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I am happy to see that a lot of people are raising their voice against the telecom scam. BJP has demanded a CBI inquiry. A PIL has also been filed by Arvind Gupta in the Delhi High Court which has asked the government to respond to the PIL in three weeks. AITUC general secretary has written to Prime Minister Manmohan Singh for the removal of the telecom misnister Raja, DoT secretary and TRAI chairman. According to him, the licences should be cancelled as they have been issued on trial basis (I was not aware of this) and reauction the 2G spectrum. He further adds that the government can change the policy under special circumstances (corrupt practices) and even the courts have ruled positively in this respect. In the case of Unitech, the government can also reject the proposed sale because of security reasons.

I have been surprised to note that till now none of the industry associations like FICCI, CII, ASSOCHAM and others have not commented on the telecom scandal. Even COAI, the telecom industry association has kept quite.

It has been bothering me for quite a while that quite a few recipients of the telecom licences are real estate walas. I am not sure how many but at least the two who have sold the stakes in their telecom companies are real estate companies - Swan and Unitech. If anyone knows how many licences are real estate companies, kindly let me know. Oncce we have the numbers, then the scam will become more clear.

Unitech has finally broken its silence and has stated the following on its jackpot win:

Yesterday, I read in the papers that all the M’s, That is, the PM, FM and TM put their minds together to resolve the loss of Rs. 40-50,000 crores loss to the exchequer and came up with another idea to hoodwink the public. They are proposing to have a 3 year lock-in period for the sale of a promoter’s stake. Will this help or resolve any problem. The answer is NO. The reason is simple. The value of Unitech will remain whatever it is whether the funds are brought in as equity or as stake sale. The fact remains that Unitech with an investment of Rs. 1632 crores will become owner of company worth Rs. 11,000 crores in 10 months for the spectrum it holds which was sold to it by the government for peanuts. Some may argue that at least the promoters so not make any immediate cash gain. This is not true. Promoters can always raise the money against their stake in the company to use in the telecom venture or any other venture.

I read in Mint today that the telecom ministry came out with a press release to respond to the flak it is facing for selling spectrum so cheap. I believe there is an attempt to cover up a planned effort to favour a group of companies. Since none of the ministers like the finance ministers are saying anything, it means that they all knew what was going on. How it is possible that a number opf people applied just before the government decided to allot spectrum on first come first serve basis and that too at 2001 prices. I also cannot believe that this scam has happened without the UPA government knowing about it. If Minister Raja has done this without the other people in the cabinet knowing about then it is a fit case for Minister Raja to be sacked. This clearly suggests that he is incapable of handling the complex issue of the spectrum and where government assets which huge value is involved.

Finally, Economic Times (ET) gets it right as well as wrong. What did it get right?

I normally read the business papers in the morning and the general newspapers in the evening. Yesterday, in the morning I read about Unitech selling 60% stake in its telecom venture for $1 billion to Telenor ASA and I started writing this post in the evening. Yesterday, none of the business newspapers had commented on the this story from the perspective of the tremendous loss to the government and the profit that Unitech made from this sale. So I started writing my post to comment on this yesterday evening but didn’t complete it. However, when I went home I found an interesting articles in Times of India by Shalini Singh on the similar lines that I was writing this post. I must praise Shalini for hitting the nail on the head. But what I still find surprising that none of the business papers have discussed the issue and none of the newspapers have made a hue and cry about the profit that Unitech has made at the expense of the government. Let me explain what I am talking about.

I recently read an article in ET in which its CEO & Joint MD Manoj Kohli was profiled. It seems that Manoj Kohli’s dream is to make Bharti Airtel the Toyota of the telecom industry.

I thought that maybe it was Airtel alone which bills its customers without their orders but Vodafone does it too. This is evident from the email that I received from a harassed customer, Jigar Goks. The contents of the email given below are self explanatory.

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