22, నవంబర్ 2012, గురువారం

Know Their Minds

"Many including me would have relished seeing Kasab lynched and tortured before being put to death" --Bollywood  Director  Ramgopal Varma

 (His film on 26/11 is going to be completed and now he says, "...as perfect icing on the cake, I got this ending of Kasab's hanging")

"A public hanging of Kasab would have been a lesson for any body who causes loss of life in our country"..."Gandhian" Anna Hazare

"Why should I rejoice Kasab's death? I will rejoice when little innocent children will stop being taught to kill in the name of God n Religion"....Tweet from Actor Ashis Choudhary whose sister Monica and her husband too were killed on 26/11. He told , "Justice is done to a small part of a huge problem" "I am a father, I don't want to set that as an example to my children"

Hanging Kasab for his crime is different. But why it should be made as a public tamasha? For whose benefit?



Beware of the Evil Forces

The evil forces are inciting communal hatred by demanding hanging of terrorists of one particular religion excluding the terrorists of other religions. In fact, terrorism is terrorism, irrespective of the religious affiliation of the concerned terrorist.

Hanging Kasab is not the final justice against the terrorists responsible for the 26/11 Mumbai killings. Kasab is only a small fry. The masterminds behind the 26/11 incident are protected by Pakistan and America. Though the evil forces inciting communal hatred are condemning Pakistan for protecting some master minds behind the 26/11 killings, they are silent about the protection given by the US to some master minds behind those killings. David Headley is a Pakistani American terrorist in prison in America, but protected by America. Though he was one of the master minds behind the 26/11 killings, the American Government has not agreed to extradite him as demanded by India. But the evil forces inciting communal hatred in the name of fighting against terrorism are silent about this role of the American imperialism. These evil forces demanding hanging of terrorists of a particular religion, are totally silent and in fact support, the terrorists responsible for inciting communal riots and killing thousands of people. Why they are not demanding hanging of the persons responsible for the communal killings in Gujarat and elsewhere?

To fight against and defeat the terrorism, the terrorists irrespective of their religious affiliation are to be opposed. The biggest terrorist the US imperialism responsible for violent killings of people in so many countries and aiding and abetting the terrorists must be opposed. The problem of poverty and unemployment being utilised by the terrorist organisations as a breeding ground for creating terrorists has to be solved. All terrorists irrespective of their religious affiliations must be punished. 

18, నవంబర్ 2012, ఆదివారం

The Spectrum Auction held on 12th and 14th November 2012


Does it prove that there is no 2G scam? What is its impact on BSNL?

Auction due to cancellation of the licenses by Supreme Court

Due to the cancellation of the 122 licenses of telecom companies by the Supreme Court, the entire  2G spectrum of 430 MHz allotted to these licensees  was freed. As per the directions of the Supreme Court, TRAI has given its recommendations regarding the auction of the spectrum thus made available. Based on these recommendations, the Government took certain decisions regarding the rules of the auction. The auction was held 12th and 14th November 2012. While 430 MHz of spectrum was freed due to the cancellation of the 122 licenses, the Government put only 240  MHz  in the auction. The Government expected an amount of Rs 40,000 crores in this auction.

Participants in the auction are very few

 But the participants in the auction were only 5 companies-Telewings(Uninor), Videocon, Idea, Vodafone and Airtel. The 2G spectrum auctioned was in the 1800 MHz band. Though the 2G spectrum  in 800 MHz band also was put for auction, the bidders had withdrawn and the auction of it was cancelled.The amount got by the Government in this auction of 1800 MHz band 2G spectrum  was Rs 9408 crores only. Only 43% of the spectrum put on auction was sold.  In this, the successful bidders have to pay one third amount immediately and the remaining amount has to be paid in 10 equal annual instalments with 9.75% interest.
Details of the Spectrum purchased by the participants in the auction
In this auction which was described as a “failed” auction by the corporate media, the winners were as below, circle wise:
  1. Telewings(Uninor)
AP (5 MHz), Bihar (5 MHz), Gujarat ( 5MHz), Maharashtra (5 MHz), UP-East ( 5 MHz), and UP-West ( 5 MHz)
  1. Videocon
Bihar (5MHz), Gujarat ( 5 MHz), Haryana ( 5 MHz), MP ( 5 MHz), UP-East (5 MHz), and UP-West (5 MHz)
  1. Idea
Assam (5 MHz), Bihar ( 1.25 MHz), J&K (5 MHz), Kolkata (5 MHz), NE ( 5 MHz), Orissa ( 5 MHz) , Tamilnadu ( 5 MHz), and West Bengal ( 6.25 MHz)
  1. Vodafone
Assam (2.5 MHz), Bihar (2.5 MHz), Haryana (2.5 MHz), HP (1.25 MHz), J&K (2.5 MHz), Kerala (1.25 MHz), MP (2.5 MHz), Maharashtra(1.25 MHz), NE(2.5 MHz), Orissa (2.5 MHz), Punjab (1.25 MHz), UP-E (1.25 MHz), UP-West (2.5 MHz),and West Bengal (2.5 MHz)
  1. Airtel
Assam (1.25 MHz)

Licenses cancelled and the spectrum got back in the auction

All the 22 licenses (there are 22 circles in the country for allotment of spectrum and any company has to take separate license for each circle) of Uninor (now Telewings) were cancelled by the Supreme Court. But it took spectrum for the above six circles only in this auction. But the cancellation of its 22 licenses by the Supreme Court will come into effect from 18th January 2013. By that time Telewings has to decide whether to purchase spectrum for the remaining circles in the auction to be held further or to close its operations in all other circles except the above 6 circles.
All the 21 licenses heldby Videocon were cancelled by the Supreme Court. But it preferred to purchase the spectrum in this auction only for the above said 6 circles. By 18th January 2013, when the cancellation of the licenses come into effect, it has to either purchase the spectrum for remaining circles or close its operations in those circles.
13 licenses of Idea (including that of Spice which merged with it) were cancelled by the Supreme Court. But it has licenses in other circles also besides these cancelled 13 circles. However, Idea did not purchase spectrum for all the cancelled 13 circles. In this auction it got back spectrum for the cancelled 7 circles only and got additional spectrum in Bihar.

No license of Vodafone was cancelled by the Supreme Court, but it purchased additional spectrum in this auction in the 14 circles as detailed above.

No license of Airtel was cancelled by the Supreme Court. But it purchased additional spectrum in one circle in this auction as detailed above.

Further, although the 21 licenses of Loop, 15 licenses of Etisalat, 6 licenses of S-Tel, 3 licenses of Tata Teleservices and 21 licenses of Systema Shyam (MTS) were cancelled by the Supreme Court, they have not participated in this auction. After the expiry of their licenses in January 2013, their subscribers have to migrate to other telecom operators. But Systema Shyam, owned by a Russian Company is continuing its legal battle against cancellation of its licenses by the Supreme Court.

Government will get only Rs 379 crore in this year

As per the decision of the Cabinet, the amount paid by the Companies for the licenses which were cancelled by the Supreme Court has to be adjusted against the amount to be paid by the companies for the spectrum they purchase in this auction.

Telewings (Uninor) has to pay a total amount of Rs 4018 crores for the spectrum it purchased in this auction. In this, one third, that is, Rs 1339 crores has to be paid in this year, and the remaining in 10 annual instalments. But the amount to be refunded to it for its cancelled licenses is Rs 1658 crores. This has to be adjusted against the amount to be paid by it for the spectrum purchased in this auction.  Therefore Telewings (Uninor) need not pay any amount this year.

Videocon has to pay a total Rs 2222 crores for the spectrum it purchased in this auction. In this it has to pay one thaird, that is, Rs 733 crore in this year. But the amount to be refunded to it for the licenses cancelled is Rs 1500 crore. Hence it need not pay any amount for this year as well as for next year.

Idea has to pay a total  Rs 2030 crores for the spectrum it purchased in this auction. In this, it has to pay one third, that is, Rs 677 crore this year. But the amount to be refunded to it for the licenses cancelled is Rs 1170 crores. Hence it need not pay any amount this year.

Vodafone and Airtel together have to pay Rs 1138 crores. Their licenses are not cancelled and hence Government need not refund any amount to them. If they decide to pay one third of this amount this year instead of paying the entire amount ( Option is available either to pay one third immediately and the rest in 10 installments with 9.75 per cent interest or to pay the entire amount at a time immediately), then the Government will get Rs 379 crores only.

If the realisation in this auction as expected by the Government is Rs 40,000 crore, then the Government would have got one third of it that is Rs 13300 crore in this year. But in view of the poor response to the auction, the Government will get Rs 379 crore only in this year.

Whether the CAG gone wrong?Whether really there is no 2G scam?

After this auction, the Communications Minister  Kapil Sibal, Finance Minister Chidambaram and other Ministers of UPA are campaigning that the 2G scam is a myth created by the wrong calculations of the CAG (Comptroller and Auditor General). They are asking the question that If the loss to the exchequer in the 2G scam is Rs 1,76,000 crore as calculated by the CAG, in the auction, the amount of payment to the Government should have been atleast  Rs 40,000 crore as expected by the Government(since only a part of the spectrum available due to cancellation of the 122 licenses was put for auction)where as only Rs 9407 crores was realized in the auction. The Ministers and the UPA Government and the Congress party are now saying that in fact there is no 2G scam and it is only a creation by the CAG. The media owned by the Corporates is also singing the same song. The Economics Times has written an obituary to 2G scam. At the best they are willing to agree that there may be some irregularities committed by the then Minister A.Raja, but there is no 2G scam.

On this basis, they are further campaigning that the unnecessary and mythical allegations of corruption and scams has resulted in investors keeping away from our country and also resulted in fear among the officers and ministers for taking decisions lest those decisions be construed as corrupt decisions. According to the UPA Government and the Corporate media, the 2G scam, and other scams are myths created by CAG and others and resulted in stalling the progress of the country. The Corporates, the politicians and the bureaucrats responsible for these mega scams now want to take the 2G auction failure as an opportunity to paint a picture as if the scams are only myths. They want thus to resort to further scams by creating a conducive atmosphere. But what is the fact?

2G scam is real, and not a myth

The CAG’s calculation of loss of Rs 1,76,000 crore to the exchequer on account of 2G scam was related to theyear 2008 in which year the said 2G licenses were issued (subsequently cancelled by the Supreme Court). At that time the number of mobile subscribers was fast increasing and roughly 80 lakhs of subscribers were being added every month. There was severe competition in the market. There was abundant money supply in the money market. The sensex touched the peak of 21078 points two days before the scam in 2008.  The average revenue per user (ARPU)  got by the telecom companies at that time was Rs 316/- per month. 575 applicants have qued up for licenses. Under such favourable conditions, it would have been possible to realise Rs 1,76,000 crore if the spectrum was sold in the auction. Instead, it was given at dead cheap price on the basis of the illegal FCFS(First Come First Served)  principle.( Even in 2010 also the market was rising and at that time in the 3G auction, more than 1,00,000 crore was realised by the Government. )

But the situation changed now.   There is no significant increase in the number of mobile subscribers and the ARPU is only Rs 97/- per month. Hence the present result of the auction when there is no rise in the market cannot be compared with 2008 when the scam occurred. There was definitely the scam and the calculations of the CAG regarding the scam were nearer to the truth.

Even in this auction also, for 20 licenses (Telewings-6, Videocon-6, Idea-8) the amount realized was Rs 8270 crores , whereas the amount got by the Government  for the 122 licenses issued by A.Raja in such most favourable conditions in 2008 was a mere  Rs9200 crore only. 

Further, it is to be noted that in 2007 November, S-Tel made an offer a for for spectrum as per which the amount  for the 122 licenses would have been Rs 67,000 crore, whereas the amount got was Rs 9200 crore only.

Also, on the basis of equity sold by the new licensee Swan, the value of the 122 licenses issued in 2008 would have been Rs 57000 crore whereas the amount got was only Rs 9200 crore. On the basis of 3G auction held in 2010, the CAG made the calculation for the 122 licenses of 2G issued in 2008 and the value should be Rs 1,76,000 crore where as the value got was only Rs 9200 crore.

Therefore definitely there was the 2G scam and it was a megascam costing the exchequer anywhere between Rs  57000 crore to Rs 1,76,000 crore.

Is the base price fixed in this auction too high?

The owners of the private telecom companies and the telecom minister Kapil Sibal are blaming the TRAI whose recommendation resulted in fixing the minimum auction price fixed in this auction for 5 MHz  of spectrum for all the 22 circles at Rs 14000 crore. They are campaigning that such a high level base price resulted inlack of considerable participation in the auction. Some of them have earlier argued that the base price should be fixed as low as Rs 1658 crore which was the price fixed in 2001. Thus they want the base price to be very very low so that they can get spectrum again at dead cheap rate, inspite of the auction.

They are arguing that the TRAI has done a wrong calculation by fixing the base price of 2G spectrum as more than the price of 3G spectrum realized in 2010. They are asking the question how the 2G spectrum of lower capcity can have more value than the 3G spectrum of higher capacity.

Liberalisation of 1800 MHz band spectrum justifies its pricing more than the 3G spectrum price

The 3G services are being provided on 2100 band spectrum, which is popularly called as 3G spectrum.  2G services are being provided on 900 MHz band as well as 1800 MHz bands spectrum. For the present we are concerned with 1800 MHz band spectrum which is auctioned. Therefore any body will think that the 3G spectrum (2100 MHz band spectrum) is more efficient than 2G spectrum (1800 MHz band spectrum). But in fact, the 1800 MHz band spectrum is more efficient than 2100 MHz band spectrum. The capex(Capital expenditure) and opex(Operational expenditure) are lower for lower frequency bands when compared with higher frequency bands. This is because for covering the same area, 1800 MHz band spectrum requires less number of towers compared to 2100 MHz band spectrum. Besides the GSM technology, the 1800 MHz band spectrum can be utilized for advanced technologies like UMTS and LTE. By January 2012, approximately 50 devices were available with LTE technology which can be utilized on 1800 MHz spectrum, for broadband services. Among these 50 devices are routers 16, dongles 15, modules 13, tablets 2, and smart phones 4.  ITU(International Telecom Union, the body affiliated to United Nations and responsible for regulating telecom systems world wide) has already earmarked 800/900/1800 MHz bands for IMT advanced services. Commercial LTE services (4G services) have been lauched in several European countries and in Saudi Arabia and Hongkong utilizing 1800 MHz band spectrum. Providing widespread coverage with LTE in the 1800 MHz band is substantially cheaper than covering the same area with LTE using higher frequency bands.

 Thus the 1800 MHz band spectrum which is at present restricted by license condition  for providing 2G GSM services only , is more efficient than the 2100 MHz band spectrum (3G spectrum) and hence requires to be priced more than the 2100 MHz band (3G) spectrum. Whoever purchased this 1800 MHz band spectrum in the auction held on 12th and 14th November 2012 are given the right to use it for providing any service including 4G services with any technology. Thus the use of 1800 MHz band spectrum is liberalised along with this auction. Hence the TRAI has done the correct thing by recommending more base price for the 1800 MHz band spectrum auction compared with the 2100 MHz band (3G) spectrum auction. In fact while the TRAI recommended Rs 18000 crore base price for 5 MHz spectrum for all the 22 circles, the Cabinet reduced it to Rs 14000 crores only,  to favour the telecom operators.

The private operators are arguing that there is no benefit of liberalisation of spectrum as far as our country is concerned, since most of the people cannot pay for the broadband services with LTE technology (4G services) and even 3G services are not that much picking up. This will be so for two or three years more until the devices become less costly. They are also arguing that since for another 2 or 3 years, there will be no significant increase in 3G/4G services, the 1800 MHz band spectrum need not be treated as liberalized spectrum till then and the base price in this auction should have been decided by assuming the 1800 MHz band spectrum as useful for 2G services only. They further stated that when the technological development reaches such a stage after 2 or 3 years when the devices become cheap and more and more number of people can afford 3G/4G services, at that time additional amount can be collected for liberalization of the spectrum. But the difficulty is that the auction cannot be held now at a lower price and then the price cannot be increased further after two or three years by an administrative order of the Government. It will be illegal. Hence the base price has to be decided treating 1800 MHz band spectrum as liberalized spectrum.

As per the data revealed by the TRAI in its recommendations, the liberalized spectrum capable of voice and dataservices in 2G, 3G or newer technologies are fetching higher prices in the auctions worldwide. The price arrived in these auctions per MHz per population is in the range of 0.4 to 0.6 euros in Europe . As against these prices in other countries, the price of 3G spectrum found in India in the auction in 2010 was  0.21 euro only.The base price of Rs 3622 crore per MHz spectrum for all 22 circles recommended by TRAI for 1800 MHz band spectrum  works out to only 0.25 euro per MHz per population. The per minute cost increase for the subscriber as a result of the auction of spectrum on the basis of this base price, as per the calculation of TRAI will be 4 paise in 2012-13 and it will be reduced to one paisa in 2031-32. Moreover, by 2015 the main driver for the increase in revenue will be data access services, not voice services. Therrefore there will not be any significant increase in tariff on oaccount of the base price fixed by the TRAI for the auction.

Whether the base price fixed by the TRAI will result in significant increase in tariffs?

TRAI has given detailed calculations in its recommendations on spectrum auction in this regard. As per these calculations, with the base price fixed by it and its further increase in the auction, the increase in tariff per minute will not be more than 5 paise in 2012-13
The reason for the resistance of the private operators against the base price Rs 14000 crore
The Cabinet has taken another decision. As per this decision, the existing operators have to pay for the 2G GSM (1800 MHz and 900 MHz band spectrum together) spectrum they are having over and above 4.4 MHz, an amount equal to the price found in this 2012 auction, proportionately for the remainining period of their current license. The same rate has to be paid for the 1800 MHz spectrum they will get on renewal of their license when the current license expires. For example, the licenses of Airtel will expire in 2014 and Vodafone in 2015. Therefore they ahve to pay for the spectrum they are holding beyond 4.4 MHz proportionately for the period starting from 1-1-2013 till the expiry of their license in 2014/15. Again for the next 20 years of their renewed license starting from 2014/15, they have to pay for the spectrum in 1800 MHz band at the same rate decided in this 2012 auction. Hence all the private telecom operators are interested in seeing that the spectrum price does not go beyond the base price fixed for the auction held on 12th and 14th November 2012.

Thus it is clear that the private operators have colluded to see that the spectrum price in this auction is fixed at the base price. Also, for the lucrative Circles Delhi and Mumbai they want to see that the spectrum price should be still lower. Hence no bidding is there for Delhi and Mumbai in this auction.

Collaboration to keep the spectrum price low and to increase the tariffs

Once the private operators have paid the one time payment for the spectrum they are holding beyond 4.4 MHz for the remaining period of their license, as per the price found in this auction, they will become eligible for providing 4G services also on their existing 1800 MHz band spectrum. Also for their next term of their license, they will be allowed to continue with the 1800 MHz band spectrum at the same price that is found in his auction. Therefore as a long term project to keep the spectrum price low, the private operators have collaborated. After this, their next step is to increase the tariffrs.

What about BSNL and MTNL?

BSNL and MTNL are having sufficient spectrum and they need not bid for the spectrum in this auction. But like any other operator, they ahve to pay the one time amount for the 2G spectrum they are holding over and above 4.4 MHz , proportionately for their remaining period of current license, at the rate found in this auction. At the rate of the base price of Rs 14000 crore fixed for this auction for all the 22 circles proportionately for its remaining license period, it is estimated that BSNL has to pay Rs 6250 crores for the 20 circles  (It is not there in Delhi and Mumbai). In this auction held on 12th and 14th November 2012, the bidding was there for 18 circles and there was no bidding in case of Delhi, Mumbai, Rajasthan and Karnataka. In case of BSNL, since there is no bidding in Karnataka and Rajasthan, it has to pay for the spectrum it is having beyond 4.4 MHz in all other circles(18 circles). Therefore it may have to pay around 5800 crores. One third of it will be Rs 1933 crore, which is to be paid in this year (It is to be noted that further, when the spectrum is auctioned in case of Karnataka and Rajsthan circles, BSNL has to pay the pro-rata amount for the remaining license period for these two circles).  But it was stated by the Minister Kapil Sibal that a note will be put up to Cabinet seeking its approval for exempting BSNL from such payment. Whether it will happen and if so in what shape is not known. If BSNL is exempted from the payment, does it mean that BSNL will be eligible for providing 4G services on its 1800 MHz band spectrum, like others who are paying the amount? Or, does it mean that the Government will pay this amount for BSNL so that BSNL will be eligible to provide 4G services on its 1800 MHz band spectrum like other operators who pay the amount? It is to be noted that the current license period of BSNL is until 2020 since it was given license for mobile services in 2000 only.

The Govrnment should pay this amount for BSNL and allow the liberalisation of spectrum for it. BSNL and MTNL are facing losses mainly due to the landline operations which are essentially loss making, but socially required. Also As PSUs they are catering to the security requirement sof the country in telecom sector. Besides the social obligations of maintaining loss making landlines and national security, they are carrying out several other social responsibilities including prevention of  increase in tariffs by private operators. Hence it is the responsibility of the Government to provide spectrum in any band  without any upfront payment to BSNL and MTNL and to allow them to utilize the spectrum in any band to provide any service including advanced services without any one time payment for that purpose. Otherwise there will not be enough competition in the advanced services and the private operators will fleece the subscribers. Moreover, the PSUs making losses for carrying out social responsibilities cannot be allowed to become unviable or sick by compelling them to pay such huge amounts for the spectrum. If they become sick and unviable, the national security and public interest will suffer.

The game of the Corporates, the UPA Goverment ,  the BJP and the foreign should not be allowed

The Goveernment, the private telecom operators are colluding to see that the base price for the auction is further reduced for the lucrative circles Mumbai, Delhi and Karnataka. They also want to utilise their manufactured poor response to the auction asthe ground for white washing the 2G scam so that they can further resort to low pricing of spectrum. At the same time they want to increase the tariffs.They also want to campaign that in the name of the allegations of scams, the progress of reforms should not be stiopped. People should think that scams are not happening even though they are really happening, so that they can go ahead with their reforms for looting the country. The “opposition” BJP is interested in talking against scams, but not against the root cause of the scams, that is big Corporates. This is because the BJP and the regional parties like TDP, DMK,AIADMK, sivsena, SP, YSRC, TRS (except the Left parties)  etc represent the interests of the capitalist classes. It is also to be noted that the foreign capital interested in investing in telecom sector is also demanding lower price for spectrum, only to grab quick profits. The corporate media is singing the same song.

This game of the UPA Government, the Corporates, the BJP and the media should be defeated and the Government must be pressurized for not reducing the base price of the spectrum any further and to exempt BSNL and MTNL for any payment for the spectrum already allotted or to be allotted and also for allowing liberalisation of spectrum for BSNL and MTNL without any payment. The PSUs BSNL and MTNL must be strengthened by the Government so that they become the instruments to defeat the games of the private operators.

-----P.Asokababu

9, నవంబర్ 2012, శుక్రవారం

Whether BSNL and MTNL will be given relief from payment of one time charge for spectrum held by them beyond 4.4 MHz?


As per the decision taken by the Cabinet on 8-11-2012, all the telecom operators have to pay one time charge for the spectrum held by them beyond 4.4 MHz and it is reported that as per this decision, the BSNL and MTNL together have to pay about Rs 12000 crore.

After taking of this decision by the Cabinet, Sri Kapil Sibal is reported to have told that the Communications Ministry will separately send a note to the Cabinet for exempting BSNL and MTNL from such one time payment. This is the news that appeared in the website “ Zeenews.india.com” on 9-11-2012.

But the private operators are opposing such exemption to BSNL and MTNL. They are likely to challenge any such decision for exempting BSNL and MTNL, as per the news paper reports. It is argued that in case the PSUs are exempted from this payment, they will not require to raise the tariffs whereas the private operators will require to raise the tariff after paying this one time charge. The private operators are arguing that it will be an unfair advantage to PSUs BSNL and MTNL if they are exempted.

If the Government decides to exempt BSNL and MTNL from such payment for spectrum and if it results in tariffs not increasing, it will be good for the country since people will be benefited  In fact, the Government should decide to support BSNL and MTNL fully in the interest of the Country as is being done by China for its PSUs in telecom services sector. China is not collecting any charge for the spectrum allotted to its PSUs.

Decisions of the Cabinet on 8th November 2012 on spectrum allotted to existing telecom operators will lead to destruction of BSNL and MTNL


Back Ground for taking these decisions

Consequent to the Supreme Court’s judgment cancelling 122 licenses given to the new telecom operators in 2008 illegally, the  GSM spectrum given to them in 1800 MHz band has become free. As per the order of this judgment, the Government is auctioning this spectrum thus become free. The auction will start on 12-11-2012. The Government decided that the base price in this auction will be Rs 14000 crore for 5 MHz quantity of spectrum for the entire 22 circles together. The bidders can bid for any circle/some circles/all circles.

But the existing operators have not paid any amount for the spectrum allotted to them before 2001 and only Rs 1650 crore for all the circles for the spectrum allotted to them in 2001 or there after. On the other hand, the new operators who will buy spectrum in the auction to be held now on 12-11-2012 have to pay minimum Rs 14000 crore for 5 MHz spectrum for all 22 circles. If the existing operators are enjoying spectrum at no cost or nominal cost of Rs 1650 crore, why the new operators should pay Rs 14000 crore for all India license for spectrum? Therefore to remove this discrimination, based on the principle of equality, an issue regarding charging the existing operators for the spectrum held by them for the remaining period of their license on the basis of the price to be determined by the auction to be held on 12-11-2012 has arisen. This issue was examined by the TRAI and it gave its recommendations. These recommendations were considered by DoT and its proposals were sent to the EGoM(Empowered Group of Ministers). The EGoM has considered the proposals sent by DoT  and made some recommendations. These ecommendations of the EGoM were considered by the Cabinet meeting held on 8-11-2012 and certain final decisions were taken.

Decisions of the Cabinet

Following are the decisions of the Cabinet taken in this meeting held on 8-11-2012:

a)      The existing operators need not pay any amount for the spectrum held by them upto 4.4 MHz ( This is 2G, GSM spectrum in 900 and 1800 MHz bands)

b)      For the spectrum held by them over and above this 4.4 MHz, the existing operators have to pay a one time charge, on the basis of the price to be found for the spectrum in the auction to be held from 12-11-2012, on pro-rata basis for the period from 1-1-2013 to till the date of expiry of their existing license period.

c)       For the spectrum held by the existing ooperators over and above 6.2 MHz, a one time charge will be levied from July 2008 to 31-12 2012 at the rate of the price determined for spectrum in 2001 duly increased on the basis of the PLR (Prime Lending Rate) of SBI (State Bank of India).

  (Note: The Government allotted 4.4 MHz spectrum to the existing operators initially, and subsequently allotted more spectrum to them based on increase in the number of subscribers. In some Circles, some operators were given 8 MHz and even 10 MHz spectrum on this basis. Subsequently, in July 2008 the Government decided that the maximum quantity of spectrum to be given along with license should be 6.2 MHz and additional amount has to be collected for the spectrum over and above this 6.2 MHz. But inspite of taking this decision in July 2008, the Government did not collect any thing from the existing operators for the spectrum held by them beyond 6.2 MHz. Moreover, the Government could not allot more than 4.4 MHz quantity of spectrum to some operators who got license in 2001 or there after, since there was no spectrum available.  Hence to bring parity between the existing operators who could not be allotted more than 4.4 MHz spectrum and the existing operators who were allotted more than 4.4 MHz spectrum, the Government took the decision not to charge any amount for the spectrum held by the existing operators  upto 4.4 MHz from 1-1-2013. Since the decision was taken in July 2008 to charge the operators for the spectrum held by them beyond 6.2 MHz, the Cabinet now decided to implement it now for the period July 2008 to 31-12-2012).

d)      The existing operators will be given the option to surrender the spectrum beyond 4.4 MHz if they do not wish to pay this charge.

e)      The existing operators will be allowed equated annual instalments for the balance number of years of license (such that the last instalment is payable not later than 12 calendar months prior to the expiry of the license) considering interest rate @ 9.75% as approved by the Ministry of Finance in the case of new successful bidders for deferred payment. The licensee will also have the option of full upfront payment of one or pre-payment of one or more instalments.

On the issue of charging in the event of spectrum sharing and intra circle merger, the Cabinet tokk the following decisions based on the recommendations of the EGoM:

a)      Sharing of spectrum between the telecom operators will be permitted without any one time spectrum charge, if both operators sharing the spectrum have paid for spectrum beyond 4.4 MHz, as decided above. The license conditions will not be changed for both operators. Both operators have to pay spectrum usage charge (in addition to the one time charge as decided above) at the slab rate applicable for the entire combined spectrum holding.

b)      In the event of merger of two companies on intra circle basis (since license is given separately for each circle, merger of two operators will take place on circle basis. Hence it is  intra circle merger), the resultant merged entity would be required to pay to the Government, the differential between the entry fee and the current auction determined price, on a pro-rata basis for the remaining period of validity of the  license.

These decisions are discriminatory and will destroy BSNL and MTNL

Airtel, Vodafone (at that time with a different name Hutch), Idea, MTNL and BSNL are the old operators who were given license for mobile services prior to 2001. While Airtel, Vodafone and Idea were given licenses in 1994/1995/1996, MTNL was given license in 1997 and BSNL in 2000. The spectrum allotted to them prior to 2001 was almost free without any one time payment, except for the annual payment of spectrum fee (spectrum usage charge) based on revenue earned.

While the 20 years license period of Airtel will expire in 2014, the 20 year license period of MTNL will expire in 2017 and that of BSNL will expire in 2020. Thus while Airtel is having only 2 years of the existing license period remaining, BSNL is having 8 years and MTNL is having 5 years remaining license period. Hence BSNL and MTNL have to pay more amount as one time charge as per the decision of the Cabinet since the amount is based on the remaining period of the current license. While Airtel enjoyed spectrum without any one time payment for 18 years, from 1994 to 2012, MTNL enjoyed it only for 15 years and BSNL omly for 12 years. To bring equality on par with Airtel, BSNL and MTNL should also have been allowed 18 years free spectrum. But this was not done. Hence it is discriminatory.

If the law of equality should strictly prevail, then why the existing operators should be allowed spectrum upto 4.4 MHz without any one time payment while  the new operators who will be bidding for the spectrum in the auction on 12-11-2012 have to pay fully for it without any such free 4.4 MHz spectrum?

When some of the existing operators were not even allotted the 4.4 MHz contracted spectrum, how the other existing operators can be allotted 6.2 MHz spectrum until July 2008? How it can be equality?

Based on the remaining license period being 8 years, BSNL has to pay Rs 6250 crores (it is not there in Delhi and Mumbai which are most profitable)  and based on the remaining license period of 5 years, MTNL  (It is there in Delhi and Mumbai only and nowhere else)has to pay Rs 4640 crore. But inspite of having spectrum in the most profitable Delhi and Mumbai Circles along with other Circles, Airtel has to pay about 4000 crore only. Vodafone and Idea are required to pay Rs 3000 crore and Rs 1700 crore only.

BSNL has to pay this amount of Rs 6250 crore in 7 instalments (Its existing license period will expire in January 2020) along with 9.75% interest. Therefore from 2013 onwards, every year it has to pay more than Rs 1000 crore towards this charge for the spectrum beyond 4.4 MHz. Added to this, it also has to pay the charge for the spectrum it is holding beyond 6.2 MHz for the period July 2008 to December 2012.

BSNL and MTNL are facing losses for the last three years and they are not in a position to pay this amount. The losses faced by them are on account of maintaining landlines which are commercially loss making, but socially required. Hence it is the duty of the Government to compensate them for these losses. But the Government stopped such compensation coming under the pressure of the private operators and the Indo-American CEO Forum (Joint Forum of the big capitalists of India and America). Thus Government is intentionally causing losses to BSNL and MTNL. Now it is imposing more burden on them in the name of one time charge for the spectrum. Such a burden on them will lead to their destruction. They will become sick and unviable.

The BSNL and MTNL managements requested the DoT to exempt BSNL and MTNL from this payment. The DoT recommended for such exemption. The EGoM also recommended for the same. But the Cabinet did not agree and imposed the payment.

In case BSNL and MTNL do not want to pay this amount, as per the decision of the Cabinet, they have to surrender the spectrum they are having beyond 4.4 MHz. BSNL is having 10 MHz spectrum in AP, Assam, Bihar, HP, Haryana, Karnataka, Kerala, Kolkata, Maharashtra, MP, NE, Orissa, UP (E), and  UP(W). It is having 8 MHz spectrum in Chennai, J&K, Rajsthan,Tamilnadu (Subsequently TN and Chennai were allotted 2 MHz more, together)  and West Bengal. It is having 6.2 MHz spectrum in Punjab and 7.4 MHz in Gujarat. Therefore in case it opts not to pay this one time charge, the BSNL has to surrender the spectrum it is having in all these circles, over and above the 4.4 MHz. When more and more spectrum is required in view of the increasing importance of data services, surrendering the spectrum already it is having will not be good for BSNL. At the same time it cannot pay this one time charge in view of the  increasing losses imposed on it by the policies of the Government.

Why the Cabinet did not exempt BSNL and MTNL from this payment?

The Cabinet came under the pressure of the private operators who demanded that if BSNL and MTNL are to be exempted from this payment, they also should be exempted. This is an unreasonable demand. The private operators are doing their business only for profit and they do not carry any social responsibilities facing losses. But BSNL and MTNL are PSUs working not only for business and profit, but mainly for carrying out the social responsibilities of the Government. While BSNL and MTNL are maintaining landline network which makes losses necessarily   and providing together 70 per cent of the brioadband connections in the country by utilizing the landline network, no such social responsibility is carried out by the private operators. While BSNL is providing employment to about 3 lakh employees , Airtel is providing employment to only 25,000 employees. Thus the task of providing employment is fulfilled by BSNL more effectively as a social responsibility where as Airteel is not carrying any such social responsibility. While BSNL is providing SC/ST reservations, Airteel is not carrying out this responsibility. While the Government has to depend on BSNL and MTNL for national security in telecom services seector, no such responsibility can be fulfilled by Airtel. Therefore the Government has to allot spectrum to BSNL and MTNL in any band free of cost and also should allow them to provide any service including 4G services on the spectrum they are having, without levying any one time charge for it. In fact BSNL and MTNL are discriminated by  such unjustified imposition of charges for spectrum and denial of compensation for the landlines losses, inspite of carrying out several social responsibilities on behalf of the Government.

Save PSUs BSNL and MTNL to extend services at less cost to the people

The Private Operators are already threatening to increase telecom tariff since they are asked to pay the one time charge for spectrum. The mergers and acquisitions being allowed by the Government will result in reduction in the number of telecom operators leading to the situation where only a few big operators will remain and form a cartel among them to increase the telecom tariffs. It will lead to a high increase in the telecom tariffs. To prevent such monopoly practices, it is necessary that the PSUs BSNL and MTNL should survive and thrive well so that the private operators are restrained from increasing the tariffrs. To allow BSNL and MTNL as viable PSUs for carrying out various social responsibilities of the Government, the Government should allot spectrum in sufficient quantity in all bands free of cost to BSNL and MTNL, along with permitting them free of cost, to provide any service including 4 G service on any band of the spectrum. Besides this, the Goveernment should compensate BSNL and MTNL for the losses incurred by them on landlines.  The officers and employees in BSNL and MTNL and the progressive forces in the country should fight for this and change the policies of the Government in favour of the PSUs.

---P.Asokababu

5, నవంబర్ 2012, సోమవారం

Management’s plan for making BSNL viable-is it for fragmentation of BSNL into several entities?


As per the reports in the news papers, the CMD BSNL has submitted the following proposals to the Telecom Minister Sri Kapil Sibal for increasing the revenue of the BSNL, which is in losses since last 3 years:

  1. The CDMA net work  of BSNL will be given on lease to other operators. BSNL is having CDMA network throughout the country except in Delhi and Mumbai. On this network mobile services are being provided, utilizing CDMA technology and utilizing the 800 MHz band spectrum. GSM 2G services are more popular and provided on 900 MHz and 1800 MHz spectrum bands utilizing GSM technology, and most of the customers of BSNL are GSM subscribers only. The CDMA services subscribers with BSNL are about 50 lakhs only whereas the GSM subscribers are more than 10 crores. The CDMA network can be utilised by the operator taking it on lase either for providing wireless data services as is being done in case of Tata Photon or it can be used to provide full pledged services including voice and data by upgrading the network with additional investments. This is possible since the new telecom policy 2012 allows spectrum sharing. A consultant will be appointed by BSNL to suggest it a model for leasing out its CDMA network. The Consultant for this purpose will be appointed by January 2013. It is estimated that such leasing of its CDMA network will yield a revenue of Rs 250 crore.
  2. The Cell towers of BSNL will be hived off to form a separate subsidiary Company, so that its towers can be given on lease to other operators. The Consultant for suggesting the road map for the formation of this Tower Company will be appointed by the end of November 2012. BSNL is having 70,000 towers throughout the country and it is already having tower sharing agreements   with the private operators. It is expected that sharing of the excess tower capacity and other excess capacity will yield a revenue of Rs 1600 crore over 5 years.
  3. The real estate holdings of BSNL will be monetised.  A Consultant will be appointed by BSNL to evaluate its real estate properties, to assess the rental potential of its built up spaces, to suggest how to develop its vacant lands and to suggest disposing off its assets. The Consultant will be appointed by November 15th, 2012. BSNL is having 4400 hectares of land in 3500 towns throughout the country. BSNL is hiving off this 4400 hectares of land. It is said that the land bank of BSNL will be utilized for building call centers, software parks e, and for such other activities related to telecom.  This move of BSNL for utilizing its real estate comes afterthe suggestion of the Vijay Kelkar Committee for utilizing the lands available with Government Departments to generate huge revenue. As per estimation, BSNL will get revenue of Rs 250 crore upfront value on its real estate assets in 2013-14 and a rental value of Rs 250 crore every year starting from 2016-17 onwards.
  4. BSNL will utilize its telecom factories to set up electronic equipment manufacturing facilities in partnership with various manufacturers and it will generate revenue of Rs 500 crore.
  5. BSNL will utilize its training centers to impart training in telecom skills to various sections of the population and it will generate a revenue of Rs 200 crore over a period of 5 years.
  6. It will provide wi-fi based high speed internet services at public places like Malls, airports, hospitals, IT parks etc which will generate a revenue of Rs 25 crore in each zone ( there are 4 zones in BSNL) in the first year and Rs 50 crore in each zone from second year onwards.
  7. It will connect 15 lakh schools in the country with high speed internet and it will charge Rs 5000 per year per connection and it will yield a revenue of Rs 750 crore per year.
It is estimated that all these measures together will yield a total revenue of Rs 8000 crore to BSNL during next 5 years.

But the issue is why BSNL is unable to utilize its CDMA network to provide data services and other services when others having CDMA network are providing these services? Also if CDMA network is handed over to some body, if the cell towers are handed over to a separate subsidiary Company of BSNL , and  If the BSNL’s land assets are hived off as another subsidiary, what will be the shape of BSNL in future? If other operators are allowed to share the network of BSNL and provide services in their name without even having their own network, is it not allowing the competitor to use the network of BSNL? It appears that in the name of increasing the revenue, BSNL is proposed to be fragmented into several entities, thus weakening it more.

30, అక్టోబర్ 2012, మంగళవారం

Cross Talk on Spectrum Refarming-TRAI asked to give its View


Cross Talk on Spectrum Refarming-TRAI asked to give its View

2G services and spectrum bands

The 2G GSM mobile services in India are provided by the telecom operators utilizing the two spectrum bands 900 MHz band and 1800 MHz bands allotted to them. While the early entrants in the business (who were issued license before 2001) - Airtel, Vodafone, Idea, BSNL and MTNL  were issued 2G spectrum at first in 900 MHz band and thereafter in 1800 MHz band and hence got spectrum in both these bands, the later entrants like Tata, Reliance in GSM 2G services business were allotted spectrum only in 1800 MHz band since the 900 MHz band spectrum was allotted fully to the earlier entrants and hence not available.

900 MHz band more efficient than 1800 MHz band

But the 900 MHz band spectrum is efficient and superior compared to 1800 MHz band. Because the 900 MHz band has lesser wabe length, it will travel more distance and the signals transimitted on 900 MHz band are more potent for indoor coverage. 900 MHz band is 30-40 per cent better in coverage compared to 1800 MHz. Since the wave length is more in 1800 MHz band spectrum, its coverage is not as effective as 900 MHz band. Therefore more number of BTSs are required for the same area for 1800 MHz band spectrum compared to 900 MHz band spectrum. Thus 900 MHz band spectrum is cost effective since less number of BTSs is required.

The 900 MHz band is superior to 1800 MHz band on another count. Since the 900 MHz band is in use worldwide for the last 20 years, technology developed for operating the services utilising that band has become standardised and more developed. Even 4G broadband services also can be provided on 900 MHz band spectrum with less cost equipment.  But the existing license condition is preventing the provision of 4G services on 900 MHz band since as per the license condition only 2G GSM services are to be provided on this band. Once the license is renewed after the expiry of the present license or any new operator enters afresh with a new license and in case the Company with the renewed/new license has this 900 MHz band spectrum, it can provide 4G services also utilizing it.

Decision of the TRAI on Spectrum Refarming

Hence the Companies having 900 MHz band are demanding that they should be allowed to retain their 900 MHz band spectrum as it is on renewal of their license after the expiry of the present license period. They are ready to pay the market discovered price for this 900 MHz band spectrum for thir renewed license period. Market discovered price is the price found in the auction of the spectrum band. Airtel and Vodafone are having the 900 MHz band spectrum and their present license period will be over by 2014/15. They want that on the expiry of their license period, the 900 MHz band spectrum should not be taken away from them and they should be allowed to retain it for the next 20 years of their renewed license period starting with 2014/15. They are willing to pay the market price for it.

 But the Telecom Commission recently in its meeting held on 19-10-2012 has decided that on the expiry of their license period in 2014/15 for the telecom operators like Airtel and Vodafone,  the following will happen to the 900 MHz band and 1800 MHz band spectrum held by them:

(a)    900 MHz band spectrum will entirely be taken away from the telecom operators and if they want to have it in their next license period starting with 2014/15, they have to get it by purchasing it by participating in the auction to be held for selling the 900 MHz band. Thus on expiry of their license period, if they renew their license once again for another 20 years, they have to get 900 MHz band spectrum by participating in the auction. Otherwise they cannot have the 900 MHz band spectrum.
(b)   They can retain their existing 1800 MHz band spectrum fully without participating in the auction, by paying the market price for it.

(c)    If they are unable to get the 900 MHz band spectrum in the auction, then they will be allotted 1800 MHz band spectrum in the place of the 900 MHz band spectrum held by them earlier. They have to pay the market price for the 1800 MHz band spectrum.

(d)   This process of taking away the 900 MHz band spectrum from the operators having it on expiry of their license period and reallotting it on the basis of auction and replacing the 900 MHz band spectrum with 1800 MHz band spectrum in case the operator is not able to get back the 900 MHz band spectrum, is named as “Spectrum Refarming”.

Cross Talk due to clash of interests

But the Airtel and Vodafone are saying that if they have to replace their 900 MHz band spectrum with 1800 MHz band spectrum on expiry of their present license period, they have to replace their entire network built up for the 900 MHz band spectrum with a new network for 1800 MHz band spectrum and it will cost around Rs 1,00,000 crore for them. They are also arguing that in case they ahve to get 900 MHz band spectrum afresh for their renewed license period of 20 years starting with 2014/15, they have to pay around Rs 1,50,000 crore for it. They are saying both options are costly and it will lead to a huge increase in tariffs for the customers. Hence they are demanding that they should be allowed to retain thee 900 MHz band spectrum held by them at present, even for the renewed license period, so that they need not replace their present networks built up for 900 MHz band spectrum. They are willing to pay the market price for the 900 MHz band spectrum for the next license period.

This argument of Airtel, Vodafone etc is opposed by Tata, Reliance Com who are not having 900 MHz band spectrum. They are arguing that the Airtel and Vodafone are provided with the efficient 900 MHz band spectrum whereas they are deprived of the same and hence there is discrimination. They demand that there should be equality and level playing ground among all the players. Therefore thee decision of the Telecom Commission for taking away the entire 900 MHz band spectrum held by Airtel, Vodafone etc on expiry of their license period in 2014/15 and selling it in auction is correct since it gives equal opportunity to all to get the 900 MHz band spectrum by participating in the aauction. They are arguing that the Airtel and Vodafone cannot have a perpetual right on the highly efficient 900 MHz band spectrum.

Endangering the survival of BSNL and MTNL

BSNL and MTNL are also having 900 MHz band spectrum. But their present license period is upto 2020 and 2017 respectively. Hence immediately there is no problem for them. But those who will get  900 MHz band spectrum afresh or on renewal of their present license on its expiry, which will happen in 2014/15, will be able to provide 4G services using the 900 MHz band spectrum. But BSNL and MTNL will not be able to provide 4G services inspite of having 900 MHz band spectrum since the present license condition prevents providing services other than 2G services on 900 MHz band. If other operators start providing 4G services in a big way using 900 MHz band spectrum and BSNL and MTNL are not able to provide the 4G services, then they cannot survive in the competition. If BSNL and MTNL want to provide 4G services along with other operators in 2014/15, they have to surrender their 900 MHz band spectrum before the expiry of their license period and get it afresh in the auction, by the year 2014. Both these   options, that is,(a)  continuing with the 900 MHz band spectrum until the expiry of present license period in 2020/20117 without the eligibility for providing 4G services on 900 MHz band or (b) surrendering the 900 MHz band spectrum and get it back by pauying a huge amount (more than Rs 20000 crores) in the auction so as to be able to provide 4G services, are suicidal for BSNL and MTNL since they cannot withstand the competition without providing 4G services and at the same time they are not in a position to pay the huge amount of money required to get 900 MHz band spectrum afresh to be able to provide 4 G services, because of their  continuous and increasing losses.

Lobbying by the two groups of the Private Operators

The Airtel, Vodafone etc  are lobbying  against the decision of the Telecom Commission on spectrum reefarming and mounting  pressure on the Government .  They demanded that they should be allowed to retain the 900 MHz band spectrum for the next term of their license period also, by paying the market price. They are lobbying for their point, in the name of COAI(Cellular Operators Association of India).

On the other hand the Tata and Relaince are lobbying in the name of AUSPI(Association of Unified Services Providers of India. They are supporting the Telecom Commission’s decision that the 900 MHz band spectrum should eb fully taken away from Airtel, Vodafone etc on expiry of their license period and it should be put on auction so that they get equal chance for participating in the auction. They also are pressurising the Prime Minister and others.

Enter Sri Ahluwalia

Meanwhile, the Deputy Chairman of the Planning Commission, Sri  Montek Singh Ahluwalia, wrote a letter to the Finance Minister P.Chidambaram against the decision of the Telecom Commission on spectrum refarming. He demanded that the issue be referred to TRAI for its reconsideration since there is no clear road map for the spectrum refarming. This is in support of the COAI (Airtel, Vodafone etc).

Finance Ministry for more money in spectrum auction

Adding to this controversy, Sri Arvind Mayaram, the Secretary, Department of Economic Affairs in the Finance Ministry wrote a letter to the Department of Telecom suggesting that on expiry of the license period, not only the 900 MHz band, but also the 1800 MHz band spectrum should be taken back by the Government fully from the concerned telecom operators and both bands should be put up for auction and who ever is successful, will get these bands. No Company should be given the perpetual right to hold the spectrum in any band, whether in 900 or 1800 MHz. Therefore the Telecom Commission’s decision for taking away the 900 MHz band spectrum only while retaining the 1800 MHz band spectrum with the operators whose present license period expires, is not correct and should be reviewed. He debunked the argument that the replacement of the network built up for 900 MHz band spectrum with tne network for 1800 MHz band spectrum for those not able to get 900 MHz band spectrum in the auction will impose heavy cost. He told that in any case, due to constant technological upgradations, the networks are frequently replaced in telecom sector and hence there is no point in the argument regarding the cost of replacing the network for 900 MHz band with network for 1800 MHz band.

DoT dials TRAI for a solution

After getting bombarded with all these arguments and facing all these pressures, the DoT asked the TRAI to give its view afresh on various options regarding this process of refarming, including the issue whether any part of the spectrum can be allowed to be retained by the operator on expiry of the license period, for the next term of the license. DoT asked TRAI to give its view before the next meeting of the EGoM(Empowered Group of Ministers) where a decision has to be taken finally.

What about the fate of BSNL and MTNL

But what ever is the recommendation of the TRAI and the decision of the EGoM regarding private operators, it is necessary to allow spectrum in any band, whether 900 Mhz band or 1800 Mhz band, free of cost, without any payment, to BSNL and MTNL along with liberalization for the use of these spectrum bands, to provide 4G services or any service with any technology. Otherwise the BSNL and MTNL cannot survive by paying such huge amounts for spectrum. This is justified since the BSNL and MTNL, as PSUs are carrying out several social obligations, even by facing huge losses. For example, by maintaining the huge, but necessarily loss making landline network, the BSNL and MTNL are providing fixed wireline broadband services throughout the country and without them, the broadband services development to the present level would have been impossible, since the private operators are not interested in installing and maintaining pan India landline network for providing broadband services, since it is loss making. Also, the BSNL and MTNL are the “State” as per the Constitution and hence the State can exempt itself from such payments for spectrum, while imposing the payments on the privatee operators. The argument of level playing ground between the private operators and Public Sector Operators is not valid since the purpose of their existence is entirely different. The private operators are for profit whereas the PSUs are not merely for profit, they are there to serve the society even by incurring losses.

Nationalization real solution

Spectrum is a scare natural resource. There cannot be any real level playing ground in allotting the spectrum in view of the constantly changing technological upgradations since equality cannot be maintained in all respects in its allocation among the telecom operators. It will create serious struggles, corrupt practices, and preventing full usage of thee spectrum for the benefit of society. The only way for the full utilization for the benefit of society is to nationalize telecom services so that only the PSU operators are there with spectrum allotted to them free of cost by the Government, so that the services can be provided at less cost to the people.

29, అక్టోబర్ 2012, సోమవారం

Does the Left Have an Alternative?


There is a widespread view that the Left in India only criticize the policies of the Government, without showing any alternative. This needs to be discussed.

But what is the meaning of “alternative”? The policies followed at present by the Government of India are the policies required by the Indian capitalists lead by the big capitalists. To maintain their profits, in the present global situation, the Indian capitalists have to collaborate and integrate  more and more with the international finance capital. Hence the policies of the UPA Government (earlier the NDA Government) or the Government of any party or combination of parties representing the interests of the Indian capitalists will go in this direction only. This is the reason why the Manmohan Singh Government recently announced several decisions like allowing FDI in retail trade, increasing the prices of petrole, cooking gas etc, opening up of pension and insurance sectors to global finance capital etc. These decisions are for appeasing the international finance capital. It is needed because the Indian capitalists needed it for the sake of their profits. In this context, “alternative” means breaking away from this correlation between the Indian capitalists and the international finance capital. It is breaking away from this given situation. It is possible only with a struggle. It is not possible within the given situation. Therefore no real alternative is possible within the given situation, within the given relation existing between the Indian capitalists and the international finance capital.

But at the same time, the alternative proposed by the Left cannot be a call for socialism, for which the conditions are not yet ready. The balance of force between the ruling classes and the people are not yet ready for it. The conditions are yet to be built up. But at the same time the alternative cannot be simply accepting the broad requirements of the Indian capitalist classes and suggesting some minor changes in it. If the Left accepts the constraints of the ruling classes and then makes certain demands on that basis, it cannot be alternative; it can be only the replication of the policies of the ruling classes.

The alternative proposed by the Left in the present context cannot be for overthrowing the present system for establishing socialism. At the same time it cannot be within the purview of accepting the constraints of the Indian capitalists. It is some thing realisable with in the present system of society dominated by the capitalists and landlords, but at the same time not as per the present day requirements of the ruling classes (capitalists and landlords). It is a transitional demand, a demand that can be realised within the system, but only by means of a serious struggle against the ruling classes. It is a demand which people want and which the people believe to be capable of realisation.

What can be such a demand which is the real alternative, being proposed by the Left and which the people can accept as a credible programme? Does such a real alternative exist today and if so whether the Left are championing and struggling for it?

The answer is yes. The Left has been raising a number of demands over the last several months and these entire demands together amount to an alternative economic agenda. The Left is not simply rejecting the reforms of Manmohan Singh Government. They are also proposing the alternative. What it is?

The alternative proposed by the Left is creation of a mechanism for universal access to a set of basic minimum provisions to all citizens. The Left demanded universal access to food (on which it has carried out agitations), universal access to employment (with the left lead Governments taking initiative to introduce urban employment guarantee schemes), free and compulsory primary education, free and universal access to healthcare, old age pensions and care for the handicapped and disabled.

But all these demands are not the core demands of the Left’s alternative agenda where the main issues are radical land reforms and other fundamental changes. These demands for access to basic provisions are only the starting point of the alternative. There is already the public discussion on these demands related to the basic provisions of food, health, employment, education, pension etc. But the Government is desperately trying to waterdown the existing facilities regarding these basic provisions.

While the ruling classes (capitalists and landlords) and the Governments at the centre and the states representing their interests are going ahead with various measures for diluting the existing provisions regarding the basic amenities, the Left’s alternative starts with a fight for protecting and enhancing the provisions regarding basic necessities. The institutionalisation (making laws and creating institutions for their implementation) of universal access to food, education,. Employment, healthcare, old age security and care for the physically handicapped,  is realisable with in the present social system, although the ruling classes are against it.

A doubt may arise in this regard. If the ruling classes are against the institutionalization of the universal access to these provisions, then how the Manmohan Singh Government enacted MNREGA (law for providing employment in rural areas), introduced the RSVY (Rashtriya Swasthya Vikas Yojana), enacted the  right to education, and now  working out the food security legislation? Yes, the ruling classes are doing some thing regarding all these issues. But what is that? It is nothing but diluting even the existing measures, instead of making these provisions universally accessible.

Despite enactment of the Right to Education, a large proportion of children continue to be out of school, doing all sorts of menial jobs for their survival. The RSVY, instead of providing universal ccess to health care, is meant for siphoning the money of the Government to the private hospitals and insurance companies. Even the MNREGS (Rural employment guarantee scheme) which the UPA Government was forced to enact when it was dependent on the support of the Left, is now being diluted to a large extent making it a shadow of its former self. The fact is that the necessities of the ruling classes do not allow universal access to such provisions and if they are forced to introduce some limited measures, they also take steps to dismantle them as early as possible.

What is the cost of making the universal access to all citizens to the basic provisions of food, education, healthcare, employment and old age security? Whether the resources are available to meet this cost?

The cost of subsidy for  providing universal access to 35 kg of food grains to every family per month at Rs 2/- per kilo will be Rs 1,20,000 crore per year.

The cost of Universal Employment Guarantee Scheme will be Rs 80,000 crore per year.

The implementation of right to education making primary education compulsory and free to all will cost Rs 40,000 crore per year.

A comprehensive health care scheme for all will cost Rs 1,00,000 crore per year.

A universal old age pension scheme which provides a pension of Rs 2000 per month per person for around 8 crore beneficiaries will cost Rs 1,92,000 crore per year.

Altogether, the universal access to these five basic provisions will cost Rs 5,32,000 crore per year.

If the State support for the physically handicapped is also taken into account, the total expenditure will be Rs 6,00,000  crore per year. But already some expenditure is being incurred for food subsidy, Rural Employment Guarantee, Sarva Siksha Abhiyan etc and therefore the additional expenditure for institutionalising the  universal access to these five basic provisions and support to the physically handicapped  will be Rs 5,00,000 crore per year. This is 5 per cent of our GDP (Gross Domestic Product). An expenditure target of this magnitude is entirely realisable.

This Rs 5,00,000 crore per year required to provide universal access to food, education, employment, health care, old age pension and support to the physically disabled is not more than the concessions given to the rich and the corporate in the budget per year, in the last few budgets of the Central Government.

But it is not possible to give tax concessions to the rich to the extent of Rs 5,00,000 crore per year and also to provide universal access to the basic provisions at the cost of Rs 5,00,000 crore per year. If one is done, the other cannot be done. The neo-liberal policies required by the Indian capitalists and being implemented by the Government representing their interests are necessarily denying the universal provisioning of these basic necessities. On the other hand, these policies will impose more and more burdens on the people.

Therefore to get the Left’s alternative of implementing the universal provision of basic necessities, the neo-liberal policies favouring the rich and corporate are to be reversed. It is possible only through a struggle. If the path of the struggle is abandoned, the alternative will appear as   impracticable.

If these demands for universal provision of basic necessities are achieved either by compelling the ruling classes to accept for these demands or if the Left can implement them by the limited access to power that is allowed to it with in the present system, then more radical demands can be raised and struggles can be organised around such demands.

(This is a note prepared by me on the article “Does the Left have an Alternative” written by the well known Marxist economist Prabhat Patnaik and published in “Peoples’ Democracy” October 28, 2012 issue. For this article, see the website “pd.cpim.org”---P.Asokababu)