JOGIJI WRITES TO JPC

SNEA(I)/CHQ/JPC/1/4-11 Dated 20th April,11. To Sh. P.C. Chacko, Chairman, Joint Parliamentary Committee, New Delhi. Sub: Submissions of this Association fully substantiated by enclosed authentic documents relating to blatant violations of Telecom policy by successive governments since 1999 to help private operators expand their operations at the expense of paralyzing the growth of strategic national telecom institution, BSNL. Complicity of Board of BSNL corroborated by documents in taking business decisions by mortgaging the interests of BSNL to favour realty Companies like Swan, Unitech to help them enhance value of their illegitimately allocated 2G spectrum needs deeper probe. Respected Sir, Since 1999 government has with impunity violated telecom policy to help private Companies capture fertile telecom market in the Country, unmindful of how in the process exchequer lost billions in revenue and the growth of state owned telecom Company, BSNL, where government holds 100% equity, was deliberately allowed to get paralyzed. Chronologically, we are hereunder listing blatant policy violations of the government and the role of BSNL top management to virtually finish BSNL which has met the social obligations of the government in ensuring deepest possible telecom penetration in remotest parts of the Country in a commendable and unparalleled manner. In stark contrast, contribution of the private sector to meet social obligations of the government despite getting huge concessions in contravention of policy has been to say the least nil. A) The first major policy violation came in the form of so called NTP 1999 when the government in 1999 allowed private operators to migrate from fixed license fees to revenue sharing to help them obviate payment of thousands and thousands of crores that they have had to pay to the exchequer in accordance to contractual obligations of 1996 NTP. It is interesting to note that NTP 1999 was brought into force when parliament stood dissolved and Delhi High court asked Mr Soli Sorabjee, then solicitor general, in a PIL filed by Delhi science forum challenging NTP 99, a very straight question as to what were the compulsions of the government to introduce new policy when parliament stood dissolved. An eminent and outstanding pleader like Mr Soli Sorabjee was quite unconvincing to impress upon the Court as to why the government was in such a tearing hurry to introduce new policy and not wait for new parliament to get constituted to debate the new policy. It is complete farce to argue that NTP 1999 facilitated competition in telecom. NTP 1999 was a mechanism devised by the then government to bail out private operators. Even though the magnitude of loss to the exchequer may not be as much as on account of 2G spectrum allocation, but, nonetheless, the loss inflicted on govt. by allowing migration from fixed license fees to revenue sharing if quantified would be incredibly huge. B) Second huge policy violation was Mr Arun Shourie, then MOC&IT, closing his eyes towards blatant violation of policy by Reliance in misusing licensing conditions by converting limited mobility permitted on CDMA platform into All India roaming and illegitimately capturing unprecedented market and customer base of BSNL which strictly adhered to policy. At annexure I is a letter of this Association dated 25th Nov, 2003 addressed to the then Prime Minister, Sh. Atal Bihari Vajpayjee Ji, duly received by his office, apprising him of very serious and colossal policy violations being deliberately overlooked by Sh Arun Shourie simply to facilitate Reliance poach into cellular segment. In complete disregard of licensing conditions for Basic Telecom Operations, Reliance in brazen faced and illegitimate manner roped in 50 lakh customers by way of naked poaching into the cellular segment. All the while the Regulator (Mr Baijal), the DOT and the M.O.C (Mr Shourie) remained not merely mute but applauding spectators. There was a studied silence (by the government) as to whether specific action in this direction had been taken or is proposed to be taken. Finally TDSAT stepped in aggressively with a scathing observation that this is an unsatisfactory situation as it would lead to poaching in an area earmarked exclusively for cellular mobile companies. After this scathing indictment by TDSAT, Sh Arun Shourie, emerging from a meeting of GOM on 25th Sept,03, said “we discussed the report on violation by Reliance with regard to the limits of WLL(M) services not being in accordance with the spirit of the license”. Again on 12th October, 03, Sh Shourie said that Government would enforce the TDSAT’s ruling with regard to WLL(M) service being limited to local calling area” However, implementing the TDSAT judgement in letter and in spirit would have meant forcing Reliance to provide a limited version of mobility and terminating their license for such blatant violation and Mr Shourie and Mr Pradip Baijal would never do that. While TDSAT found DoT officials guilty not of minor negligence or incompetence but of collusion, mala fide and wilfully holding back important papers from government’s high powered committee (GOT-IT), which had reviewed the government’s decision on limited mobility, MOC&IT went on to cite “extraneous considerations” and did not think it necessary to conduct an inquiry into the role of his officials in the face of such a ridicule from TDSAT on policy violation by Reliance. In the meanwhile, while everyone expected enforcement of TDSAT judgement, MOC&IT and his crony, Sh Pradip Baijal, Chairman TRAI, took a sudden somersault and found a unique “way out” to bail out Reliance by coming out with new concept of unified licenses to legitimize serious breach of policy by Reliance. The Govt., and its agencies ran with incredible haste and speed to legalize the activities of the law breaker. Before the issue was to come up for hearing in Supreme Court and on 27th October, 03, Baijal’s TRAI pronounced “Unified Licensing Regime”. Within three days, GOM approved it, DOT took just 10 days to work out and finalize the new regime. The very next day law breaker donned the mantle of a lawful provider by paying a petty sum. The move to pre-empt the Supreme Court was a master stroke in an endgame premeditated by the Communication ministry led by Arun Shourie and its agencies. All these facts are elaborately contained in the letter of this Association (Annexure I) addressed to then Prime Minister, Sh. Atal Bihari Vajpayee Ji. That is how in a well calibrated manner Mr Arun Shourie and his bandwagon i.e Pradip Baijal, Chairman TRAI, played havoc with the policy, in the process, giving huge business leverage to Reliance and inflicting irreparable and irreversible damage on the CDMA business of BSNL, Company Mr Shourie owned fully and which had made huge capital investments in CDMA segment. Sh. Arun Shourie appropriately rewarded two officers for facilitating sale of VSNL to Tatas, one Sh Pradip Baijal who was then disinvestment secretary and on his retirement got prize post of Chairman TRAI to play havoc with telecom policy, and the other Sh. R.S.P.Sinha, then Director(finance)/VSNL who was elevated to CMD/MTNL to only destroy MTNL. C) After Mr A.Raja’s scandalous allocation of 2G spectrum, it was BSNL board that in collusion with Mr Raja and his Company in DOT came out with a roaming arrangement mechanism (annexure VII) to allow real estate companies like Swan, Unitech to roam on BSNL’s GSM network. These Companies having no telecom infrastructure and acquired 2G spectrum at throwaway price of 2001 were obliged by BSNL management to help them earn a huge premium on their just acquired spectrum through this roaming agreement. This arrangement helped Swan to earn about 6000 crores as premium by selling part of its equity to Etisalat. The only objective of BSNL Management’s decision to have a roaming agreement was to mortgage BSNL to help real estate agents like Swan, Unitech etc earn premium on their spectrum. What is however significant and relevant is that despite stern timely warning from this Association to BSNL management vide its letter (annexure II) dated 4th Sept.,08 to refrain from this unscrupulous and fraudulent action, management went with roaming arrangement to allow Swan earn huge premium on their 2G spectrum. That is where the joint Parliamentary Board is requested to thoroughly probe this decision of BSNL board and fix them. Also the decision of the Board to allow non - existent shell companies to use its BWA spectrum for Wimax is another huge scandal involving board of directors of BSNL. A very serious, deep and thorough investigation about the role of board of directors of BSNL to allow Sh A. Raja and his cronies further consolidate the illegitimate gains of 2G spectrum allocation by taking business decisions by mortgaging BSNL is absolutely needed to get to the root of such decisions that have paralyzed the growth of BSNL and taken it to present depths. D) Annexure III is a letter addressed to then Secy/DOT, Sh P.J.Thomas, dated 15th June, 10 urging upon him to shift the concerned officers in DOT closely involved in processing allocation of 2G spectrum to facilitate a fair and impartial probe by CBI into the entire issue of spectrum allocation after CBI filed an FIR against unknown officers of DOT. However, then Secy/DOT remained unmoved and did not even think it proper of taking even an innocuous action of transferring the concerned officers from their seats to facilitate a transparent and impartial probe into the issue of 2G spectrum allocation. E) Annexures IV, V and VI are letters written to present MOC&IT, Sh. Kapil Sibal, drawing his attention and seeking his immediate intervention in allocating a standardized BWA spectrum band to BSNL for which it has paid market price of Rs 8000 crores at par with other service providers. It is very interesting to note that while private operators have been allocated a BWA frequency band that has distinct advantages in terms of operational flexibility and low capital costs, BSNL has been allocated a non standardized pan India BWA spectrum which ceases to have these distinct business advantages. The non standardized BWA spectrum band allocated to BSNL does not have the flexibility to offer services from LTE platform which is an upcoming worldwide technology with huge economy of scale. Besides, the capital investment to be made by BSNL to launch Wimax services on non standardized spectrum band it has been allocated is very high in comparison to the equipment that would be available to private operators having the flexibility to offer services either on Wimax or LTE platform. Basically the concerned business head of BSNL should have out rightly like any other business professional rejected acceptance of this redundant spectrum band after having paid market price of Rs 8000 crores. What were his compulsions in accepting this non standardized band after paying exchequer Rs 8000 crores of the Company is a matter of very serious probe? Sabotage and collusion is not at all ruled out. However, what is pertinent and interesting is that while present MOC&IT is very keen and enthusiastic to address the core business issues of private operators like pleading with finance minister to lend them soft loans to meet their business needs and other issues, he should also accord equal priority to resolve the core issues of the Company he fully owns and which is engulfed in fire. Immediate action needs to be taken to allocate standard BWA spectrum band to BSNL that has the same features which the band allocated to other private operators have. Where is question of discriminating BSNL when it has paid market price of Rs 8000 crores to the exchequer on auction. After all, a formidable state owned telecom Company gives enormous strategic leverage to the government in terms of imposing effective checks on other service providers for smooth implementation of policy from time to time to protect users from being fleeced by private service providers and not allowing their cartelization. Besides, healthy state owned Company is the only institution government can rely upon in proliferation of telecom services in highly inaccessible areas of the Country to meet the expectations of downtrodden and underprivileged strata of society. No private operator, howsoever powerful he may be, would ever be willing to play this unique role in National interests. Government cannot afford to lose sight of this fundamental fact and policy makers in the government have to be extremely careful to safeguard genuine interests of the Company it fully owns. A weak and destabilized state owned Company means all kinds of insurmountable issues for the government in matters of implementation of policy. We shall be grateful for providing us an opportunity to present our views in person. With kind regards, Sincerely Yours, ( G.L.Jogi) Copy to 1- 30. All the members of JPC. 31. Sh. Kapil Sibal, MOC&IT. 32. Sh. Gurudas Kamat, MOS for C&IT. 33. Sh. Arun Shourie, ex-MOC&IT. 34. Sh. Pradip Baijal, ex- Chairman/TRAI. 35. Sh. P.J.Thomas, ex-secy/DOT. 36. Sh. K.M.Chandershekar, Cabinet Secretary. 37. Sh. R.Chandrashekar, Secy/DOT. 38. Director/CBI. 39. Chief Vigilance Commissioner. 40-42. Members/TC. 43 Sh. S.C.Misra, CMD/BSNL. 44-46. Directors of board/BSNL.