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Thursday, June 21, 2012

Speaking on Mobiles - know what is 2G and 2G scam

Indians, generally speaking are speaking !! – the whole Nation appears to be engrossed in talking – on the streets, at home, at workplace, in public places including Temples, hospitals, cinema theatres and more. Some do not stop talking on the phone even when crossing roads or crossing railway tracks, even after reading news of some having paid dearly for the same.   The elite India reads newspapers, discusses, there are 24X7 newschannels which are agog with reports, analysis and investigative reports – all on 2 G, to be precise, Spectrum scam.  Is the Nation concerned, anxious, worried, curious or just wiling away time ?

Modern day youngsters would hardly understand the times when there were only a handful of telephone connection in a Metropolitan city street. Small cities had numbers with 4 digits. The Branch where I worked on the busy Mount Road had a 5 digit no. in mid 80s.  People were still able to talk to each other on landlines despite the fact that persons were moving away, travelling, could be out of their seat and the like.  Office to office communication, especially out of the City was tougher.  There was something known as STD – only few phones would have that facility – there was the added facility of specifying ‘the preferential time’ and ‘the person whom we intend talking to’ [known as PP].  Telephone Dept would establish connection with the recipient office and connect the call only when the particular person is available.

It is mobile World now -   Mobile radio telephone systems preceded modern cellular mobile telephony technology. Since they were the predecessors of the first generation of cellular telephones, these systems are sometimes retroactively referred to as pre cellular.  Those were the ones  usually mounted in cars or trucks, though briefcase models were also made. Typically, the transceiver (transmitter-receiver) was mounted in the vehicle trunk and attached to the "head" (dial, display, and handset) mounted near the driver seat.
Then came the 1st Generation - 1G (or 1-G) refers to the first-generation of wireless telephone technology, mobile telecommunications. These are the analog telecommunications standards that were introduced in the 1980s and continued until being replaced by 2G digital telecommunications. The main difference between two succeeding mobile telephone systems, 1G and 2G, is that the radio signals that 1G networks use are analog, while 2G networks are digital.  Both the systems would use digital signaling to connect to radio towers – in 2G voice during a call is encoded to digital signals in 2G whereas 1G is only modulated to higher frequency, typically 150 MHz and up.

2G wireless telephone technology was commercially launched on the GSM standard inFinland by Radiolinja in 1991. In this, phone conversations were digitally encrypted; 2G systems were significantly more efficient on the spectrum allowing for far greater mobile phone penetration levels; and 2G introduced data services for mobile, starting with SMS text messages.  In India, the 2G spectrum scam involved officials in the government of India illegally undercharging mobile telephony companies for frequency allocation licenses, which they would use to create 2G subscriptions for cell phones. The shortfall between the money collected and the money which the law mandated to be collected is estimated to be  176,645 crore (US$35.24 billion) as valued by Comptroller and Auditor General of India based on 3G and BWA spectrum auction prices which held in 2010.  The exact loss amount is disputed and keeps varying by various accounts.  Kapil Sibal, minister for communications & IT, claimed in 2011 during a press conference that no or "zero" loss was caused by distributing 2G licenses on a dubious first-come-first-served basis instead of by an open auction process.

In Feb 2012, the Apex Court of the Nation delivered judgement on a public interest litigation (PIL)  declaring allotment of spectrum as "unconstitutional and arbitrary" and quashed all the 122 licenses issued in 2008 during tenure of A. Raja (then minister for communications & IT).  It was stated that allocations were made at the cost of public exchequer, with the gains going to some favoured companies.  Credit for exposing the scam mainly goes to The Pioneer's journalist J Gopikrishnan, who won  Ramnath Goenka Journalist of the Year Award and Dr. Subramanian Swamy, who pursued it in court of law. In 2011, Time magazine listed the scam at number two on their “Top 10 Abuses of Power” list (just behind the Watergate scandal)

There is more muddle and after so much still the base price for the sale of spectrum remains loose.   An empowered group of ministers (eGoM), headed by FM Pranab Mukherjeee  is to finalise a base price ; and it is expected  that the committee would allow mobile firms to use spectrum as collateral and raise funds from banks.  There are indications that eGOM would bide for more time in studying TRAI report on the impact of spectrum pricing.  It is stated that the present recommendations of reserve prices  are considered very high by the telephone operators. Trai, following a consultation process with the industry, recommended a base price of Rs 3,622 crore for each megahertz of airwave in the 1800MHz band. The government is  fighting an August 31 deadline set by the Supreme Court to hold the sale of spectrum.   An important Committee with a head who is  expected to resign over the weekend – which will give way for selection of a new chairperson  will sure entail lot of delay.  In the event of existing players defaulting, the spectrum would be auctioned by the lender under the supervision of the DoT, and all proceeds in excess of the liability would be remitted to the government.

This proposal would make it compulsory for the operators to match the auction-determined price for their existing 2G airwaves for the remaining period of their licences – looks a simple statement, but some reports put it that this involves crores of money value and would impact players like RCOM, Tata Teleservices, Bharti Airtel and Vodafone – and those players who have  both GSM and CDMA services will have to pay more.   There are some reports that Tata Teleservices  has already warned that it will take legal action against the government if it is asked to pay  higher spectrum charges irrespective of the validity of the licence.  The telco’s rationale is that  it will be the worst affected because  its permits are valid until 2023-24 unlike rivals such as Bharti Airtel and Vodafone whose licences will come up for renewal from 2014 to 2016.

Sure there is mind-boggling amounts involved and so much of digital data inflow, making it too difficult for the common man to understand what this is all about. Simple thing is we will keep talking on the mobile, while walking, eating, praying, or in other act – on street, street corners, home, office, theatre, railway station, temple…………… Can you imagine living without a mobile even for a day.. dare leaving your mobile at home when you go for a walk, when you go to temples and when you go to cinema – after all people were not born with cellphones and people did exist a couple of decades ago.

With regards – S. Sampathkumar.

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