Telecom scams, the ongoing saga

Delaying collection of dues from the Rai and Bharti groups is just as bad as the WiLL episode

YOU could be excused if you felt India’s fledgling telecom revolution is turning out to be just another version of Dial-a-Scandal. For, no sooner than one scandal gets over, there’s another ready to take its place — the story began in 1996 with allegations of Sukh Ram favouring Himachal Futuristic, and hotted up when over Rs 3 crore of cash was found at the then telecom minister’s residences. The year 1998 saw the government allowing all kinds of deadline-extensions to telecom firms that were defaulting on their license fee obligations, including one the next year to Srinivas Cellcom on the very eve of the trust vote in Parliament. The year 1999, of course, also saw the wholesale bailout package to the telecom industry which, it must be pointed out, insists it was a ‘negotiated settlement’ and not a bailout.

The year 2000 was relatively less explosive (in the sense of high-decibel public exposes), though this newspaper did expose various cases of the telecom ministry allowing equipment suppliers to cartelise to jack up prices, to earn a few thousand crore rupees extra. The same telecom ministry also tried to protect groups — like the Rais of Group Usha and the Mittals of Bharti — which had defaulted in paying license fees running into several hundreds of crore. And all manner of attempts were made by politicians running the ministry, to slowdown the state-owned MTNL’s attempts to start its cellular business which would have hit the existing private-sector players — this included an attempt to begin a CBI inquiry into MTNL’s outgoing chief, and when this was turned down by the CVC’s office, the ministry issued a specious ‘displeasure’ letter to the outgoing S. Rajagopalan on the evening of his retirement!

The highlight of this year, needless to say, is the Rs 5,000 crore ‘WiLL-based mobile telephony scam’ that rocked Parliament last month, and whose tremors continue to be felt from time to time. And just a few weeks ago, thanks to a fresh opinion by Attorney General Soli Sorabjee, the Bharti Group’s dues case is threatening to explode all over again — Group Usha’s grand old man Kulwant Rai also met Prime Minister Vajpayee earlier this month to lobby for some more time for his firm Koshika’s license, thereby ensuring that the current year remains a tumultuous and scandal-ridden one as far as telecom’s concerned.
What’s most interesting about Sorabjee’s latest opinion on the Rs 477 crore worth of dues from the Bharti Group which bought the Punjab cellular circle from the JT Mobile group, is that it clearly implies the ministry’s top bureaucracy lied to the AG on the facts of the case when the AG gave his first opinion on March 30, 2000 — this is the opinion where Sorabjee said that JT Mobile had no case, and it would have to pay its disputed dues.

The story, however, took a twist when, last year, JT Mobile approached telecom minister of state Tapan Sikdar for redressal, and Sikdar agreed they had been wronged — Sikdar’s stance, in turn, was approved of by telecom minister Ram Vilas Paswan, even as the ministry’s top bureaucracy reiterated that JT had no case at all. It is based on Sikdar’s notings that Sorabjee based his new opinion — that JT Mobile doesn’t have to pay these dues.

So what’s the truth? Does JT Mobile’s new owner have to pay these dues? Now that Sorabjee’s given his new opinion, the final decision will be taken by the telecom ministry and, given that the politicians are supreme, it stands to reason that JT Mobile will be let off the hook.

To leave such a controversial decision in just the hands of ministers — both Sikdar and Paswan — whose views are well-known, however, would be unfortunate. It would contribute to the view that the government is biased. Prime Minister would be well-advised to refer the matter to a more neutral body, a body that would also give due consideration to what the bureaucrats in the ministry have been saying for the past 5 years. This body could either be a separate Group on Telecom, or the telecom dispute tribunal.

Whatever the outcome, probe the JT Mobile case a bit more, and you get some disturbing insights. That, all along, it’s possible that a cash-strapped JT was just buying time. Under the original license, for instance, it had to begin its services by December 1996, but was nowhere close to doing so — and this is when the controversy with the DoT really began. And even after a lengthy dispute over payment of its dues, after the Delhi High Court asked it to pay a fifth of its license fee dues in early 1999, the company didn’t pay up, and its license was cancelled.

Similarly, in the case of the Rais, while the group owes the DoT over Rs 400 crore (for 3 circles where their licenses were cancelled last year) and another Rs 165 crore for the UP (East) circle whose license is still not cancelled, the attempt is to buy time — time in which to find a possible buyer. So why is the government giving them more time? To avoid a possible fractious dispute, or is it for some other reason? You decide.

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