Anyone seduced by those ‘Incredible India’ advertisements that ply the TV airwaves around the world may be lulled into a false sense of security, much the same as bidders for 122 2G spectrum licenses were.

 

The color, the vibrancy, the uniqueness of India that is used to attract tourists soon gives way to squalor, poverty, dirt and grime that is the real India. Those license holders that have now been stripped naked and left with no 2G licenses or compensation are the victims of an inept bureaucracy that appears to have condoned corruption – the real dirt and grime of India’s political and social system.

 

It all started when India's deposed telecom minister, Andimuthu Raja, now wallowing in jail, ignored top-level government advice and his department's own criteria while issuing 2G licenses in 2008 at 2001 prices.

 

In a damning report into the allocation of that spectrum, India's Comptroller and Auditor General (CAG) said that more than 70% of the winning applicants were unqualified to participate. It was reported at the time that the winning applicants for 85 of the 122 licenses did not satisfy the basic eligibility conditions for the auction. These companies allegedly suppressed facts - or even outright lied - in their applications. Some were thinly veiled fronts for existing operators flouting the rules.

 

Acting like a belligerent school master, the Supreme Court of India handed out its own form of punishment to all the license holders, not just the naughty ones, and simply took back all the spectrum to be resold in a new auction where it is anticipated they will return considerably more revenue than before.

 

In fact, the Telecom Regulatory Authority of India (TRAI) recently adopted a rather controversial pricing methodology for spectrum. It valued 2G spectrum (whether at 900-MHz or 1800-MHz) at a price point potentially six times higher than operators paid in the controversial 2008 allocation.