New Delhi:
The Supreme Court has cancelled 122 licenses for mobile networks issued during A Raja's tenure as Telecom Minister and has asked the telecom regulator TRAI to make fresh recommendations on allotment of the licenses within four months. In a second crucial verdict, the court refused to order an investigation into the role of Home Minister P Chidambaram in the telecom scam, asking a CBI trial court to decide on this instead within two weeks.
Importantly, TRAI chief JS Sarma has said that the regulator will recommend that the licenses be allotted now through an auction, not on the "first-come-first-served" policy that the government followed. (Supreme Court's telecom verdicts: 10 big facts)
Hours after the Supreme Court gave its verdict the government gave its measured reaction, saying it welcomed and accepted the judgement - which Telecom Minister Kapil Sibal said endorsed his government's stand that auction of spectrum was the best route. Mr Sibal said the government would wait for the TRAI's guidance on how to allot the licences afresh.
The government's first reaction came after hours of being in a huddle. Mr Sibal met the Prime Minister and soon after, a Group of Ministers on media met this afternoon. Mr Chidambaram heads that group, but he skipped the meeting.
It also fell on Kapil Sibal to defend his seniors and say that the Prime Minister Manmohan Singh and Mr Chidambaram "were in no way responsible" and that the verdict endorsed that oft-stated government stand. Mr Sibal said the court had found fault with the "first-come-first-served policy" of allotment of licenses in 2008 and that was something the UPA got in legacy from the BJP-led NDA government that ruled before it. (BJP uses telecom verdict to target PM, Sonia Gandhi)
The BJP says today's verdict calls into question the "decision-making credibility" of the Manmohan Singh government, which it says must accept collective responsibility for the telecom swindle. It has demanded accountability from the PM; it wants answers from both the PM and UPA chairperson Sonia Gandhi on what it calls "the damaging policies of the UPA leading to the creation of a global no-confidence." Mr Chidambaram must quit, is the demand from both the BJP and the Left; the latter says even Telecom Minister Kapil Sibal should put in his papers.
The Supreme Court said while cancelling all the 2G licenses issued by Mr Raja in 2008, that they had been allotted in "an unconstitutional and arbitrary manner." It has also fined six telecom firms. Three of them, Etisalat, Uninor and TATA, have been penalised Rs five crore each. Loop and Essar have been fined Rs 50 lakhs each. Uninor has protested saying it has been "unfairly treated" and is "being penalised for faults the court has found in the government process." (How Supreme Court 2G verdict impacts stakeholders)
Today's order will impact both business and politics, though Mr Sibal hastened to assure consumers that they would not be hit. The first question being asked as the big order came: will the user pay more in telephony tariffs? Analysts say if the government decides to auction, telecoms may pay much more than they have in the past, and prices could go up for all consumers. (What the 2G verdict means for you)
The markets reacted swiftly to the court's verdict. Stocks of telecom companies whose licenses have been scrapped, like DB Realty, whose promoters are invested in Etisalat DB, Unitech and Videocon, tanked instantly. Stocks of Bharti Airtel were trading up - older players like Airtel have no exposure to these licenses. (Cancelled telecom licenses: Impact on consumers, economy)
In the verdict on a petition by Janata Party president Subramanian Swamy seeking that the CBI investigate Mr Chidambaram's role, the Supreme Court said the decision would be taken by Judge OP Saini, who is handling the trial of the telecom scam, within two weeks. Judge Saini is also expected on Saturday to rule on another petition on whether Mr Chidambaram should be made a co-accused in the scam. (Chidambaram is morally obliged to resign: Subramanian Swamy)
In a third important judgement this morning, the court refused to sanction a Special Investigation Team to over-see the CBI's inquiry on the telecom scam. It said the Central Vigilance Commission (CVC) would monitor the investigation instead - the court asked the CBI to submit its status reports to the CVC in sealed envelopes.
The BJP says today's court order is but a "two-day reprieve" for Mr Chidambaram, who it says should resign. "He has no moral right to stay in the Cabinet with such a sword hanging over his head," the BJP's Ravi Shankar Prasad said. He also said, "The PM had even given his certificate of approval to A Raja...Mr Prime Minister, will you accept some accountability today?" Mr Prasad said after the court's verdict even the UPA's "tallest leader Sonia Gandhi" must speak.
The verdicts today are based on three petitions by Janata Party President Subramanian Swamy and lawyer-activist Prashant Bhushan. Mr Swamy, like opposition parties, says that Mr Chidambaram was aware of Mr Raja's elaborate ruse, and sanctioned the decisions that led to the swindle.
In 2008, Mr Raja ignored advice to hold an auction for licenses and spectrum. Instead, he followed a first-come-first-serve policy. But he twisted the guidelines so that companies who he allegedly colluded with jumped to the head of the queue and won licenses out of turn. They paid a pittance- the rates used in 2008 were based on the prices of 2001, even though India had many more mobile phone users by then. 122 licenses were issued. Mr Bhushan's petition had asked for these to be cancelled.
In recent months, the Attorney General and the government's auditor have said the same. Some of the companies that won licenses have foreign partners. In fact, Unitech Wireless and Swan Telecom entered collaborations with Norway-based Telenor and Dubai-based Etisalat, earning huge investments.
Technically, they diluted equity and did not sell their stake - laws at the time forbade those who bought licenses from selling them straight away to others. But the transactions, though legal, unveiled the ways in which the government had been shortchanged. If foreign partners were willing to pay such vast amounts for their share, clearly the telecom licenses had been undervalued. And private firms had been allowed to earn huge profits at the government's expense.
Importantly, TRAI chief JS Sarma has said that the regulator will recommend that the licenses be allotted now through an auction, not on the "first-come-first-served" policy that the government followed. (Supreme Court's telecom verdicts: 10 big facts)
Hours after the Supreme Court gave its verdict the government gave its measured reaction, saying it welcomed and accepted the judgement - which Telecom Minister Kapil Sibal said endorsed his government's stand that auction of spectrum was the best route. Mr Sibal said the government would wait for the TRAI's guidance on how to allot the licences afresh.
The government's first reaction came after hours of being in a huddle. Mr Sibal met the Prime Minister and soon after, a Group of Ministers on media met this afternoon. Mr Chidambaram heads that group, but he skipped the meeting.
It also fell on Kapil Sibal to defend his seniors and say that the Prime Minister Manmohan Singh and Mr Chidambaram "were in no way responsible" and that the verdict endorsed that oft-stated government stand. Mr Sibal said the court had found fault with the "first-come-first-served policy" of allotment of licenses in 2008 and that was something the UPA got in legacy from the BJP-led NDA government that ruled before it. (BJP uses telecom verdict to target PM, Sonia Gandhi)
The BJP says today's verdict calls into question the "decision-making credibility" of the Manmohan Singh government, which it says must accept collective responsibility for the telecom swindle. It has demanded accountability from the PM; it wants answers from both the PM and UPA chairperson Sonia Gandhi on what it calls "the damaging policies of the UPA leading to the creation of a global no-confidence." Mr Chidambaram must quit, is the demand from both the BJP and the Left; the latter says even Telecom Minister Kapil Sibal should put in his papers.
The Supreme Court said while cancelling all the 2G licenses issued by Mr Raja in 2008, that they had been allotted in "an unconstitutional and arbitrary manner." It has also fined six telecom firms. Three of them, Etisalat, Uninor and TATA, have been penalised Rs five crore each. Loop and Essar have been fined Rs 50 lakhs each. Uninor has protested saying it has been "unfairly treated" and is "being penalised for faults the court has found in the government process." (How Supreme Court 2G verdict impacts stakeholders)
Today's order will impact both business and politics, though Mr Sibal hastened to assure consumers that they would not be hit. The first question being asked as the big order came: will the user pay more in telephony tariffs? Analysts say if the government decides to auction, telecoms may pay much more than they have in the past, and prices could go up for all consumers. (What the 2G verdict means for you)
The markets reacted swiftly to the court's verdict. Stocks of telecom companies whose licenses have been scrapped, like DB Realty, whose promoters are invested in Etisalat DB, Unitech and Videocon, tanked instantly. Stocks of Bharti Airtel were trading up - older players like Airtel have no exposure to these licenses. (Cancelled telecom licenses: Impact on consumers, economy)
In the verdict on a petition by Janata Party president Subramanian Swamy seeking that the CBI investigate Mr Chidambaram's role, the Supreme Court said the decision would be taken by Judge OP Saini, who is handling the trial of the telecom scam, within two weeks. Judge Saini is also expected on Saturday to rule on another petition on whether Mr Chidambaram should be made a co-accused in the scam. (Chidambaram is morally obliged to resign: Subramanian Swamy)
In a third important judgement this morning, the court refused to sanction a Special Investigation Team to over-see the CBI's inquiry on the telecom scam. It said the Central Vigilance Commission (CVC) would monitor the investigation instead - the court asked the CBI to submit its status reports to the CVC in sealed envelopes.
The BJP says today's court order is but a "two-day reprieve" for Mr Chidambaram, who it says should resign. "He has no moral right to stay in the Cabinet with such a sword hanging over his head," the BJP's Ravi Shankar Prasad said. He also said, "The PM had even given his certificate of approval to A Raja...Mr Prime Minister, will you accept some accountability today?" Mr Prasad said after the court's verdict even the UPA's "tallest leader Sonia Gandhi" must speak.
The verdicts today are based on three petitions by Janata Party President Subramanian Swamy and lawyer-activist Prashant Bhushan. Mr Swamy, like opposition parties, says that Mr Chidambaram was aware of Mr Raja's elaborate ruse, and sanctioned the decisions that led to the swindle.
In 2008, Mr Raja ignored advice to hold an auction for licenses and spectrum. Instead, he followed a first-come-first-serve policy. But he twisted the guidelines so that companies who he allegedly colluded with jumped to the head of the queue and won licenses out of turn. They paid a pittance- the rates used in 2008 were based on the prices of 2001, even though India had many more mobile phone users by then. 122 licenses were issued. Mr Bhushan's petition had asked for these to be cancelled.
In recent months, the Attorney General and the government's auditor have said the same. Some of the companies that won licenses have foreign partners. In fact, Unitech Wireless and Swan Telecom entered collaborations with Norway-based Telenor and Dubai-based Etisalat, earning huge investments.
Technically, they diluted equity and did not sell their stake - laws at the time forbade those who bought licenses from selling them straight away to others. But the transactions, though legal, unveiled the ways in which the government had been shortchanged. If foreign partners were willing to pay such vast amounts for their share, clearly the telecom licenses had been undervalued. And private firms had been allowed to earn huge profits at the government's expense.
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