No talk of losses, says CAG on microwave spectrum allotment

NEWDELHI: The Comptroller and Auditor General (CAG) flagged inequitable allotment of Microwave Access (MWA) spectrum to telecom service providers and also problems with the way charges were levied on these, but didn’t compute any loss to the exchequer, officials in the national auditor said, responding to a charge made by the Congress on Monday.

Congress leader Pawan Khera said, “In last four years, Modi Government surreptitiously protected the interests of leading telecom companies by helping them avoid the payment of charges rightfully owed to the exchequer, thus facilitating a staggering ₹45,000 crore plus of public money being buried under the carpet. In another scam, the government deferred the recovery of spectrum auction amount by six years, thereby causing an interest loss of ₹23,821 crore alone to the public exchequer.”

A senior official at the CAG said the national auditor didn’t peg the loss as the MW spectrum has never been auctioned and as of now we cannot find a fair market price of the same. “Therefore there was no question of computing the loss,” added this person who asked not to be identified.

However, the report of the government auditor does find inequities in the allotment.

“It was also found that allotment of MWA to Access Service providers was withheld by DOT (Department of Telecommunication) since June 2010 and allotment against only one application was made in December 2015. There were 101 applications pending till November 2016 for allotment of MWA.” The CAG said the government didn’t follow the principle of maintaining a level playing field by allotting MWA to only one telecom service provider and recommended that the allotment of MWA spectrum should be made only through auctions.

DOT countered that most applications pending belonged to telcos that had licences cancelled after a Supreme Court verdict in the so-called 2G scam.

In cases of renewal of licences, the applicants were unwilling to comply with the existing (provisional) guidelines dated 16 October 2015 in which pricing has been upwardly revised, among other issues, DOT added.

CAG was not satisfied with the replies of the DOT and said... “allotment of MWA carriers to TSPS should be made equitably and through market related process.”

Finding more deficiencies in the spectrum management by the DOT, the CAG said the 1999 telecom policy migrated telcos from a Fixed Licensee Fee Regime to a Revenue Share arrangement. The revenue sharing was to be done as a fixed percentage of their Adjusted Gross Revenue (AGR).

The national auditor found that the spectrum charges for MWA and backbone spectrum and satellite spectrum of national long distance (NLD) and international long distance (ILD) networks were still levied on formula basis instead of revenue share basis.

There are many cellular networks that provide NLD and ILD networks and Microwave spectrum is used for the cellular as well as NLD and ILD networks also.

“There was no mechanism to monitor or identify the use of Microwave spectrum by an operator for a specific network and thus charging for MW spectrum for different networks differently (AGR based for cellular and formulae based for NLD/ ILD networks) appeared to be flawed and subject to manipulation,” says the CAG.

Seeking a review of the policy the auditor said NLD and ILD are also commercial services and charging one on the basis of the percentage of AGR and other on the formulae basis “exhibit inherent contradictions in larger policy implementation of Revenue Share Regime”.

A second CAG official said that in both cases, the issues were procedural, that the auditor hadn’t put a number to losses, real or notional, and that in the case of MWA use for ILD and NLD networks, the issue is almost two-decades old.