Tag Archives: Department of Telecom

2G Telecom Scam India: Excerpts from PAC Report

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2G Spectrum scam is huge; to the tune of thousands of crores cheated from public money. The specifics are still sub-judice; however, I am linking to the the “leaked report” which has been extensively reported in recent times by the lay press.

The entire article can be viewed here; although I don’t wish to skip over the juiciest parts (and something that I have always mentioned in this blog that is patently wrong with the auctions and the way it has been handled).

On First Come First Served Basis:

The Committee note that the First-Come-First-Served (FCFS) basis for the issue of Licences and Allocation of Spectrum has been followed by the Department on the argument that the announced UASL guidelines have made it open for new licences to be issued on continuous basis. The Committee’s scrutiny of the records reveal that in the Basic Service Licences guidelines, there is a reference to FCFS but nowhere in the UASL guidelines, the term FCFS has found a mention implying thereby it has no sanctity. In fact, on 24th November, 2003, the then Minister of Communications and IT had approved the Department’s proposal to give licence Spectrum on FCFS basis, but it was not codified in the UASL guidelines. Thus, there has been no such legally established principle as ‘FCFS’, at best it can be termed as a prescription to be followed for grant of licence/Spectrum…….

On Role of Media:

The Committee note that the brazen irregularities in the allotment of 2G spectrum and UAS licences were unravelled by some investigative journalists much before the Radia tapes came into the public domain. A journalist who played a stellar role in exposing the irregularities, on being asked about the sources of his information, replied that the information was collected through the RTIs and from some public-spirited insiders…..

Presumptive Loss:

….Intriguingly, neither the DoT nor the TRAI has quantified the precise loss. Unfortunately, the DoT instead of admitting an unconscionable act, advanced the plea that theoretical exercises based on economic modeling are fraught with simplistic assumptions and that no methodology can be suggested by them to calculate the loss…..The Committee feel that giving dual technology licence to the CDMA operators and new UAS licences in 2007-08 at a price determined in 2001 was not only imprudent but also smacks of a design.

Shortcomings in the Implementation aspect:

….While the first phase was implemented, the second phase was conveniently and intentionally, as subsequent events substantiate, overlooked. In the process, devising an efficient allocation formula for Spectrum alongwith an appropriate price remained unachieved as delinking the price of Spectrum from the issue of licences was given a go bye, disregarding the Cabinet decision. The Committee are deeply distressed that due to violation of the Cabinet decision and as a consequence of such deliberate omission, the issue of UAS license and allocation of Spectrum in 2007-08 at the price discovered in 2001 caused a staggering, but wholly avoidable, revenue loss…..

The Committee also desire that the price of Spectrum be delinked from the issue of licences without further delay and seek explanations as to why this important decision has not been implemented as yet…..

Role and Responsibility of TRAI:

The Committee note that the recommendations of the Telecom Regulatory Authority of India (TRAI) are not binding upon the Central Government. But it is mandatory for the Government to seek recommendation of the TRAI in respect of matters pertaining to the need and timing for introduction of new service providers and terms and conditions of licence to a service provider. But the Committee are surprised to note that while seeking TRAI’s recommendation on 13 April, 2007 on various issues, the DoT did not seek recommendations on grant of new licences despite the mandatory requirement. Even though the decisions of the Government is final whether to accept or reject the TRAI’s recommendation, not seeking such recommendations at all speaks volumes for the DoTs malafide designs to circumvent the established provisions in the TRAI Act..

So now we know that TRAI basically is a useless toothless regulator.

But TRAI is not above all. So read the following:

Besides, the Committee find TRAI’s flip-flop in its recommendations also contributed towards the Department’s arbitrary and unilateral decisions. For example, in 2003 TRAI recommended that as the existing players have to improve the efficiency of utilization of Spectrum and if Government ensures availability of additional Spectrum, then within the existing licensing regime, they may introduce additional players through a multistage bidding process as was followed in the case of introduction of the fourth cellular operator.

The bad news:

One aspect that engages the attention of the Committee is the fact that worldwide, especially in the developed countries, the licensing and Spectrum related functions are actually performed by the Regulators and not by the Government unlike in India. The Committee consider such a practice as one of the main reasons for the DoT’s arbitrary decisions in dealing with the consultation process with the Authority.

The big players have engaged the Department of Telecom and the TRAI executives get exemplary post retirement benefits as fancy board members. Of course, they are there to liaise with the existing bureaucrats setting up huge questions on conflict of interests. I really don’t know whether these clauses are in built in their “rules” but if you look at the RTI applications to make their assets public, these faceless bastards need to be more accountable. Not all of them are like that but the blackest of the black sheep are bringing a huge shame to rest of the community.

Pathetic. Ours is totally a banana republic.

On 3G Spectrum (Which I personally feel has been “over-inflated”):

The Committee are happy to note that the auction of 3G Spectrum through an open and transparent bidding process has established the true value of the finite scare resource. However, as apprehension has been raised at many quarters that by paying such hefty amount to get 3G Spectrum, the successful bidders might pass on the burden to the consumers, the Committee impress upon the TRAI to keep a watch on the development in this regard and protect the interest of the consumer in tandem with the DoT.

Hope you are feeling bad enough by reading this sorry state of affairs.

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2010 round up.

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This perhaps generates more cynicism than anything else. Over the past few months, I have become increasingly bitter with the telecom landscape in India. We have “expounded myths” about “millions” materializing from thin air to headlines dominated by three major trends

1) Smart phones and Android taking center stage with Nokia dying a slow death.

2) 2G spectrum scam

3) 3G mess.

There are tonnes of web sites scattered all around to tell you about Android’s home coming. I am not getting in the debate about what is good or bad but Apple (across the lines) remains aspirational because of it’s perceived value.

2G Spectrum scam has also been mentioned extensively with the political fall out affecting Congress and it’s cohorts; again the debate has been frittered away to be of any consequence.

3G Mess is bad. Really bad. Partly because it has been sold on lines of “only Internet access” you’d ever need. As mentioned in these columns (and comments) that none of the devices support advertised speeds of 21Mbps; more so, in absence of clear definition of what 3G speeds are, you would not really see much traction there. The operators have dreamt of fat profits accruing from the sales and perhaps are marketing different plans for mobile handsets and wireless modems. Docomo even explicitly prohibits “tethering” mobiles to laptops citing it as “violation of terms of use”; as it they can “prove it court of law”. Assholes.

4G is on the horizon and as such the media reports were peppered with what technology to choose. There are of course competing issues; I am not qualified enough to explain the merits/demerits of each.

Another highlight of this year was the final recognition of menace of telemarketing calls and sms (with sms rates being usurious and companies raking in huge profits from what is essentially free for them). I have written about it earlier but there are others in space who have written about it more extensively (Rajesh Jain on Telemarketing and SMS Spam[1,2,3,4,5])

Mobile Number Portability (MNP) would be a big issue in 2011. Although it has been launched in Haryana, there are not enough media reports about the impact of MNP on the same. Is it surprising? With telecom companies leading in advertisement spends, they hold enough leverage to influence reporting the issue. Hence I would remain blocked out on the same unless it becomes a major issue. However, they don’t give a shit to the users because there is no REAL choice between the service providers. Most of the new operators have yet not launched their operations (and hence got notices for the same) so it is difficult to comment on the same. I foresee a lot of activity in next year in terms of new players and mobile number portability to affect them. Yet, with the rise of cheap “chinese manufactured- Indian branded” hardware with dual and three SIM card slots, issues like MNP don’t hold much promise. Hence this too would remain a lot of hot air with some speculation towards “power to consumer”.

I have written extensively to TRAI, Department of Telecom and various stake holders in media about why need broadband and what is basic policy flaw in the system. This has also been a subject of my RTI applications being filed with them. At risk of sounding repetitive, we all need a proper system for growth of the nation and that is a foregone conclusion. However, the system is designed not to provide but to deprive the users from opportunities. If public good were at the heart of policy makers (and politicians), we would not have been a kangaroo republic (mistaken for a democracy).

I fail to understand the stupidity of media houses not to push for all inclusive growth in Broadband; since their own very future depends on it. I have briefly toyed with the idea of setting up a NGO; there is no scarcity of ideas that need to be implemented. What is lacking in this space is will to implement those ideas. The whole scenario is lumbering around like a giant iceberg. Yet as monotony in this space grows, Internet access is fuelled by explosive growth in social networking to Facebook’s data servers. Here in lies the rub. Media in India is even lacking in this space and focusing instead to try out experiments in their own walled microdomains expecting the advertisers to come on in hordes and expecting to rake in millions of dollars from advertising click throughs.

However, this dream lies shattered with corpses of media houses dotting the landscape instead. Content is supreme and while we retain the numero uno position for generating mountains of crap in terms of bollywood export, this has not found a “release” except from traditional channels of multiplexes and to some extent, DTH. Instead, we don’t have a Hulu or Netflix like player capitalizing on this aspect of delivery. 3g cannot do it. 4g cannot do it. Wifi perhaps. Broadband on wirelines- definitely.

This blog has also seen some write ups on the need to tone up internet exchanges, need for TRAI to jig up it’s broadband policy and a call for Public Internet cafes. Interestingly, we also saw NDTV’s programme on broadband which we linked on to and perhaps the first in a long long time coming in from mainstream media. TRAI did talk about “fair usage policy” although in context of telecom tariffs. Another highlight was my post on online education and something on cloud computing in respone to Chrome OS.

This, by and large, what I had written with some guest posts. I have already filed in RTI application with BSNL as listed and I am awaiting their response. My only aim to get to root on pricing on Broadband, the mess and perhaps get a better deal on it in the long run. The first step is perhaps to re-define broadband from it’s present definition. I am also planning to involve TRAI in this loop along with perhaps Department of Telecom and see how they differ. Although TRAI is the regulator, the real power lies with DoT. Yet, it is a blame game that they are likely to play. DoT would say that TRAI has to come up with regulations first. TRAI would say that DoT is the real boss and they have to come up with a “circular”. No one wants to work and consumer gets the fuck of his life.

I have seen the Indians from close quarters. They would suffer all the insults with great temerity and humbleness. Perhaps it is the servile attitude that is ingrained in their psyche. Neither we are going to see a good amount of activism to make the public institutions deliver nor are the companies going to make any efforts to tone up their services. It costs real money to keep up with after sales service which actually eats up the profits and hence customer service is perhaps the last of ideas on their minds.

This post by itself is a huge huge post in a long long time! Maybe perhaps, I have written about trends subconsciously which I feel would impact the telecom landscape in some way or the other. The market is not geared towards course correction but is littered with asymmetric information to disadvantage of consumers. Sadly proactive approaches, either at regulator level or mass media or even at consumer level is sorely lacking.

The new year is not going to change this scenario in any manner whatsoever.

BSNL Broadband: RTI application submitted

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I decided to stick around after lunch time today to file in the application. It is a simple process. One has to purchase a postal order (from any post office in the country), attach it to the application after filling in the details on postal order (for 10 bucks) and you are good to go.

Submit it to the PIO and wait for the answer from them. I wonder what has been the reaction from their office after getting a detailed questionnaire. Lets wait for the answers (next year).

I am keeping my fingers crossed. My contention is that you make the top incumbent come clean on the prices which would help you to negotiate the prices with say Airtel. At least I would have a broad idea as to how the revenues are split, what are the issues that need to be sorted out and confront TRAI with the same to issue policy decisions (perhaps Department of Telecom too).

I think, all it needs is a simple will to do something instead of getting mired in the red tapism. I have already written to the DoT Secretary (R Chandrashekhar) but he has not replied so far. I am not even sure whether the email has landed in his inbox.

Some time later next year, if everything goes well, I might plan to meet him in person.

The idea is to get broadband liberated; so that at least I get the best value for my money. I’d rather have a functional DSL first for starters; fiber can wait for some time.

I was also surprised to see BSNL’s equivalent IPTV packages in their customer care. I am not sure how this would work out or what is the customer review. Although it is a good option for time shift TV but with bundled speeds of 256kbps, I am not eager to join them. With customer resolution at local BSNL exchange, I am not keen to run around to get my service fixed in case of any “issues”.

Lets keep our fingers crossed.