The 2G spectrum scandal involved officials in the government of India illegally undercharging mobile telephony companies for frequency allocation licenses, which they would use to create 2G subscriptions for cell phones.
The shortfall between the money collected and the money which the law mandated to be collected is estimated to be 176,645 crore (US$39 billion) as valued by Comptroller and Auditor General of India based on 3G and BWA spectrum auction prices which held in 2010.[1] The issuing of licenses occurred in 2008, but the scam came to public notice when the Indian Income Tax Department was investigating political lobbyist Nira Radia.
The government's investigation and the government's reactions to the findings in the investigation were the subject of debate, as were the nature of the Indian media's reactions.
Much of the credit of bringing this whole scam into the public light (by pursuing it in the court of law) goes to Subramanian Swamy who is the chief petitioner for this case in the court of law.
Background
India is divided into 22 telecoms zones and there are a total 281 zonal licenses in the market.In 2008, 122 new 2G spectrum licenses were given to telecom companies at the price of 2001 and on first come first serve basis. The Central Bureau of Investigation (CBI) says that several rules were violated and bribes were paid to favor certain firms while awarding 2G spectrum licenses.
The audit report of Comptroller and Auditor General of India says that several licenses were issued to firms with no prior experience in the telecom sector or were ineligible or had suppressed relevant facts..
In 2007, Telecom Regulatory Authority of India (Trai) had given its recommendations on pricing of 2G spectrum to A.Raja but he did not place the recommendations before the full Telecom Commission which, among others, would have included the Finance Secretary.
In November 2007 Prime Minister of India Dr Manmohan Singh had written a letter to telecom minister A. Raja directing him to ensure allotment of 2G spectrum in a fair and transparent manner and to ensure licence fee was properly revised.
Raja wrote back to the Prime Minister rejecting many of his recommendations.
In the same month "Finance Ministry" wrote letter to "Department of Telecom" raising concerns over the procedure adopted by it but "Department of Telecom" went ahead with its plan of giving 2G licenses. It preponderated the cut-off date to September 25, from October 1, 2007.
Later on the same day, DOT posted an announcement on its website saying those who apply between 3.30 and 4.30 pm would be issued licences in accordance with the said policy. Companies like Uni tech & Swan Telecom got licenses without any prior telecom experience. Swan Telecom got the license even though it did not meet eligibility criteria.
Swan got license for Rs. 1537 crore and then it sold 45% stake to UAE based company Etisalat for Rs. 4200 crore..
Uni tech Wireless, a subsidiary of the Uni tech Group, got license for Rs. 1661 crore and later sold 60% stake for Rs. 6200 crore to Norway based company Tenor.
Following is the list of companies who got the 122 2G licenses during the tenure of A. Raja as Telecom Minister. (The licenses were later quashed by Supreme Court).
