Take back 2G from new telcos: NGO

NEW DELHI: Telecom Watchdog, the NGO that had shot into prominence for objecting to the Vodafone-Hutchison deal, has now demanded that the government take back the second generation radio frequencies it has allotted to all the new telecom players.

The NGO, in its communication to both the department of telecom (DoT) and communications minister A Raja has pointed out that the new entrants were making a killing through resale of 2G spectrum to foreign companies.

���Every new operator is being valued at about $2 billion (Rs 10,000 crore) by foreign operating companies at zero built-up assets. They only have 2G spectrum. This is about six fold increase in less than ten months against their investments of about Rs 1,700 crore for a pan-India licence including interest,��� the NGO said.

Market watchers say that Mr Raja���s decision to allot telecom licences at prices fixed in 2001 (Rs 1,651 crore for a pan-India licence) has resulted in losses of over Rs 50,000 crore to the government. For instance, Swan, which paid Rs 1,537 crore for licences in 13 circles sold a 45% stake in the company to UEA���s Etisalat for Rs 4,410 crore.

Similarly, Unitech, which got licences in 22 circles sold a 60% stake in its telecom arm to Norway���s Telenor for Rs 6,120 crore.

���Shyam has also sold its equity to Sistema, which now controls about 74% of Shyam. The other licensees are also looking to sell off equity. This way, private companies are cornering the advantage of under-priced 2G spectrum. Swan has already cornered Rs 2,800 crore after adjusting the cost it had paid to get spectrum; this is in addition to 55% equity it already holds. The same is the case with the other companies,��� Telecom Watchdog���s secretary Anil Kumar added in his communication to the government.