects that the companies may be using the 3G spectrum for voice services, which helped them stay away from the auctions, the ET report said.

According to the CAG, the government could have forced the companies to take part in the auctions by enforcing stringent quality standards.

The government should have seen this coming. The companies staying away from auction en masse had seemed like a boycott. And it was sure that they had acted together to force the government to bring down the reserve price.

And moreover, this is not the first time that the charge of cartelisation has been made against the telecom majors.

State-run telecom giant BSNL recently alleged that Bharti Airtel, Vodafone and Idea Cellular acted as a cartel against its interests in 3G service.

BSNL said this in an affidavit filed in the Supreme Court case between the DoT and the telecom companies regarding their 3G roaming pacts.

The allegations of the CAG seem to be more serious than its earlier one, which caught the fancy of the opposition parties over the huge Rs 1.76 lakh crore presumptive loss figure. This is because it shows two things:

1. We, the people, have no escape from the strangle hold of the profiteering corporates.

2. Do not look up to the government as our saviour, because it does nothing but facilitate corporates’ profiteering.

So grin and bear the exploitation.