What is the public perception about the impact of the 2G scam? No prizes for guessing as the answer seems too trivial. The figure of Rs 1.76 lakh Cr effortlessly flashes into our mind – estimated by the CAG as the maximum “notional loss” on account of precious spectrum granted to the operators at less than market value. Actually, you will be surprised to know that the real economic loss incurred at that time was not even close to the maximum “notional loss” estimated by CAG. But the impact was much larger due to the decisions taken subsequently, influenced by the fear of punitive actions by the investigating agencies. To appreciate this we need to navigate our way through the facts.
How many new players was introduced?
In 2008, the then telecom minister gave away new licenses bundled with 2G spectrum in the 1800 MHz band. At that time the market had 5 GSM players (Bharti, Vodafone, Idea, Aircel, BSNL) and 2 CDMA players (RCOM and Tata). DoT’s new directive allowed the 2 existing CDMA players (RCOM and TATA) to enter the GSM space, along with 4 new GSM players (Unitech, Videocon, Etisalat, STel). Also, a new player (MTS) allowed entry in the CDMA space. Hence, the total number of players practicing a specific technology doubled form 7 to 14.
