The alleged Rs 1.76 lakh crore 2G spectrum scam that has rocked the nation and threatens to pitch fork into a political battle has already tainted the image of the telecom sector. The sector that has grown by leaps and bounds over last few years to emerge as the fastest growing sector in the country today stands to lose some of the shine of its spectacular performance due to the scam.

The casualties so far include, besides a loss of face for the government, resignation of its then union minister, A Raja, stalling of a whole Parliament session and CBI grilling the minister, a corporate lobbyist and number of senior bureaucrats for their alleged role in the scam. With opposition parties not relenting in their demand for a Joint Parliamentary Committee (JPC) to probe the scam, the fallouts may, at least in the short run, impact further technological advancements and improvements such as 3G.

This is rather unfortunate for the sector which has seen an Indian private telecom operator, Bharti Airtel, emerge as the fifth largest company in the world after acquiring Zain Telecom’s African operations.

The telecom sector which has been the shining star of the Indian economy for last many years may go down in the history with the revelation of an alleged Rs 1.76 lakh crore 2G spectrum scam that has shaken the nation. The Comptroller and Auditor General of India (CAG) in its report of 2G spectrum allotment has alleged that irregularities and doling out precious spectrum in 2008 at 2002 prices has caused the exchequer an estimated loss of Rs 1.76 lakh crore. If proven right, this scam may turn out to be the biggest ever in the country.
 The developments have overshadowed the remarkable performance in the sector that has grown leaps and bounds by adding up to 20 million new subscribers every month and response shown by operators in the 3G spectrum auction. The magnum opus scam has jolted the entire nation and the undercurrents of the alleged scam have already resulted in wasting of an entire Parliament session. The very survival of the UPA II is threatened as opposition parties are unrelenting in their demand for a JPC probe.
The scam has opened up a can of worms with both the ruling party and main opposition party trading serious charges. While the government has asked the Parliament Accounts Committee (PAC) under the chairmanship of Dr Murli Manohar Joshi to probe the issue and even the prime minister has expressed willingness to appear before the PAC, the opposition is not convinced of a fair investigation.
After initial hesitation, the government asked the then telecom minister A Raja to resign. This was followed by CBI raids on the premises of Raja as well as his close aides including his former personal secretary, former telecom commission chairman and former TRAI chairman and some senior officials of the department of telecom.
As the government was struggling to handle the situation, leak of tapes of corporate lobbyist Niira Radia and her conversations with politicians, bureaucrats, corporate houses and media personalities added fuel to the fire.
The existing nexus between corporate lobbyist and politicians particularly Radia and Raja may complicate things further for the former telecom minister and the government which also drew flak for tapping phones. The controversy even reached PMO with the former telecom minister claiming that the prime minister was aware of all the decisions made.
Despite the 2G spectrum allotment being in controversy ever since the licences were issued in January 2008, the sector has continued its forward march in terms of adding new subscribers every month and introduction of new services like next generation mobile services and mobile number portability.
During 2010, while 2G shook the nation for wrong doings, the 3G took everyone by surprise as the auction of spectrum surpassed all speculation and estimates and the government earned a whopping Rs 1.05 lakh crore from sale of 3G and broadband wireless access frequencies.
On the 3G front, some operators have already launched the services while others are in the process. The subscribers will, however, not be able to use video calling facility, one of the main attractions of 3G, till the operators put in place the technology for real time monitoring from the security point of view.
Nevertheless, 3G is likely to take telephony to a new level as the operators are promising high speed mobile broadband along with many more additional value added services on the mobile devices. The future of communication is in fast evolving technology and Indian telecom operators are in sync with the latest technology to tap the huge Indian market.
Tariffs for the existing services touched new lows with some operators offering half-a-paisa per second call to add more and more subscribers to their base. Even the 3G is not likely to witness high call charges despite higher value auction of spectrum as the operators would not risk losing their existing subscribers base.
Another user-centric service MNP launched recently, though after missing several deadlines, is bound to force the service providers to offer best quality services to retain their subscribers. MNP allows subscribers to change their service provider while retaining the mobile number. The service which is available presently in Haryana only is likely to become available on commercial basis across the country from middle of next month.
Besides 2G spectrum controversy, one more issue that attracted headlines was that of Blackberry being asked to provide interception of data received and sent from the device for security reasons. Canada based Research in Motion, the makers of Blackberry has been maintaining that the company itself is unable to access the enterprise mails but Indian security agencies are still insisting on interception facility. The matter is not yet closed and the company has been given time to comply till next month.
Amidst all the din over scams and controversies, one positive and the most important development in the sector during 2010 involving private sector was Bharti Airtel buying Zain Telecom's operations in 17 African nations and emerging as the fifth largest operator in the world.
Sunil Mittal promoted Bharti Airtel clinched the deal for an enterprise value of USD 9.1 billion (about Rs 50,000 crore) making it a single largest deal by any Indian in the telecom sector. This deal is expected to inspire other Indian telecom operators to scout the world market for potential commercial deals.
The alleged scam has led to change of guards at the Sanchar Bhawan with the trusted Congress leader Kapil Sibal, another lawyer being given the additional charge. And within days, administrative changes were initiated including sending show cause notices to all the new operators for allegedly submitting wrong information to bag licences.
The scam is no longer restricted to only 2008 spectrum allotment and links between A Raja and Niira Radia. It has become free for all as both the government and the opposition party, BJP are trading counter charges over the issue going back to NDA regime and its policies.
In such a melee, democratic propriety should be restored with the government allowing a free, neutral and judicious probe at the earliest to set things right, lest this controversy adversely affects the sector.
The alleged financial scam resulting from 2G spectrum allotment has undoubtedly tarnished the good work done by the sector so far. It has appeared as a blot on its shining performance year after year. However, the highs and lows during the year notwithstanding, the Indian telecom sector is likely to sail through and remain buoyant as new technologies and new services make it more optimistic.

PTI Economic Service