The saga of the Indian 2G license scam is an absolutely fascinating tale. Dodgy public figures, corruption in Government and a possible loss to the Indian Government of $40 billion has lead to a massive shake-up in the country – and both the Government and the mobile operators are getting it in the neck.
What’s the story?
You can see our full report on this 2G license scam here, but the the short version is as follows:
Typically, countries auction off their mobile spectrum to the operators who make the best tenders. The result of these auctions is the set of mobile networks who will be operating in the country. But in India, massive corruption at a Ministerial level lead to licenses being sold to preferred clients at massively undervalued prices. After the scandal was revealed, it became referred to as the largest financial scandal in modern Indian history – and has lead to the arrest of the Cabinet Minister of Telecommunications and Information Technology at the time, Andimuthu Raja.
Today, the Department of Telecommunications has begun the lengthy process of scrapping some of the licenses issued during the reign of Raja. It is reported that Etisalat DB has had its 2G license revoked, and that other operators will follow. The notices for cancellation seem to be issued on the basis that the companies in question did not live up to the normal requirements for getting a license.
What we think?
In Ireland, the very largest crooks are usually let off with a raised eyebrow and a good finger-wagging – or else they go into Government (or back into Government in some cases). So it’s refreshing for me to see India moving so decisively on this. People have been arrested. Licenses are being revoked. Presumably, a new license auction will be announced at some stage. Good stuff.