Msc business and management dissertation ankit yadav - 450148

PORTSMOUTH BUSINESS SCHOOL

MSC BUSINESS AND MANAGEMENT

Title: Irregularities performed by Indian Department of

Telecommunications in allocation of second generation

telecom licences in 2008.

Author: Ankit Yadav (450148)

Tutor: Mr. John Walton

Year of Submission: 2010/2011

Statement of Originality: This project is been submitted in partial

fulfilment of the requirements for the degree of MSC Business and Management. I,

the undersigned, declare that this project is my own work. Where I have taken ideas

and or workings from another source, this is explicitly referenced in the text.

Signed_______________________________________

Permission for the inter-library loan: I give permission that this

report may be photocopied and made available for the purpose of research.

Signed_______________________________________

2G Spectrum Scam Dissertation 2 Ankit Yadav – 450148

Acknowledgements:

The writing of this dissertation has been one of the most significant academic

challenge that I ever had to face. Without the support, patience and guidance of the

following people, this research would not have been possible. It is also them that I

owe my deepest gratitude to.

Senior Lecturer Mr. John Walton who undertook to act as my dissertation supervisor despite his other academic and professional commitments. His wisdom, knowledge and commitment to the highest standards inspired and motivated me.

A good friend and mentor Mrs. Ann Brierley and my parents who always

supported, encouraged and believed in me, in all of my endeavours let it be personal or professional.


Abstract:

In the last two decades the telecom sector in India witnessed rapid transformation

with the National Telecom Policy – 94 setting the stage for opening up of the sector.

With changes in the sector, cellular mobile services outgrew the fixed line services.

The most important change was the shift to a revenue sharing model in the National

Telecom Policy – 99 where the mobile service operators shared their revenues with

the government of India in the form of annual licence fee and spectrum charges. The

Unified Access Services Licence (UASL) 2003 sought to frame the road map for a

unified licensing regime.

In January 2008, Department of Telecommunications (DOT) issued 120 new

licences for unified access services on the same day. These licences were issued at

a price which had been discovered in 2001 has drawn the attention of Media,

Parliament of India and informed members of civil society. Questions have been

raised regarding the transparency in the allocation process and the failure in

maximisation of revenue generation from the allocation of spectrum, which is

considered to be a national asset. The flagship auditing agency of India Comptroller

and Auditor General of India (CAG) had been receiving innumerable complaints from

Members of Parliament and other sources repeatedly, questioning the allocation

process and the price fixed for such allocation. The claim in each reference was that

ineligible applicants seem to have been granted licences at a price which appeared

far below what has been perceived to be the appropriate market price in 2008. It was

in this context that the researcher of this dissertation felt that there was enough

justification to review the entire process of issuance of licences, award of licences,

award of spectrum and the implementation of the UASL model.


Table of Contents:

Acknowledgements: ................................................................................................... 2

Abstract: ..................................................................................................................... 3

List of Abbreviations: .................................................................................................. 7

List of Tables and Figures: ......................................................................................... 9

1.0 Objectives: ......................................................................................................... 10

2.0 Introduction: ....................................................................................................... 11

2.1 Overview of Telecom Policies Since 1994: ..................................................... 12

2.1.1 National Telecom Policy (NTP – 94): ....................................................... 12

2.1.2 National Telecom Policy (NTP – 99): ....................................................... 12

2.1.3 Unified Access Services Licence (UASL – 2003): .................................... 13

3.0 Literature Review ............................................................................................... 15

3.1 What are spectrum auctions? ......................................................................... 15

3.1.1 Multi – unit auctions: ................................................................................ 16

3.2 Second generation spectrum auctions in India: .............................................. 17

3.2.1 Service areas (or circles):......................................................................... 17

3.2.2 Entry conditions: ....................................................................................... 18

3.2.3 Auction Results: ....................................................................................... 18

3.3 Flawed arguments against auctions: .............................................................. 18

3.4 Third generation spectrum auction in India and UK: ....................................... 19

3.4.1 UK third generation spectrum auction: ..................................................... 19

3.4.2 India third generation spectrum auction: .................................................. 21


3.5 Financial impact of second generation spectrum scam in India: ..................... 24

3.5.1 Under pricing of second generation spectrum and consequent loss: ....... 25

3.6 Procedures adopted in issuance of UASL and allotment of spectrum: ........... 29

3.6.1 Undue haste in receiving and processing of applications: ........................ 30

3.6.2 Multiple activities on 10th January 2008: .................................................. 31

3.6.3 Three applicants provided pre-dated bankers drafts: ............................... 32

3.6.4 FCFS policy of DOT was not followed in full spirit: ................................... 32

3.6.5 How the sanctity of DOT‟s FCFS policy violated: ..................................... 33

3.6.6 Access to dual technology:....................................................................... 33

3.7 Implementation of Unified Access Services Model: ........................................ 35

3.7.1 Gaps in implementation of UAS model: ................................................... 35

3.8 Acts of corruption: ........................................................................................... 37

4.0 Research Design and Methodology: .................................................................. 38

4.1 Introduction: .................................................................................................... 38

4.2 Research Approach: Selection and Justification of Methods Used: ................ 38

4.3 Case Study Approach: .................................................................................... 39

4.4 Sampling: ........................................................................................................ 40

4.5 Questionnaires: ............................................................................................... 41

4.6 Methodology Reviewed: ................................................................................. 42

4.7 Technical and Ethical Issues: ......................................................................... 42

4.7.1 Technical Issues: ..................................................................................... 42

4.7.2 Ethical issues: .......................................................................................... 43


4.8 Secondary Research: ..................................................................................... 43

5.0 Results and Findings: ..................................................................................... 45

6.0 Conclusion: ........................................................................................................ 55

7.0 Recommendations: ........................................................................................ 58

References: .............................................................................................................. 60

Appendices: ............................................................................................................. 66

Appendix One: Pre-dated Bankers Drafts: ............................................................ 66

Appendix Two: Press Release by DOT on 10th January 2008: ............................. 67

Appendix Three: Financial Bank Guarantee (FBG): ............................................. 68

Appendix Four: Ethics Approval Form: ................................................................. 69

Appendix Five: Questionnaire Structure: .............................................................. 74

Appendix Six: E-Mail Questionnaire Covering Letter: ........................................... 77

Copy of E-mail sent to sample on 19th August 2011: ........................................ 78

Appendix Seven: Primary Data Tables: ................................................................ 80

General Information Section: ............................................................................ 80

Raw Survey Data: From Q1 – Q5: .................................................................... 84

Raw Survey Data: From Q6 – Q10: .................................................................. 88

Appendix Eight: Time Line: ................................................................................... 93

Appendix Nine: Filled Out Questionnaires: ........................................................... 94


List of Abbreviations:

AGR – Adjusted Gross Revenue

BSO – Basic Service Operators

BWA – Broadband Wireless Access

CAG – Comptroller and Auditor General of India

CDMA – Code Division Multiple Access

CEO – Chief Executive Officer

CMSO – Cellular Mobile Service Operators

DOT – Department of Telecommunication

EGOM – Empowered Group of Ministers

FCFS – First Come First Serve

GOM – Group of Ministers

GSM – Global Subscriber Mobile

LOI – Letter of Intent

MOC & IT – Ministry of Communications and Information Technology

MHZ – Mega Hertz

NTP – National Telecom Policy

One Crore – Ten Million Rupees

One GBP – Seventy Two Rupees

TCI – Telecom Commission of India

TRAI – Telecom Regulatory Authority of India

UAS – Unified Access Services


UKRCA – United Kingdom Radio Communication Agency

ULM – Unified Licensing Model

SUC – Spectrum Usage Charges

2G – Second Generation

3G – Third Generation

` - Rupee Currency Symbol

* India is divided into 22 service areas or circles

** In January 2008, DOT issued 122 (LOIs) against which only 120 licences were

issued. Two more licences were issued in July 2008.


List of Tables and Figures:

Tables:

Table 1 UK third generation spectrum auction format

Table 2 UK third generation spectrum auction winners and winning bids

Table 3 India‟s third generation spectrum auction winners and winning bids

Table 4 Telecom operators which attracted Foreign Direct Investment

Table 5 Procedure for the issuance of UASL

Figures:

Figure 1 Growth of telecom network (wireless and wire line) in India

Figure 2 Revenue of account of spectrum charges and licence fee

Figure 3 A dynamic auction scenario


1.0 Objectives:

This dissertation has three core objectives:

Whether the policy for the issuance of licences under the Unified Access

Services Licence (UASL) scheme was implemented effectively;

Whether the Unified Access Services Licence (UASL) and the radio

spectrum was allocated in a fair, transparent and efficient manner and;

Whether the potential for revenue maximisation for government of India

was optimally utilised by Department of Telecommunication (DOT).


2.0 Introduction:

In the last two decades, the Indian economy has emerged as one of the fastest

growing telecom market in the world. Till 1994 the Department of Telecommunication

(DOT) provided the telecommunications facilities in India. In late 1994 the National

Telecom Policy (NTP) was formulated and this allowed private companies to enter

the telecommunication business in India. The total number of subscribers stands at

787.28 million (wireless subscribers 752.19 million which is up by 9.38 percent from

the previous quarter and wire line subscribers 35.09 million which is down by -1.34

percent from the previous quarter) as of 31st December 2010, making India the

second largest telecom market in the world after China (TRAI, 2011).

The following graph below shows the telecom sector growth since 2003:

Figure 1: Growth of Telecom Network (Wireless and Wire line)

(Source: TRAI – Performance Indicators Report, 2011)


2.1 Overview of Telecom Policies Since 1994:

2.1.1 National Telecom Policy (NTP – 94):

It was in 1994 when the first National Telecom Policy (NTP – 94) was announced by

the government of India with following objectives in mind: providing

telecommunications services to all i.e. ensuring the availability of telephone on

demand as early as possible, providing universal service covering all remote villages

as soon as possible, the quality of telecom services should be of world standard,

also considering India‟s size and making sure that India in the long run emerges as a

major manufacturing hub and exporter of telecom equipment, and finally the defence

and security interests of the country should be protected (DOT, 2002).

2.1.2 National Telecom Policy (NTP – 99):

In 1999 a new telecom policy was announced, the main driver for this new policy

was that some of the objectives of NTP – 94 remained unachieved and also there

were several far reaching developments in the telecom, IT, consumer electronics

and media industries world-wide since the last policy came into force. The main

objectives of NTP-99 were firstly, creating a modern and efficient

telecommunications infrastructure taking into account the convergence of IT, media,

telecom and consumer electronics and therefore propelling India into becoming an IT

superpower. Secondly, providing telecom services on demand by 2002 and

sustaining it thereafter so as to achieve a tele-density of seven percent by 2005 and

fifteen percent by 2010. Thirdly, the new policy also aimed to lift restrictions on the

number of telecom service providers for the Basic Service Operators (BSOs) and

Cellular Mobile Service Operators (CMSOs) as well, as long as they satisfied the

conditions laid by DOT. Lastly and the most important objective of NTP – 99 was to

migrate all the operators who were operating under fixed licence fee model to a

revenue sharing model. In this new model operators were required to pay a

percentage of their Adjusted Gross Revenue (AGR) as annual licence and Spectrum

Usage Charge (SUC) to the government of India. The percentage of revenue sharing

was different for every circle (or service area)* for telecom operators where they

operated. The following graph provides an insight of revenues (AGR and SUC)

generated by DOT since 2003 (DOT, 2003).


Figure 2: Revenue of account of Spectrum Charges and Licence Fee

2.1.3 Unified Access Services Licence (UASL – 2003):

In 2003, Empowered Group of Ministers (EGOM) approved the recommendations

submitted by Telecom Regulatory Authority of India (TRAI). TRAI on 27th Oct 2003,

suggested that technological developments are rendering service based division of

telecommunications redundant, increasingly the services provided under one licence

can also be provided under another licence due to such developments (TRAI, 2003).

According to TRAI the consequences of this are that even before a telecom service

provider has fully realised his/her investment his primary business activity is

threatened or made irrelevant due to technological developments in other areas,

enabling the other licence holder to overlap with the first one (TRAI, 2003). This

further leads to disputes and often litigation between the service provider and

Government of India, claims are made on Government to provide compensation and

TRAI further suggests that there is no justification in continuing a service wise

licensing model where fast changing technologies will invariably place burdens on

the Government of India in the future. In TRAI‟s 2003 recommendations, the key

recommendation is that the present licensing model should be replaced by a unified

model for all services and geographical areas using any technology and leaving it for


the service provider to use the best technology at all times (TRAI, 2003). EGOM on

11th Nov 2003 accepted all of the TRAI‟s recommendations and all further licences

were issued under Unified Access Services Licences (UASL) model.

In April 2007 the government of India again sought recommendations, as per the

provisions of TRAI Act. The Government wanted recommendations on the issue of

determining the number of access providers in each service area and a review of the

terms and conditions in the access provider licence (TRAI, 2007). In response TRAI

on 28th Aug 2007 recommended; firstly, that no cap can be placed on the number of

service providers in any service area. Secondly, DOT should examine the issue early

and specify appropriate licence fee for Unified Access Licence (UAS) licensees who

do not wish to utilise the spectrum. And finally, in order to frame new spectrum

allocation criteria, a multi-disciplinary committee may be constituted, this committee

may be headed by an eminent scientist/technologist from a national level scientific

institute like the Indian Institute of Sciences, Bangalore (TRAI, 2007). TRAI also

suggested if a licensee wants to use dual technology (Code Division Multiple Access

(CDMA) and Global Subscriber Mobile (GSM)), he/she can go ahead in doing so,

provided that such licensee pays the same amount of fee which has been paid by

the existing licensees using the dual technology or which would be paid by the new

licensee going to use either CDMA or GSM (TRAI, 2007). In 2007-2008 thirty five

licensees were allowed to use dual spectrum and were also allocated spectrum

(CAG, 2011).


3.0 Literature Review

3.1 What are spectrum auctions?

Reliable and efficient spectrum access is vital for the growth and innovation of

wireless technologies. Unfortunately, historical and current spectrum regulations

assign different technologies with static spectrum in long-term leases to prevent

interference among them. Overtime, this has led to under-utilisation of spectrum,

slowing down wireless deployments. To realise efficient spectrum usage, it is

necessary to migrate from the current static spectrum access to dynamic spectrum

access (Gandhi, S, Buragohain, C, Cao, L, Zheng, H and Suri, S, 2007).

One promising solution is spectrum trading that applies priced based incentives to

stimulate users to sell and lease under-utilised spectrum. One particular form of

trading is auctions, widely known for providing efficient allocation of scarce resources

(Borenstein, S, 2002). Sellers use auction to improve revenue by dynamically pricing

based on buyer demands. Buyers benefit since auctions assign resources to buyers

who value them the most. Hence, many systems use auction based allocation

models, including energy markets, treasury bonds and commercial goods

(Borenstein, S, 2002 and Binmore, K. and Swierzbinski, J, 2000).

Figure 3: A dynamic auction scenario

(Source: Gandhi, S. et al, 2007. A General Framework for Wireless Spectrum Auctions)

(Left) An auctioneer performs periodic auctions of spectrum to buyers. (Right) A

conflict graph illustrates the interference constraints among buyers. Figure 3


illustrates a general spectrum scenario where n buyers (wireless service providers)

bid for spectrum from a seller (government agencies or spectrum owners) who

auction its spectrum periodically, i.e. every hour (Gandhi, S. et al, 2007).

3.1.1 Multi – unit auctions:

Though auctions have been used widely to provide efficient allocation of scarce

resources, including the sale of single item indivisible goods (e.g. a painting), single

items in multi-unit bundles and multi-unit bundles (e.g. bonds) (Vries, D., and Vohra,

R, 2003 and Sandholm, T. and Suri, S, 2001), but a successful auction system must

not only produce financial efficiency, but also provide an efficient bidding process

and fast execution (Krishana, V, 2002).

Given bids, auctioneers use auction-clearing algorithms to compute the revenue-

maximising prices and auctions. Clearing is simple in single-item single-unit

auctions: assign the item to bidders with the highest bid. However, auctioning multi-

unit items can be much more complex since the multiple winners split the items. The

complexity of clearing algorithms also depends on the complexity of bidding

language (Sandholm, T. and Suri, S, 2001 and Gandhi, S. et al, 2007).

Multi-unit auctions have two pricing models:

Uniform pricing: The auctioneer determines a price unit and applies it to all

winning bidders. The auction clearing problem here is to determine a market

clearing price that maximises the auctioneer‟s revenue. EBay multi-unit

auctions have been using this model (EBay, 2011).

Discriminatory pricing: The auctioneer charges different prices to different

bidders. While producing higher financial revenue, this model is also

perceived as less “fair” to bidders than the uniform pricing model (Gandhi, S.

et al, 2007). The various issues that arise in uniform pricing versus

discriminatory pricing models have been studied in diverse markets such as

US treasury security auction (Malvey, P. and Archibald, C, 2011), government

bond auctions in UK (Binmore, K. et al, 2000), and electricity auctions in

California (Borenstein, S, 2002 and Hudson, R, 2001). For one time auctions,

discriminatory pricing always generates more revenue. On the other hand

uniform pricing is simple, and provides “fairness” to bidders and promotes

aggressive bidding (Malvey, P.et al, 2011). However, uniform pricing is

suspected to create collusion among the bidders (Bourjade, S, 2006) and for


unsettled market, it might be more dangerous with respect to the amount of

revenue it generates (Malvey, P.et al, 2011). Because of these complex

factors, it is best to leave the choice of pricing model to auctioneers as they

are the experts in this field.

3.2 Second generation spectrum auctions in India:

In the early 1990s when private initiatives started to rise in telecom and broadcast

services, demand for spectrum increased. Digital technology helped to increase the

scope of applications and created new areas of service provision. Mobile phones

and wireless internet access are examples of such services, despite the

technological changes which reduce the demand for spectrum; there is still serious

scarcity of spectrum (Jain, 2001). To overcome this problem and allocate spectrum

amongst competing service providers, governments and regulatory agencies around

the world often use auctions. From the perspective of regulatory agencies, spectrum

auction ensures efficient usage by allocating it to those companies or service

providers which value it most; this also generates enormous revenues for the

governments. But if the auctions are poorly designed and executed they can also

lead to unexpected outcomes, for example, when the policy makers and regulatory

agencies get the key information wrong like inadequate market knowledge and a gap

between the actual behaviour and expected behaviour of the bidder (Jain, 2001).

Therefore regulatory agencies and policy makers around the world face a question;

how to design an auction that meets the objectives, like fostering competition so the

consumers can benefit and also at the same time ensuring that the winning bidders

can use the spectrum effectively for their business (Jain, 2001).

3.2.1 Service areas (or circles):

Firstly the telecom licences were auctioned for basic and cellular services from 1991

by the DOT, the incumbent government policy maker, regulator and service provider.

India was divided in twenty two circles (or service areas), which are characterised as

A, B and C depending on their revenue potential. DOT decided to have two

operators per service area for cellular services and for basic services there would be

one more operator besides DOT in each of the service area (Jain, 2001).


3.2.2 Entry conditions:

In order to gain entry into the bidding process, potential service providers were

required to collaborate with foreign partners, as DOT and the government of India

felt that none of the Indian companies had the requisite financial resources and

technical capabilities. Bidding was a two stage process for all the licences, the first

stage was a pre-qualification bid based on the financial net worth (this was linked

with the category of circle (or service area) A, B or C and the type of the service

provision) and also experience in the service provision and the second stage

involved the evaluation of bids (Jain, 2001).

3.2.3 Auction Results:

Before the bidding started, there was no cap on the number of circles that could be

awarded to a single bidder. It was only when it was found that a single company has

won licences in nine circles and had ended up bidding very high. Straight away there

were doubts about this company‟s ability to pay the licence fee in all the circles (or

service areas); if those licences would have been awarded then the payment

requirement would have been $15 billion over 15 years while the annual turnover of

that company was only $0.06 billion. The DOT and government of India allowed the

winning bidder to choose three circles as it was apparent that by awarding all nine

circles to a single company, it would be replacing public monopoly by a private one

(Jain, 2001).

3.3 Flawed arguments against auctions:

According to McMillan (1995) and Binmore (2001), some flawed arguments against

spectrum auction crop up every now and then. These arguments appear to be

standard and could come from every country‟s spectrum regulators. First one of

them claims that auctions eliminates the discretion in the selection process and

diminishes their capabilities as spectrum managers. Second claim says that the

concept of owning spectrum is not consistent with the principle of leasing and can

lead to problems if decisions are subsequently made to recover and reallocate the

spectrum (McMillan, 1995). The third argument considers that the auctions are unfair


to companies who are forced to bid. It is true that existing operators are forced to bid

for new licences or value of their previous investment might fall sharply (Binmore and

Klemperer, 2001). According to Binmore and Klemperer (2001), none of the

spectrum auctions around the world have seen fewer licences than incumbents, so

the prices were set by the marginal bidders – new entrants who have nothing to lose

if they failed to win a licence. Further building on this point in India, UK, Germany,

Italy and elsewhere, some of the new spectrum licences were won by companies

who had no previous experience and presence in those markets, this proved that

companies who were under no pressure saw the risk worth taking (Binmore and

Klemperer, 2001). Indeed in India, several of the licences winners sold minority

stakes to foreign investors for a profit even though they did not have a single

subscriber (see table four). Fourth, common misconception about the auctions

seems to be that companies investment costs to obtain a spectrum licence will be

passed on to the consumers in form of higher charges. This argument might be

partly true where companies have bid for royalties, but this argument is generally

mistaken in an auction in which companies make one time lump sum payments. Like

any other company, telecom companies will charge the prices that will maximise

their profits, independently of what they have paid for the spectrum in the past

(Binmore and Klemperer, 2001). Lastly, the final misconception regarding spectrum

auctions is that large auctions fees may slow investment because of the capital

market constraints, this argument might be true theoretically, but it is very unlikely

that very many highly profitable investments are being forgone because of the

difficulty raising the funding for them (Binmore and Klemperer, 2001).

3.4 Third generation spectrum auction in India and UK:

3.4.1 UK third generation spectrum auction:

In April, 2000, the United Kingdom Radio Communications Agency (UKRCA)

completed its first spectrum auction which raised around £22.5 billion for five 3G

mobile licences (Cramton, 2001). The overall aim of the United Kingdom government

was “to secure the long term benefit of United Kingdom customers and the national


economy, the timely and economically advantageous development and sustained

provision of 3G services in United Kingdom” (Ofcom, 2001).

Table 1: UK third generation spectrum auction format:

Licence Category A B C D E

Paired Spectrum 2 x 15

MHZ

2 x 15

MHZ

2 x 10

MHZ

2 x 10

MHZ

2 X 10

MHZ

Unpaired Spectrum 5 MHZ 0 MHZ 5 MHZ 5 MHZ 5 MHZ

Total 35 MHZ 30 MHZ 25 MHZ 25 MHZ 25 MHZ

(Source: Crampton, 2001. Lessons Learned from the UK 3G Spectrum Auction)

Table 1 illustrates the UK third generation (3G) spectrum auction format, which

shows the number of licences and amount of bandwidth available with each licence.

Licence A was set aside for the new entrant in the market and all of the bidders

could bid on any of the remaining licences (B to E), these licences were valid for

twenty years (Crampton, 2001). There were several important details which were

attached with auctions like, spectrum cap where a company (or associated

companies) could only win one licence; this guaranteed that there would be five

distinct companies for the provision of 3G services. Deposits potential bidders were

asked to deposit an initial deposit of £50 million to enter the bidding, this deposit was

further increased to another £50 million when the bid exceeded £400 million, and this

deposit was fully refundable if the bidder lost the bidding. Payment winning bidders

were given option to either pay in full after the auction or they could choose to pay in

instalments (Cramton, 2001).

The UK 3G auction which started in March 2000 and ended in April 2000, the auction

comprised of over 150 rounds and seven weeks of bidding. There were thirteen

companies which competed for five licences, the UK 3G auction was the largest

auction to date, raising just over £22.5 billion in revenues (Ofcom, 2001). This


amount surpassed the total revenues generated by the all of the US spectrum

auctions, which is quite remarkable given that the US is at least 4.5 times the size of

the UK market see table 2 (Cramton, 2001).

Table 2: UK 3G spectrum auction winners and winning bids:

Licence Paired

Spectrum

Unpaired

Spectrum

Winning

Bidders

Price Bid (£

million)

£

million/MHZ

A 2 X 15 5 T-Mobile £4,385 £125.29

B 2 X 15 0 Vodafone £5,964 £198.80

C 2 X 10 5 BT £4,030 £161.20

D 2 X 10 5 Three £4,004 £160.16

E 2 X 10 5 Orange £4,095 £163.80

(Source: Crampton, 2001. Lessons Learned from the UK 3G Spectrum Auction)

The prices of licences exceeded everyone‟s expectations let it be government,

industry observers, bidders and taxpayers as well. There is no question that the 3G

auction was a success in terms of generating revenues for the United Kingdom

government (Cramton, 2001).

3.4.2 India third generation spectrum auction:

After coming under much criticism for its spectrum allocation policies with Second

Generation (2G) spectrum, the government of India decided to take the auction route

for Third Generation (3G) and Broadband Wireless Access (BWA) spectrum. On 09th

April 2010, DOT commenced the e-auction of spectrum licences 3G services, and

soon to follow broadband wireless spectrum auction. The auction involved three or

four blocks of 3G spectrum and two blocks of BWA spectrum in twenty two service


areas or circles. According to the DOT the primary objectives for the auction were to

award spectrum transparently and fairly, promote efficient use of spectrum which will

stimulate competition and encourage roll-out and lastly the auction will generate

maximum revenue for the Indian exchequer which was the biggest loser in 2G

spectrum allocation which was carried out on a First Come First Serve (FCFS) basis

and on a price which was determined in 2001.

Every auction for the 3G spectrum in India‟s twenty two telecom circles was carried

out separately but as a simultaneous process and the process was conducted over

the internet. Selected bidders were provided authentication tokens and passwords to

access the e-auction website from their own computers (Tirpathy, 2010). In this e-

auction process the names of the bidders were not disclosed during the auction, only

the total numbers of applicants were known. The e-auction comprised of multiple

rounds and at the end of the each round provisional winners were declared.

Rothschild and DotEcon, the auctioneers announced higher prices for every round

and then looked for demand at that price (DOT, 2010). If for a service area where

there were three slots available and at least six bidders, then the price increment

was 10 percent, if there were five bidders for three slots, then the price increment

was 5 percent and for four bidders for three slots the price increment was 1 percent,

these measure were taken to prevent cartelisation (DOT, 2010).

The initial money deposited (as per DOT guidelines) by the bidder determined its

eligibility to bid in the first round, each round earned the eligibility points for the

bidder to participate in successive rounds. Only valid bids based on eligibility points

were accepted. At the end of the e-auction, bidders were notified of the provisional

outcome on a confidential basis. The government had to approve the results before

they were made public (Tirpathy, 2010). The winning bids for 3G spectrum were `

67,710 crore (£ 9.40 billion, at ` 72 to a pound), which by far exceeded the

government‟s original expectation of ` 35,000 crore (£ 4.86 billion) (Wharton, 2010).

It was on day 20 of the 3G auction when the auction price of 3G airwaves for mobile

telephony crossed the ` 1,658 crore (£ 230.28 million) mark in Mumbai and New

Delhi alone – this was the price at which new operators were given licences

nationally in 2008 (Ghosh, 2010).


Former telecom minister A. Raja faced severe criticism and was sacked by

Honourable Prime Minister in November 2010 for allocating 2G spectrum in

2008 at a price which was discovered in 2001. A. Raja faces accusations of

causing a loss of ` 1 trillion to the Indian exchequer by following an FCFS

policy instead of auction policy as recommended by TRAI in 2007 (Ghosh,

2010).

After a successful auction carried for third generation spectrum, DOT released the

list of successful bidders which outlined the number of circle (or services areas) won

by the bidder, winning bids and the amount of money to be paid to DOT before any

licence can issued. Table 3 illustrates the auction results for the third generation

spectrum auction in India.

Table 3: India’s third generation spectrum auction winners and winning bids:

Winning Bidder Service

Areas

Price £ million Price £ million/service area

Bharti Airtel 13 £1,707.70 £131.36

Vodafone Essar 9 £1,613.59 £179.28

Reliance Telecom 13 £1,192.36 £91.72

Tata Teleservices 9 £814.48 £90.49

Idea Cellular 11 £801.19 £72.83

Aircel Limited 13 £902.70 £69.43

S Tel Limited 3 £46.89 £15.63

BSNL 20 £1,414.80 £70.74

MTNL 2 £911.67 £455.84

Total 93 £10,125.38 _______________________

(Source: DOT, 2010. 3G Auction Update on Payment Methodology)


3.5 Financial impact of second generation spectrum scam in India:

The pan India entry fee for a UASL was fixed at ` 1,658 crore (£ 230.28 million) this

price is the same as the price captured from the market for a CMSL in 2001. In 2003

DOT took the decision to adopt this price with a view not to delay the implementation

of UASL. It is quite clear from the bidding pattern which was followed in 2001 that the

2001 price was discovered in a nascent market and considering the revolutionary

changes in the Indian telecom market since then, there is no doubt in concluding that

the same 2001 price did not reflect the economic value of a licence in 2008 (CAG,

2010).

There are two issues which can help explain this further:

It was in 2003 when EGOM took the decision to make UASL only an

instrument to enter the telecom business for providing cellular and other

mobile services irrespective of the technology used for the purpose of service

delivery. There are different spectrums that make use of different technology

which is then used to provide different kinds of telecom services and that‟s

why 2003 UASL policy was formulated, in the second phase of 2003 UASL

implementation, was particularly directed towards disassociating the licence

from the type of service that the service provider intends to provide (CAG,

2010). So this means that once a service provider has obtained the licence or

the authorisation to provide the telecom services he/she can approach DOT

and obtain the spectrum required for the services he/she intends to provide

and the spectrum could be obtained either through paying its auction price or

any other arrangement decided by DOT or any other independent regulatory

agency appointed by the government for this matter (CAG, 2010). As the

policy was not reviewed for over four years, the issue of delinking the entry

fee from the price for the use of spectrum remained unaddressed. It was in

August 2007, when TRAI recommended to the government that 2G spectrum

should not be auctioned and mentioned “in today’s dynamism and

unprecedented growth of telecom sector in India, the entry fee which was set

in 2001 is also not the realistic price for obtaining a licence either”. As there

was no price discovery for the 2G spectrum separately, the entry fee of 2001

was taken as the entry fee for 2003 UASL (TRAI, 2007).

In the process of ascertaining any loss while trying to come up with a value of

the spectrum in hindsight is only presumptive, the reason for this that there

are varied factors like its scarcity value, the nature and intensity of

competition, business plans proposed by bidders, time of entry, economic


growth of the country and industry, purchasing power of consumers, etc.,

which in a market condition, would throw up the actual prices at a given time

(CAG, 2010). When Dot was trying to fix the entry auction reserve price for 3G

spectrum it correctly observed that “the key determinants of spectrum value in

a competitive auction (where demand is always more than supply) are the

level of competition in the auction and the attractiveness of the business plan

for using the spectrum” (DOT, 2010). That‟s why instead of trying to come up

with a specific value of 2G spectrum which could only be possible through the

market price discovery involving the demand and supply position and the

attractiveness of business plan for using the spectrum in future, the

researcher has looked at various indicators to assess a possible

(presumptive) value, from the various records available publicly rather than

going for any mathematical/econometric models.

3.5.1 Under pricing of second generation spectrum and consequent loss:

3.5.1.1 UASL applicant offered higher price:

Interestingly, S TEL Limited, who had also applied for UASL in September 2007, in

its communication to the Prime Minister voluntarily offered to pay an additional share

of ` 6,000 crore (£ 833.34 million) to the DOT for a pan India licence over and above

the spectrum charge which is ` 1,658 crore (£ 230.28 million) payable as per the

exciting policy (Joshi, 2011). That‟s not all S TEL limited revised its previous offer

from ` 6,000 crore (£ 833.34 million) to ` 13,752 crore (£ 1.91 billion) in December

also wrote to DOT and also further agreed to increase its bid price in event of any

counter bid or auction of spectrum for GSM on a pan India basis (Joshi, 2011).

If the price offered by S TEL Limited is used as an indicator to determine the market

valuation of the 2G spectrum, value for all 122 new licences and 35 dual technology

licences work out to ` 65,909 crore (£ 9.15 billion) as against ` 12,386 crore (£ 1.72

billion) actually received by the DOT in 2008 (Joshi, 2011). It is quite clear from the

above argument if an open process of bidding or auction was used for the price

discovery of 2G spectrum and hasty and abrupt changes in deadlines and dates

were not made, then the DOT would have been able to raise much more revenue for

the government.

In January, 2011 Communications and IT Minister Kapil Sibal in a press meeting in

New Delhi, said that S TEL Limited had attached conditions to their offer which were


not acceptable to the government, moreover, S TEL limited withdrew their offer in the

supreme court of India and that‟s why there was no loss to the Indian exchequer

(Joshi, 2011). The contention of Mr. Sibal is not correct as the S TEL Limited had

withdrawn their offer in March 2010 i.e. after more than two years, it is only when the

ground realities in the Indian telecom sector has changed drastically and S TEL

Limited‟s competitors were already awarded the UASL in 2008 which allowed them

enough time to build the required infrastructure to roll out services which led S TEL

limited to withdraw its offer (Joshi, 2011). The researcher has only used offers made

by S TEL Limited in this research as an indicator of market value of the 2G

spectrum, if these offers would have been accepted by DOT the revenue generated

for the government for the 2G spectrum could have been quite substantial.

3.5.1.2 Value of second generation spectrum on the basis of price discovered

for third generation spectrum through auction in 2010:

In September 2006 TRAI submitted its recommendations to the government of India

in which TRAI had recommended a reserve price for one licence of 2 x 5 MHz 3G

spectrum pan India licence at ` 1,010 crore (£ 140.28 million) but later in the same

month the EGOM was formed to look at 3G spectrum issues revised the reserve

price to ` 3,500 crore (£ 486.12 million) (TRAI, 2006). In 2010 TRAI submitted it‟s

other recommendations report to government in which TRAI observed that current

2G service providers are actually offering 2.75G services. Therefore CAG in its audit

report in 2010 concluded “while comparing spectral efficiency and other factors, it is

fair to compare existing 2.75G systems with 3G systems”. So in order to calculate

the total loss to the Indian exchequer, the researcher has chosen to adopt the

current 3G spectrum licences prices.

As the researcher calculates the 2G spectrum prices at 3G rates which can also be

taken as one of the indicators for assessing the value of 2G spectrum allocated to

UASL in 2008, the total value works to ` 1,11,512 crore (£ 15.48 billion) as against `

9,014 crore (£ 1.25 billion) realised by DOT in 2008. It is the same case with the dual

technology licences as well, if the 2G licences were issued at 3G prices then the

value would have worked out to ` 40,526 crore (£ 5.62 billion), as against ` 3,372


crore (£ 468.34 million) collected by DOT in 2007-08. The total difference works out

to ` 1,39,652 crore (£ 19.39 billion).

The researcher again reiterates that the original value of 2G spectrum could only

have been obtained through the market drawn process and as it was not carried out

by DOT, the researcher has used the indicators available which provide hints

towards the loss that Indian exchequer would have suffered. The revenues

generated through the 3G auctions is mentioned earlier in this research and this also

shows the benefits of resorting to an open price discovery process and the value that

spectrum can command without compromising the policy of open competition.

3.5.1.3 Sale of equity by UASL holder firms at a higher value:

According to DOT guidelines on UASL, the total Foreign Direct Investment (FDI) by

the investing company should not go beyond 74 percent. This 74 percent FDI can be

either made directly or indirectly in the operating company or it can be done through

an holding company (49 percent FDI is automatic and beyond 49 percent the

investing company has take approval from the Foreign Investment Promotion Board

–FIPB) and rest of the 26 percent is to be owned by an resident Indian citizens or

Indian Company (Incorporated under Company‟s Act 1956) (DOT, 2010).

Table 4 illustrates the list made public by DOT, there were several UASL holders

including the new entrants, which were able to attract huge amount of FDI in the

recent years (specifically since January 2008).

Table 4: Telecom operators which attracted Foreign Direct Investment (FDI):

S.No Name of the Operator Percentage of equity

sold

Value of equity sold

in £ million

1 Swan Telecom 50% £499.65

2 S Tel Limited 5.61% £33.12

3 Unitech Wireless 67.25% £850.00

4 Tata Teleservices 27.31% £1,795.00


5 Tata Teleservices

Maharashtra

20.25% £131.80

6 Sistema Shyam Teleservices

Limited

63.71% £452.91

(Source: CAG Audit Report, 2010)

Three companies Swan Telecom, S Tel Limited and Unitech Wireless are the new

entrants to the telecom sector in India. It is quite astonishing to see that these new

entrants could attract such huge amounts of FDI, even before putting the

infrastructure in place and rolling out services to consumers would force any industry

or sector observer to strongly question the motives of these companies, were these

companies just acquiring the UASL to attract the FDI and this could FDI be used in

other group companies of these parent companies (PTI, 2011). Further building on

this fact of attracting huge amounts of FDI and motives behind them, particularly

Unietch Wireless‟s parent company Unitech Group (this parent company is a real

estate major in Indian housing market), in financial year 2007-08 Unitech Group had

a debt of ` 8,000 crore (£ 1.12 billion) and its share price was down 92 percent

since January 2008 and according to investment bank BNP Paribas “the company’s

interest coverage ratio (EBITDA/Gross Interest) remains dangerously high at 2.2X

declining to 1.9X by FY10” (Stanley, Kalesh and Hussian, 2008).

According to CAG 2010 audit report, Unitech Wireless wrote to DOT in November

2008 that Telenor of Norway has approached them for purchasing a stake in the

company and stressing the point that Unitech Wireless has put about six months of

effort and around ` 2,100 crore (£ 291.67 million) in to the company and the

company‟s value was just not just based on only on the 2G spectrum that it acquired

earlier in the year (PTI, 2011). But CAG in its audit report emphasised an important

point that Telenor of Norway is an international experienced company which has

interests in telecommunications, data and media communications services and it is

also Norway‟s largest company with the government having a controlling stake of 54

percent and what Telenor would have required to start offering telecom services was

primarily access to a UASL. So considering Telenor‟s trained manpower strength in

12 countries, its long standing technical expertise and international experience of


dealing in telecom business, it can be convincingly concluded that, the high value

paid by Telenor to Unitech Wireless was primarily for the spectrum and not for other

inputs claimed to have been infused by Unitech Wireless (CAG, 2010). So the huge

value which should have gone to the Indian exchequer went as a favour to the new

UASL holders in the form huge of FDI infusion for enriching their other businesses.

3.6 Procedures adopted in issuance of UASL and allotment of

spectrum:

Table 5: Procedure for issuance of licences:

Receipt of Application Applications are received in central registry and

application date is recorded for making priority list.

Enclosures include requisite processing fee.

Processing of

Application

Scrutiny of applications based on the criteria contained in

the guidelines.

Final priority list of eligible applicants is drawn up.

Issuance of LOI LOI to be issued in 30 days by post to eligible applicants.

Compliance of LOI

conditions

Compliance to LOI conditions within 15 days from the

date of issue of LOI.

Payment of one-time entry fee.

Submission of Performance Bank Guarantee (PBG) and

Financial Bank Guarantee (FBG) by the applicant.

Issuance of Licence Signing of UASL licence agreement.

Licensee becomes eligible to apply for wireless licence.

Application for

Spectrum

Application of wireless licence.

Allocation of spectrum on FCFS basis.

(Source: CAG Audit Report, 2010)


As a result of gaps left in the implementation of the UASL 2003 policy it led to a

situation where on one hand the allocation of the spectrum was not de-linked from

the licences and on the other hand applications for the new licences were continued

to be received by the DOT without even framing the guidelines for the UASL 2003

(CAG, 2010). As per the guidelines issued by DOT for the issue of licences as

mentioned in the table above, UASL were to be issued on the continuous basis

without putting any cap on the number of the entrants in a particular service area,

also the applications received for the UASL were to be processed within thirty

working days of submission and the allocation of radio spectrum and grant of

wireless licence were subject to the availability of spectrum and in cases where the

UASL holder was unable to get the spectrum due to the unavailability of the

spectrum, the UASL holder had to roll out the services using the wire-line technology

(CAG, 2010).

According to the audit report by CAG – 2010 application for the issue of new UASL

were not processed within the prescribed time-frame and were delayed without a

strong reason. Further in its report CAG points out that in 2004-05, fourteen out of

the fifteen grants of UASL were delayed for 608 to 969 days and the same pattern

followed in 2005-06 as all nine applications received by DOT were delayed by 232 to

431 days and all twenty nine applications received by DOT in 2006-07 were not

processed till October 2007 and all of this happened without providing a legitimate

reason for the delay and no records and without sending any communication to the

applicants (CAG, 2010).

It was in April 2007 when DOT sought TRAI‟s recommendations on the issue of

limiting the number of access providers in each service area and TRAI in its

recommendations published in August 2007 recommended “no cap” on the number

of licences (TRAI, 2007).

3.6.1 Undue haste in receiving and processing of applications:

Though TRAI recommended “no cap” in August 2007, on 24th September 2007

DOT released a press note stating that “it has been decided that new applications for

Unified (Telecom) Access Services (UAS) Licences will not be accepted by

Department of Telecommunications (DOT) after 01.10.2007 till further orders” (DOT,


2007). This press note artificially put a cap on the number of licences to be awarded,

which led to sudden influx of applications. Till the issue of the press note the total

number of applications for the grant of the licence stood at 167 which included

pending applications since March 2006, but after the artificial cap was announced by

DOT, further 408 applications were received for a grant of licences in the next eight

days resulting in accumulation of 575 applications till the declared cut-off date of

01.10.2007 (CAG, 2010). This sudden influx of applications indicated that the mobile

network operators were aware that the spectrum was a scarce resource and such

scarcity would leave little of no spectrum for future allocations (BS Reporter, 2011).

3.6.2 Multiple activities on 10th January 2008:

DOT on 10th January 2008, released another press note stating that “DOT has

decided to issue LOIs to all eligible applicants on the date of application who applied

up-to 25.09.2007” (DOT, 2008). The press release also stated that “DOT has been

implementing a policy of FCFS for grant of UASL under which initially an application

which is received first will be processed first and thereafter if found eligible will be

granted LOI and then who so ever complies with the conditions of LOI first will be

granted UASL” (DOT, 2008). If examined carefully this stipulation introduced by the

DOT for the first time actually made the date of the application irrelevant and grossly

violated the transparency of the FCFS policy being followed by the DOT in the

process of issuing the licences.

But according to the audit report published by CAG -2010, in the draft press release

to keep the inter-seniority of applicants based on their date of applications, if one or

more applicants complied with LOI conditions on the same day. But the telecom

minister personally deleted this provision from the press release observing that the

proposal was “not necessary as it is a new stipulation” (see appendix two) while at

the same time forgetting the basic stipulation “who so ever, complies with the

condition of LOLs first will be granted UASL” was also a new stipulation being added

for the first time (CAG, 2010).

On the same day (14:45 pm) DOT released another press note asking all applicants

to assemble at the DOT headquarters within forty five minutes (i.e. by (15:30 pm) to

collect letters in response of their application for grant of UASL (DOT, 2008).


Applicants who were found eligible for the LOI collected their LOIs and also 120

acceptance of applications were also received on the same day as well, as far as the

compliance to the terms and conditions of LOI is concerned 78 applicants submitted

their documents with requisite fee on the same day and the remaining on the

following day (CAG, 2010). It is quite contradictory that DOT took over 100 to 500

days to process the applications for the grant of UASL and when it came to the

applicants to assemble at DOT premises to collect LOIs, it only allowed only less

than a day to comply with the LOI conditions (BS Reporter, 2011).

3.6.3 Three applicants provided pre-dated bankers drafts:

According to CAG in its audit report CAG-2010, noticed that three applicants were

even ready with bankers drafts drawn on dates prior to the notification the of cut off

date (see appendix one), further building on this there was an applicant who also

submitted the Performance Bank Guarantee (PBG) and the Financial Bank

Guarantee (FBG) which was prepared on 10th January 2008 in Mumbai to DOT on

the same day (see appendix three) (PTI, 2011). This shows that these applicants

were privy to advance information regarding the issue of press release by DOT

which allowed to take appropriate advance actions to draw bankers drafts and

prepare other relevant documents which allowed them to comply with LOI conditions

even though the date for compliance of LOI was changed by DOT from fifteen days

to about half a day (CAG, 2010 and Reuters 2011).

3.6.4 FCFS policy of DOT was not followed in full spirit:

In January 2008, DOT arbitrarily decided to issue the LOIs simultaneously to all

applicants, who had submitted their applications from March 2006 to 25th September

2007, by doing this DOT deprived the applicants who had submitted their

applications earlier, of their seniority and claims of earlier applicants to get the LOIs

first. Further building on this DOT altogether removed the importance of date of

submission of application in the FCFS policy by allowing the applicants to obtain to

collect LOIs who complied with the LOI conditions before the earlier applicants.

Further damage came to DOT‟s credibility as a regulatory agency and transparency

and objectivity of FCFS policy when details like date of issue of LOIs were leaked to

a few applicants, which helped these applicants to be ready with pre-dated bankers


drafts of millions of pounds prior to the date of issue of the press release calling for

applicants to collect the LOIs from the DOT on 10th January 2008.

In its audit report CAG -2010, further criticised the DOT for the lack of transparency

and the allotment of UASL with the objective of favouring a few firms over others.

CAG -2010 report also noted that certain firms like Swan Telecom Private Ltd, which

actually submitted its application for the grant of the UASL on 02nd March 2007, was

allotted the spectrum for the Delhi service area on 28th August 2008, while another

firm Spice Communications Ltd which had submitted its application for the Delhi

service area in August 2006 was not allotted the spectrum till their audit report was

published in November 2010. This just not happened only on one occasion but this

was the same case with several firms, in another example, Spice Communications

Ltd applied for the spectrum on 31st August 2006 in Mumbai service area and was

allotted spectrum in May 2009, while the new entrants in the market like Unitech

Wireless and Videocon Communications applied for spectrum in September 2007

and were allotted spectrum in September 2008 (CAG, 2010).

3.6.5 How the sanctity of DOT’s FCFS policy violated:

Abrupt fixation of arbitrary cut-off dates in September 2007 for the receipt of

application, completely ignoring the recommendations of TRAI;

Clubbing all applications together and issuing LOIs simultaneously,

completely ignoring the basic facts and mandate of FCFS policy;

Changing the method in which FCFS was applied from the date of the receipt

of applications to date of compliance of LOI conditions;

Basic fact and proposal to allow the inter-seniority of applications based on

their application date, which was based on the fact if more than one applicant

complied with the LOI conditions on the same day was rejected and;

Make confidential information like the date of issue of LOIs to select few

applicants which allowed them to prepare pre-dated bankers drafts and other

necessary documentation which was required to comply with LOI conditions.

3.6.6 Access to dual technology:

DOT in April 2007 requested TRAI to prepare recommendations if the mobile service

providers should be permitted to offer services to consumers using combination of


technologies (CDMA and GSM) TRAI produced and presented its recommendations

to DOT in August 2007. According to TRAI‟s recommendations, “a UASL holder

using one technology either GSM or CDMA may be permitted on request to use

alternative technology GSM or CDMA depending upon the request and the service

provider should be permitted to use dual spectrum if approved by DOT. However,

such a UASL holder must pay the same amount of fee which has been paid by

existing UASL holders who are using the alternative technology or which would be

paid by the new entrant in the market who is going use that technology” (TRAI,

2007).

Till 2006 four companies (Reliance Communications, Tata Teleservices, Shyam

Telelink and HFCL Infotel) were providing mobile services by using CDMA

technology under UASL, it was in 2006 when three out of four of these companies

applied for the permission to use dual technology (CDMA/GSM or any other for that

matter) as the combination of technologies were not permitted by DOT till beginning

of 2007 there application was not approved (CAG, 2010). It was only in August 2007

when DOT accepted the recommendations made by TRAI regarding the usage of

dual technology to provide mobile services; DOT for the first time took the decision to

allow dual technology on 17th April 2007 this decision was made public through a

press note released by DOT (DOT, 2007). But according to CAG audit report CAG -

2010 and Press Trust of India (PTI, 2011), before DOT announced that its going to

accept the recommendations provided by TRAI on 17th October 2007, DOT gave

approval to three companies for using GSM technology on 16th October 2007 (a day

before the press release) using the “in-principle” approval, these three companies

requested DOT in 2006 if they can dual technology which was well before DOT even

asked TRAI for its recommendations, again it is observed by CAG in its audit report

that DOT showed undue haste in approving the applications of these three

companies through “in-principle” approval and this undue haste was not evident

afterwards as when the Tata Teleservices applied for the use of the dual technology

immediately after the press release on 18th October 2007, LOI was not issued to

Tata Teleservices till January 2008 and further there were two more companies

(Sistema Shyam Teleservices and Etisalat DB Telecom) who were still waiting for

the approval for the use of dual technology till March 2010 (CAG, 2010).


This again shows the irregularities performed by DOT while introducing the use of

dual technology to the existing telecom operators in India. A Level playing field was

denied to other telecom operators who only applied for the use of the dual

technology after the formal announcement of the policy.

3.7 Implementation of Unified Access Services Model:

3.7.1 Gaps in implementation of UAS model:

When TRAI in 2003, submitted its recommendations on Unified Access Services

which envisaged total elimination of service based licensing. Unified Access

Services was an approach towards convergence of access media. Full

implementation of Unified Access Services was to be completed in two phases

(TRAI, 2003). On 31st October 2003 EGOM approved the recommendations

submitted by TRAI in the following manner:

“a two-stage process; the unified access service for basic and cellular

operators allowing a migration path to existing BSPs and CMSPs in the first

phase to be implemented immediately followed by a second phase of a fully

unified access services licence/authorisation within six months, bringing all

telecom services under one licence, after a process of detailed consultation

by TRAI”.

“fee paid by the fourth cellular operator to be used as a benchmark for

migration of BSOs to the new unified access services and no fee to be paid by

the existing CMSPs for migrating to unified access services”.

“the DOT to be authorised to finalise details of implementation of UAS and the

fully unified licence regime with the approval of the Minister of Communication

and Information Technology (MOC&IT) based on its recommendations of

TRAI”.

TRAI in its 27th October 2003 recommendations, proposed three alternatives in

which the migration of existing operators can be done, “the first alternative could be

inviting bids from existing operators as well as from the new prospective UASL

operators. The second alternative could be that basic service operators who are

willing to migrate to the UASL should pay the difference in entry fee of average of 1st

and 2nd cellular operators and entry fee paid by the BSPs. The third alternative is

that the existing entry fee of the fourth cellular operator would be the entry fee in the


new UASL. BSPs would pay the difference of the fourth CMSPs existing entry fee

and the entry fee paid by them” (Para 7.16 – 7.18, TRAI, 2003). TRAI finally

recommended the third alternative which suggested migration of existing BSPs by

charging an entry fee determined through a bidding process in 2001 for the fourth

CMSPs and no fee from the existing CMSPs, TRAI justified this choice on the

grounds of a likely delay in implementation of UAS regime if other two alternatives

are implemented.

But in these recommendations there was no mention of an entry fee to be charged

from the new licensees under the UASL, as TRAI did not recommended entry of new

operators in the first phase of UASL which was only intended for the migration of

existing BSPs and CMSPs. TRAI only recommended the entry of new operators

through UASL only in the fully implemented UASL. TRAI in its recommendations also

suggested that “taking cognizance of spectrum availability, TRAI is in favour of

introducing more competition. However, we feel that in lieu of more cellular operators

it would be more appropriate to have competition in UASL which will be initiated only

after the implementation of the first phase of UASL” (Para 7.37, TRAI, 2003).

Therefore the stipulation of the DOT to benchmark entry fee in respect of new

licences also at the same level which was only allowed for migration of existing

BSPs was not consistent with the recommendations submitted by TRAI in 2003. One

of the most important objectives of 2003 UASL policy was to de-link the spectrum

from licence and to encourage its efficient use by rational allocation procedure and

pricing and the first step to achieve this was to migrate existing licensees. And under

the fully implemented UASL it was envisaged that the licence fee would be nominal

and then the service provider can choose what services they want to provide and

obtain the spectrum accordingly, but this was the second step in the 2003 UASL

policy and TRAI was yet to give recommendations on this. This shows that TRAI‟s

recommendations were not fully implemented by DOT, which meant the most

important objective of the 2003 UASL policy remained unachieved.


3.8 Acts of corruption:

All definitions of corruption include political corruption. “Government for Sale” is the

phrase used to describe corruption where government property or services are

privatised (Eicher, 2005). Corruption is defined by the World Bank (2005) similarly,

as “the extent to which public power is exercised for private gain, including petty and

grand form of corruption, as well as ‘capture’ of the state by elites and private

interests”. In particular to this research, the public corruption is most relevant, as

described by Eicher (2005), “public corruption could occur when a member of the

tax-paying public is given poor service or asked to pay a bribe by one who is

engaged in public service: a judge, a policeman, a civil servant, etc”. Further in

relation to this dissertation, corporate corruption occurs as well, Eicher (2005),

describes “corporate corruption generally takes two forms: engaging in bribe-making,

usually as a supplier of bribes, and violations of ethical and professional standards

with the intent to deceive or defraud investors. With respect to bribes, corporate

corruption could consist of a representative of the firm receiving bribes, either to

another party or to a representative of a domestic or foreign government”. This is

what happened in the case of second generation spectrum allocation, as certain

companies were awarded UASL who were firstly ineligible to apply for UASL and

secondly they were privy to certain confidential information like dates of issue of

LOIs which gave them enough time to get necessary documents and Financial Bank

Guarantees (FBG) required to comply with the LOI requirements to get the UASL.

This clearly shows that the officials of DOT and MOC & IT were involved in acts of

corruption. Due to these acts of corruption Chief Executive Officer‟s (CEOs) of five

telecom companies, former minister of telecommunications and one more member of

parliament are in custody of Crime Branch of India, by order of Supreme Court of

India (PTI, 2011).


4.0 Research Design and Methodology:

4.1 Introduction:

The purpose of this research was to investigate the irregularities performed by Indian

Department of Telecommunication (DOT) in allocation of second generation telecom

licences in 2008.

Methodology is very important to any research project. This is based on its role in

explaining the process of conducting the research. The methodology provides a vivid

analysis of how the research was conducted and makes the result derived from the

research viable and makes the study to be readily accepted in the field of study. In a

nutshell methodology answers these two questions which are how the data was

collected and how the data was analysed.

4.2 Research Approach: Selection and Justification of Methods

Used:

The epistemological stance used is interpretivism. This is used when “the social

world of business and management is far too complex to lend itself to theorising by

definite ‘laws’ in the same way as physical science”. (Saunders, Lewis and Thornhill,

2003, p.102). An argument for interpretivism is presented by Remenyi et at. (1998,

p.35) he explains that you need to know “the details of the situation to understand

the reality or perhaps a reality working behind them”. This stance is most suitable for

the research undertaken for this dissertation, as knowledge of the facts and reality is

crucial before any analysis could take place. As there are many influencing factors

on relationships between DOT, TRAI and telecom operators and the facts known

about this research topic are in the public domain.

The research approach chosen is inductive, this is where you “collect data and

develop theory as a result of you data analysis” (Saunders et al, 2003, p.105).

Induction approach has been chosen over deduction, due to the deductive approach

having a tendency to “construct a rigid methodology that does not permit alternative

explanations of what is going on”. (Saunders et al, 2003, p.104). The research

undertaken for this dissertation needs to allow for alternative explanations to draw


valid conclusions and recommendations. Working with a strict methodology would

not allow some issues to come to light, which would be detrimental to the research

and the outcome of any recommendations made.

According to Robson (1993) there are three traditional research strategies;

experiment, survey and case study. An experiment according to Saunders et al,

(2003, p.109) “owes much to the natural sciences, whereas the survey strategy is

usually associated with the deductive approach”.

For this dissertation the strategy selected is case study, as the research is

conducted around one particular incident of allocation of second generation telecom

licences in 2008. According to Robson (1993, p.40) “a case study strategy is the

development of detailed, intensive knowledge about a single case or a small number

of cases”.

According (Ghuari, P., Gronhaug, K. and Kistianslund, I. 1995, p.57) there are three

main research methods most suited to business research interviews,

questionnaires/surveys and observations. Observations require the monitoring of a

specific group‟s behaviour in certain situations. This was unsuitable for the research

undertaken for this dissertation as the sample was spread over four locations (News

agency offices in New Delhi, Civil Servants in Central Secretariat in New Delhi,

Members of Parliament in Parliament house and the General Public which is spread

across the suburbs of New Delhi), and therefore impossible for the researcher to be

at several places at once. As a result questionnaires were the most appropriate

method of data collection.

4.3 Case Study Approach:

The research strategy chosen to answer the research objectives is a longitudinal

case study approach. (Saunders et al, 2003, p.114) describes a case study as

“research strategy that involves the empirical investigation of a particular

contemporary phenomenon within its real-life context using multiple sources of

evidence”. Saunders (2003) also states that case study approach allows the

opportunity to generate answers to the questions, Why? What? And How? These

questions are vital, as you have to be able to understand the situation before you


can analyse and produce recommendations for improvement. This is further echoed

by Jankowicz (2000, p.48) as he states that the case study approach “explores

issues in the past and present and effect the situation and consequently enables you

to look the future by means of the recommendations made”. Therefore using a case

study approach for this dissertation will enable a position from which the researcher

can draw conclusion on irregularities performed by DOT and the policy lapses that

occurred since the implementation of UASL 2003 and the issuance of telecom

licences in 2008, thus resulting in correlations being drawn between the two.

Taking into the time horizons, a longitudinal study has been selected. Saunders et al,

2003, p.114) states that the “the main strength of longitudinal research is the

capacity that it has to study change and development”. The questionnaires were

undertaken whilst when researcher visited India (31st August 2011 – 14th

September 2011).

4.4 Sampling:

The main research took place in New Delhi, India, using questionnaires.

Questionnaires were carried out in a phased manner firstly, journalists form news

agencies in India who reported and commented on second generation telecom

scam, in second phase, civil servants who are directly attached to the government

departments like DOT, TRAI, Ministry of Finance India (MFI) and Ministry of

Communications and Information Technology (MOC&IT), in third phase members of

parliament were approached who have been in the cabinet during May 2005 – May

2010 and in the fourth phase the general public was approached who have

knowledge about this topic and who felt their country was robbed by the corrupt

politicians and all of these samples were firstly approached directly and the ones

who could not be approached directly were emailed the copy of questionnaire with

covering letter explaining why this research is being carried out.

In total 180 questionnaires were carried out fifty to news journalists, fifty to civil

servants, fifty to member of parliaments and thirty to general public. This data

collection technique was chosen because it allowed the researcher to break down

the population into four groups before a random selection was carried out. This gave


whoever wants to participate in the questionnaire, an equal chance of being selected

and helped to eliminate the bias in the selection process.

4.5 Questionnaires:

Questionnaire are useful when using the survey strategy, however, it is also

recognised as being useful when adopting a case study approach. Saunders et al,

2003, p.298) cites de Vaus (2002) as defining the questionnaire as “all techniques of

data collection in which each person is asked to respond to the same set of

questions in a predetermined order”. The major problem associated is that of

subjectivity and ambiguity of respondents. This was emphasised by Bell (1992, p.60)

who said “words that have a common meaning to you mean something different to

other people” therefore questions must be constructed effectively and free from

ambiguity. Robson (1995, p.243) reinforced this by stating “the construction of the

questions must be carefully considered to ensure that they provide answers to the

research questions being asked”. One way to ensure reduced ambiguity is to pilot

the questionnaire.

An introductory letter was e-mailed out to the questionnaire sample to introduce the

author and explain why this research is being conducted; this e-mail also included

the questionnaire (appendix six). The questionnaire was designed using a format

which had three options for all close ended questions, which hopefully encouraged

respondents to think about the questions before they answered them, as they were

forced to make a decision. By using this technique, the collection of data on opinions

and beliefs of the respondents were analysed to the extent they agree or disagree

with a statement. This enabled the researcher to obtain qualitative data from the

sample while still keeping the results numerical for ease of comparison.

The questionnaire was designed to collect opinions and beliefs as the results helped

to evaluate to what extent particular issues are a problem thus recommending

appropriate solutions. The questionnaire consisted of four general information

questions like name, age, e-mail address and what part of civil society do they

belong to and all of these questions were optional and ten close ended which were

mandatory and crucial to the success of the primary research for this dissertation.


The completed questionnaires were e-mailed back by the respondents and plus the

completed physical copies of questionnaires were also received as soon as they

were filled out by the respondent as the researcher was present at the site. The total

responses received were 97 compared to the initial target of 180 the total response

rate was (53.89%).

4.6 Methodology Reviewed:

The case study method through questionnaire was appropriate for this scale of

research. However, observations may have led to a greater insight into this research,

but they also tend to lead to a larger Hawthorne effect which is a tendency for

“people being observed as part of a research, to behave differently that they would

otherwise” Buchanan and Huczynski (1997, p.183). While carrying out the

questionnaires an independent stance was achieved by explaining to the

respondents that this research was carried for a post-graduate degree, and not

directly linked to the investigations carried out by the Crime Branch of India (CBI)

through an introductory covering letter.

4.7 Technical and Ethical Issues:

4.7.1 Technical Issues:

The questionnaires were first pilot tested which highlighted issues regarding flow,

ambiguities and general ease of understanding. The pilot sample was a group of

professionals in India which were personally known by the researcher as they would

all approach the questions from different stances. A factor that could distort the

responses could be fear of negative comments, having a detrimental effect on

positions of the respondents if relayed back to a point of authority. This issue was

reduced through participants being reassured that responses given would be kept

confidential and no outside party would have any access to the primary data

collected.

The potential problem that could have come up with the primary data collection was

that not many members of civil society in UK are informed or at least have a direct

interest in the topic of this dissertation. In order to overcome this major problem the


interviewer-administered questionnaire were specifically designed for sample in India

who had the knowledge about the topic of this dissertation.

4.7.2 Ethical issues:

Ethical considerations were given throughout the study with regard to access,

confidentiality and consent. Due to the sensitive nature of this research, none of the

personal details were asked while carrying out the primary research and the

respondents were encouraged to leave the personal details field blank in the

questionnaires if they wished to.

4.8 Secondary Research:

During the search for the literature, the researcher concluded that due to the

dynamic nature of this dissertation topic and the constantly changing nature of

telecommunication sector in India, there is not a huge amount of literature which is

available in textbooks but textbooks can be used to get key models which can be

used throughout the dissertation. Therefore the research for the literature is primarily

focused on online articles published by news agencies in India, industry reports

published by TRAI, electronic library databases like Business Source Premier,

Emerald Insight Science Direct and Google Scholar, these databases helped the

researcher to collect academic journal articles, reports and business articles from

sources like Harvard Business Review and The Economist related to the

telecommunication policies in India and other big telecom markets like UK, China,

Canada, Australia and United States.

While browsing and checking the quality and authenticity of the content available the

researcher has specifically searched terms like telecommunication policy in India,

wireless spectrum allocation, spectrum allocation process, second generation

spectrum allocation scam in India, 3G spectrum allocation in India, 3G

spectrum allocation in UK and United States. The combined result yield from

these sources mentioned above is in the range of thirty five to fifty five, these results

include online news articles, journal articles, industry reports and articles in business

magazines like Business Today (India), Outlook (India), Harvard Business Review

and The Economist.


The secondary research is collected through mainly three sources: academic

journals, news reports and audit reports published by government agencies in India.

The reason for choosing this approach is to make sure that the bias if any that arises

from any of the above sources can be kept to minimum and also to present a wide

picture of the evidence available rather than solely relying on a single source which

leaves the window open for the bias of one author.


5.0 Results and Findings:

This chapter will analyse the results of the primary data collected through the

questionnaire as described in the research methodology. The structure of data will

follow the layout of the questionnaire (appendix five). Raw data collected through the

primary research is presented in tables (appendix seven).

Sample age group:

As far as the age group is concerned the majority of the respondents were aged

above fifty around 34%, followed by respondents who were aged between forty to

forty nine around 32%, 22% of respondents were aged between thirty to thirty nine

and the last 12% of the respondents were aged between twenty to twenty nine. So

here it can be clearly seen that majority of the respondents were quite mature and it

can be presumed that their responses would have more credibility. Figure below

represents the responses graphically.

Q – 1 What part of civil society do you belong to?

This question asked the respondents to identify thier proffession.Out of the total

replies recieved for the questionnaire, 26% of the respondents were News

Jounalists, Civil Servants and General Public makes up a figure of 25% each and in

last 24% of the respondents were Members of Parliamnet. This yields a total

response rate of (97/180*100 = 53.89%). Figure below represents the responses

graphically.


Q – 2 Are you aware of the recent second generation telecom spectrum scam

in India?

This question asked the repondents to identify if they were aware of the topic of this

research (“Irregularities performed by the Indian Department of Telecommunications

in allocation of second generation telecom licences in 2008”), by asking this question

the researcher of this dissertation was able to filter out the responses that were not

relavent to this dissertation and if they would have been included then they would

have jeopradised the findings and the conclusion of this research. So out of the total

replies recieved around 97% respondents said that they were aware of the recent

second generation telecom spectrum scam in India and around 3% of the

respondents said that they were not aware of this topic and as a result these

responses were not used as they were irrelavant to this research. Figure below

represents the responses graphically.


Q – 3 How did you hear about the second generation telecom spectrum scam

in India?

This question asked the respondents through what medium did they learned about

the second generation telecom spectrum scam. Out of the total replies recieved

around 46% of the respondents said they came to know about the telecom scam

through other reports, around 29% of the respondents said that they came to know

about the telecom scam through the television news reports, followed by 22% of

respondents who said that they came to know about the telecom scam through

newspaper reports and lastly around 3% of the respondents said that they came to

know about the telecom scam through the magazine reports. Most of these 46%

respondents are Memebers of Parliament and Civil Servants who have access to

internal reports in comparision to News Jouranlists and General Public who rely on

the reports availaible in public domain. Figure below represents the responses

graphically.

Q – 4 In your opinion do you think that the reports that you have been reading

and watching provide unbiased information on the second generation

spectrum scam in India?

This question asked the respondents if they think that the reports they have been

reading regarding the telecom scam provided the unbiased information. Out of the

total replies recieved around 62% of the respondents said yes, around 27% of the

respondents said that they can‟t say if the reports they have read are biased or not

biased, and in last around 11% of the respondents said that the reports read by them


regarding the telecom scam are biased and they do not represent the real facts.

Figure below represents the responses graphically.

Q – 5 In your opinion do you think that Department of Telecommunications

(DOT) carried out the allocation of 2G specrum to mobile network companies

in a fair and transparent manner?

This question asked the respondents if they think that DOT allocated the 2G

spectrum licences fairly and showed transpareny in the allocation process. Out of the

total replies recieved, around 65% of the respondents said that the allocation

process was neither fair or transparent, around 23% respondents said that the

allocation process was both fair and transparent and lastly around 12% of the

respondents said that they can‟t say yes or no regarding the nature of allocation

process being fair and transparent. If these responses are related to literature

review – section 3.6 – procedures adopted in issuances of UASL and allotment

of spectrum, it is quite clear that both primary and secondary research suggest that

DOT did not allocate the 2G spectrum to mobile network companies in a fair and

transparent manner. Figure below represents the responses graphically.


Q – 6 Do you think that the loss caused due to the inefficient allocation of 2G

spectrum was solely down to the Department of Telecommunications (DOT)?

This question asked the respondents if they think that the loss caused due to the

inefficient allocation of 2G spectrum was solely down to the DOT. Out of the total

replies received around 60% of the respondents said that they don‟t think that it was

all down to DOT and there were other government agencies that were involved in

this, followed by 26% of the respondents which said it was only solely DOT who was

responsible for the loss and other government agencies had nothing to do with this

and lastly 14% of the respondents said that they can‟t say if the loss was solely down

to DOT or there were some other government agencies who were also responsible

for this loss. If these responses are related to the literature review – section 3.5 –

financial impact of second generation scam in India, it is quite clear that both

primary and secondary research suggest it was not solely down to DOT and there

were other government agencies that contributed to the financial loss which

amounted to £19.39 billion. Figure below represents the responses graphically.


Q – 7 Do you think that Department of Telecommunications (DOT)

implemented the 2003 UASL policy effectively and efficiently?

This question asked the respondents if they think that DOT implemneted the 2003

UASL effectively and efficiently. Out of the total replies recvieved around 70% of

responednts said that DOT failed to implement the 2003 UASL policy, followed by

18% of the respondents who said that DOT did implement 2003 UASL policy

successfuly and lastly 12% of the respondents said that can‟t say yes or no if DOT

implemented 2003 UASL policy efficiciently and effectively. If these responses are

related to literature review – section 3.7 – implementation of Unified Access

Services Model, it is quite clear from both primary and secondary research that

DOT failed to implemnt the 2003 UASL policy as it was recommended by TRAI and

as it was approved by EGOM. Figure below represents the responses graphically.

Q – 8 Do you think that Department of Telecommunications (DOT) and Minister

of Communications and IT (MOC & IT) were involved in the acts of corruption?

This question asked the respondents if they think that DOT and MOC & IT were

involved in the acts of corruption. Out of the total replies recieved around 82% of the

respondents said that they believe strongly that both DOT and MOC & IT were

heavly involved in acts of corruption, followed by 12% of the respondents who said

that both DOT and MOC & IT were not engagged in acts of corruption and this 2G

spectrum scam is a conspiracy and lastly 6% of the respondents said that they can‟t

say yes or no if both DOT and MOC & IT were engagged in acts of corruption. If

these responses are related to the literature review – section 3.6.2 Multiple


activities on 10th January 2008, 3.6.3 Three applicants provided pre-dated

bankers drafts and 3.8 Acts of Corruption, it is quite clear from both the primary

and secondary research that both DOT and MOC & IT were engagged in acts of

corruption and also favoured few companies which were technically ineligible to

obtain any telecom licences. Figure below represents the responses graphically.

Q – 9 In your opinion do you think that Government of India is doing enough to

get into bottom of these irregularities performed by Department of

Telecommunications (DOT), Minister of Communications and IT (MOC & IT)

and the companies which were issued UASL in 2008?

This question asked the respondents if they think that Goverment of India is doing

enough to get into to the bottom the irregularities perfomed by DOT, MOC & IT and

also if the Government of India is taking appropriate actions against the companies

which got UASL in 2008 illegally. Out of the total replies recieved around 47% of the

respondents said yes, followed by around 30% of the respondents said that they

can‟t say yes or no if the government is doing enough to get into bottom of these

irregularities and lastly 23% of the respondents said that goverment is not doing

enough. If we relate these reponses to the literature review section – 3.4.2 India

third generation spectrum auctions and 3.8 Acts of Corruption, it is quite clear

from both primary and secondary research that government is taking sufficient

actions against the culprits. Figure below represents the responses graphically.


Q – 10 Do you think that Government of India would take appropriate actions

against the culprits and would introduce stringent and transparent telecom

policies in future to prevent these events happening again?

This question asked the respondents if they think that Goverment of India would

introduce stringent and transparent telecom policies in future to prevent these events

happening again. Out of the total replies recieved around 51% of the respondents

said yes, followed by 38% of the respondents who said that they can‟t say yes or no

if the government of India would inroduce stringent and transparent policies to prvent

this happening again and lastly 11% of the respondents said that they don‟t think that

government of India would introduce stringent and trasnparent polices to prevent this

happening again. If we relate these responses to the literature review section –

3.4.2 India third generation spectrum auction, it is quite clear from both primary

and secondary research that Goverment of India has taken and would in future take

steps to prevent these events happening again. Figure below represents the

responses graphically.


Q – 11 And finally, do you think that these acts of corruption and irregularities

performed by several governments departments can be avoided in future if

strong steps are taken by the Government of India?

This question asked the respondents they if think that these acts of corruption and

irregularities performed by several governments departments can be avoided if

strong steps are taken by government of India. Out of the total replies recieved

around 64% of the respondents said that they do believe if govenment of India took

stronger steps than these acts of corruption and irregularities can be curbed,

followed by 30% of respondents who said that they can‟t say yes or no if these acts

of corruption and irregularities can be stopped and lastly 6% of the respondents said

that they don‟t think that these acts of corruption and irregularities can be curbed

even if the government of India took strong steps. If these responses are related

back to the literature review – section – 3.8 Acts of Corruption, it is quite clear

from both primary and secondary research that these acts of corruption and

irregulaties perfomed by several goverment departments can be curbed if goverment

of India takes strong actions against the culprits. Figure below represents the

responses graphically.

In end to summarise the results and findings, the primary research shows direct link

to the secondary research in the literature review section of this dissertation. For

example, fifth question of the questionnaire sent to samples asked if they think that

DOT allocated telecom licences in 2008 fairly and transparently. As suggested by

the secoandary research DOT failed to allocate these licences fairly and

transparently, this fact was strongly supported by primary research as well, as 65%


of the respondents said that DOT failed to allocate the licences the way they should

have been.

This is only just one example to show how primary research for this dissertation

directly relates to the facts presented by secondary research in literarture review

section. Rest of the questions also present the same relation between both primary

and secondary research. For further clarifications please go through the responses

from question six to eleven in the results and findings section above.


6.0 Conclusion:

Drawing upon NTP – 99, a policy framework was established in November 2003 to

chart the course for implementation of a Universal Licensing Model (ULM) for

telecom services. The DOT and MOC & IT did not make mid course review /

modifications, based on the collective wisdom of Government of India. The

recommendations made by TRAI were not followed in spirit, resulting in a transitory

phase of licensing regime continuing for years together without true value of 2G

spectrum being realised, while 3G spectrum, a similar resource was allocated at

market price discovered through auction, generating revenues of ` 67,718.95 crore

(£9.4 billion) for Indian exchequer in June 2010.

While targeted growth in tele-density had already been achieved, and a reduction in

tariffs in telecom sector had benefited the customer, as envisaged in NTP – 99, a

policy to ensure optimal utilisation of spectrum and a method to discover its market

price was not considered. Given its scarcity value and increasing demand, a

comprehensive evaluation of the available spectrum was required which was not

done with the UASL policy and its subsequent amendments being implemented in a

week and indeterminate manner and with the reluctance on the part of the DOT to

address the issue of pricing of 2G spectrum, it was only natural that 2G spectrum

was not allocated at its correct market value.

The entire process of allocation of UASL lacked transparency and was undertaken in

an arbitrary, unfair and inequitable manner. The Honourable Prime Minister of India

had stressed in 2008 stressed on the need for a fair and transparent allocation of

spectrum, and Ministry of Finance (MOF) had sought for the decision regarding

spectrum pricing to be considered by EGOM (CAG, 2010). Brushing aside their

concerns and advices, the DOT in 2008, proceeded to issue 122 new licences for 2G

spectrum at 2001 prices, by flouting every cannon of financial propriety, rules and

procedures. The DOT did not follow its own guidelines on eligibility conditions,

arbitrarily changed the cut-off date for receipt of applications post facto and altered

the conditions of the FCFS procedure at crucial junctures without valid and cogent

reasons, which gave unfair advantage to certain companies over others.


According to CAG 2010 audit report, DOT did not do the requisite due diligence in

the examination of applications submitted for the grant of UASL, leading to the grant

of 85 out of 122 licences to ineligible applicants. CAG 2010 audit report further

elaborates this issue and says that some of the ineligible companies were barely

created months before they filled applications for the grant of UASL, these

companies deliberately suppressed facts, disclosed incomplete information,

submitted fictitious documents and used fraudulent means for getting UASL and

thereby access to spectrum. Owners of these licences, obtained at unbelievably low

prices, have in turn sold significant stakes in their newly created companies to the

Indian / Foreign companies at high premium within a short period of time. The

premium earned by these new entrants to the telecom sector was nothing but the

true value of spectrum, which should have normally accrued to the Indian exchequer,

had the transparent and fair market mechanism been followed for the allocation of

UASL.

Dual technology (CDMA / GSM) was also introduced by the DOT in October 2007 in

a hasty and arbitrary manner and in-principal approval was given to three operators

on a day prior to the official announcement of the policy, which gave the perception

of discrimination against other players in the field.

The correct value of 2G spectrum allotted to 122 licensees in 2008 and to the 35

licensees under dual technology, also in 2008, could have been determined only by

a market driven process, if adopted. However, its presumptive value, based on

various available indicators has been indicated in literature review section –

3.5.1.1, 3.5.1.2 and 3.5.1.3.

In conclusion, the methodology for allocation of 2G spectrum, a scarce finite national

asset and for which there was an unprecedented demand for allocation was not

deliberated upon by the Telecom Commission of India (TCI). The entire

implementation process does not withstand the test of scrutiny, and hence, the

widely belief that it has benefited a few operators and has not been able to maximise

the generation of revenue from allocation of such scarce resource. This has now

been confirmed through this research. The role of TRAI would appear to have been

reduced to that of a hapless spectator as its recommendations were either ignored or


applied selectively. The entire process of allocation of 2G spectrum raises some

serious concern about the systems of governance in the DOT which need to be

thoroughly reviewed and revamped. The fact that there has been loss to the Indian

exchequer in the allocation of 2G spectrum cannot be denied or ignored. However,

the amount of loss could be debated. To ensure that such lapses do not occur in any

Ministry or Department of the Government of India, there is an imperative need to fix

responsibility and enforce accountability for the lapses highlighted in this research.


7.0 Recommendations:

After carrying out the research on the “Irregularities performed by Indian Department

of Telecommunication in allocation of second generation telecom licences in 2008”

following recommendations have been concluded:

A major restructuring exercise needs to be carried out by Government of India,

where the new telecom policy should separate the licensing and spectrum allocation

functions from the DOT, but DOT should continue to retain the policy making area.

The subordinate/attached offices of DOT should be entrusted with the licensing and

spectrum allocation work. However, the DOT should remain the final authority for

any decision making. This move will also enable the DOT to bring in more

transparency in licensing norms and procedures, which will promote investment and

lead to a consolidation and increased efficiency. The field units of DOT should be

strengthened to enable them to monitor and implement the licence conditions,

besides coordinating with the law enforcement agencies. DOT should give more

power to the TRAI, including the power to impose financial penalties on the erring

telecom service providers. Currently, DOT has the authority of imposing penalties on

telecom service providers, while TRAI can give its recommendations on penalties or

termination of licence and the final decision rests with the DOT (Taneja, M, 2011).

Government of India should direct the DOT to consider giving TRAI quasi-judicial

powers to adjudicate on penalties imposed by the DOT on service providers. The

DOT may like to vest such powers in the TRAI, which is a statutory authority, entitled

to regulate the conduct of telecom service providers. A quasi-judicial body has

powers similar to a court of law or judge, which enables it to impose legal penalties,

give orders of judgements. DOT should allow sharing of networks and delink the

licensing of networks from the delivery of service to the end users to facilitate faster

roll out of services across the country, enhance the quality of service, optimise the

investment and address the issue of the digital divide. This will also increase the

competition in the telecom sector without putting any entry barrier in setting up of

networks by new operators and at the same time allowing the existing operators to

increase their network utilisation by sharing the network facilities (Taneja, M, 2011).


DOT should take following steps to facilitate better spectrum management in future:

Delink spectrum in respect of all future licences. Spectrum shall be made

available at price through market related processes;

Seek TRAI‟s recommendations for new licensing framework, migration of

existing licensees to new framework, frame appropriate exit policy for the

licensees etc;

Permit spectrum pooling, sharing and later, trading for optimal and efficient

utilisation of spectrum;

Undertake periodic audits of spectrum utilisation to ensure its efficient use;

Prepare a roadmap for availability of additional spectrum every five years;

Strive to create one nation – one licence across services and service areas

and;

Enact a separate Spectrum Act which inter-alia deals with all issues

connected with wireless (spectrum) licences and their terms and conditions

including re-framing/withdrawal of allotted licence, exemptions on use of

spectrum, spectrum sharing, spectrum trading etc.

The primary objective of the new telecom policy should be maximising public good

by making available, reliable and secure telecommunication and broadband services

across the entire country. The main thrust of the policy should be on the multiplier

effect and transformational impact on such services on the overall economy. The

new telecom policy should recognise the role of such services in furthering the

national development agenda while enhancing equity and inclusiveness. Direct

revenue generation should remain to be a secondary objective. The new telecom

policy should also recognise the predominant role of the private sector in this field

and the consequent policy imperative of ensuring continued viability of service

providers in a competitive environment. Pursuant of new policy, these principles

would guide decisions needed to strike a balance between the interests of

users/consumers, service providers and government revenue (DOT, 2011).


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Appendices:

Appendix One: Pre-dated Bankers Drafts:

(Source: CAG – Audit Report, 2010)


Appendix Two: Press Release by DOT on 10th January 2008:



Appendix Three: Financial Bank Guarantee (FBG):



Appendix Four: Ethics Approval Form:

Ethics Approval Form – Students

This form should be completed by the student and passed to the supervisor prior to a

review of the possible ethical implications of the proposed dissertation or project.

No primary data collection can be undertaken before the supervisor has

approved the plan.

If, following review of this form, amendments to the proposals are agreed to be

necessary, the student should provide the supervisor with an amended version of

endorsement.

1 - What are the objectives of the dissertation / research project?

Whether the policy for the issuance of licence under the Unified Access

Service Licence (UASL) was implemented efficiently;

Whether the Unified Access Service Licence (UASL) and the radio spectrum

was allocated in a fair, transparent and efficient manner and;

Whether the potential for revenue generation was optimally managed for

government of India.

2 - Does you research involve NHS patients, resources or staff? YES / NO

(Please Circle)

NO

If yes, it is likely that full ethical review must be obtained from the NHS process

before the research can start.

The final signed and dated version of this form must be handed in with the

dissertation. Failure to provide a signed and dated form on hand-in will be treated as

if the dissertation itself was not submitted.


3 - Do you intend to collect primary data from human subjects or data that are

identifiable with individuals? (This includes, for example, questionnaires and

interviews). YES / NO (please circle)

YES

If you do not intend to collect such primary data then please go to question 14. If you

do intend to collect such primary data then please respond to all the questions 4

through 13. If you feel a question does not apply then respond with N/A (for not

applicable).

4- What is the purpose of the primary data in the dissertation / research

project?

The main purpose of primary data is to collect the responses from the members of civil society in India, journalists in Indian media and other stakeholders of the civil society in India who have knowledge about the topic of this dissertation which is “Irregularities performed by Indian department of telecommunication in allocation of second generation telecom licences in 2008”.

5 - What is / are the survey population(S)?

As mentioned in the answer to the above question, the survey population will include members of civil society in India, journalists in Indian media and other stakeholders who have direct and indirect interest in the topic of this dissertation.

6 - How big is the sample for each of the survey populations and how was this sample arrived at?

The sample size is expected to be around one hundred and eighty, which will comprise of journalists in Indian media who have reported on the second generation spectrum allocation scam and stakeholders who have a direct interest with the second generation scam, which will include the officials of Indian Department of Telecommunications and Indian Ministry of Finance.

7 - How will respondents be selected and recruited?

The researcher of this dissertation will travel to India in the month of August 2011 to carry out interviewer-administered questionnaires on the sample mentioned in the above question.

8 - What steps are proposed to ensure that the requirements of informed consent will be met for those taking part in the research? If an information sheet for participants is to be used, please attach it to this form. If not, please explain how you will be able to demonstrate that informed consent has been gained from participants.


Following is the information sheet:

This questionnaire is being used as primary data collection for an MSC Business and

Management dissertation. Thank you for agreeing to take time to fill out this survey,

if you wish I will send you the summary of my final work (please write your email

address in the “general information” section below.

I am looking to gain an insight into the views and opinions on the recent second

generation telecom scam regarding the allocation of telecom licences in 2008. I will

not include any personal information like (name, age and e-mail address) or any

sensitive information in my final work, this type of information is optional and please

feel free to leave these fields blank if you wish to.

9 - How will data be collected from each of the sample groups?

The data will be collected by use of interviewer – administered questionnaires.

10 - How will data be stored and what will happen to the data at the end of the

research?

As soon as the primary data is collected it will be stored on a secure Microsoft Excel File on university computer network, and the hard copies of the interviewer-administered questionnaires will be shredded as soon as the valuable data has been extracted.

11 - How will confidentiality be assured for respondents?

The respondents of the interviewer-administered questionnaires will be provided with a choice of not disclosing any personal information (like names, phone numbers, email addresses and location).

12 - What steps are proposed to safeguard the anonymity of the respondents?

As mentioned in the answer to the above question, the respondents will be provided with a choice to opt-out if they do not want to share any personal information.

13 - Are there any risks (physical or other, including reputational) to respondents that may result from taking part in this research? YES / NO (please circle)

NO

14 - Are there any risks (physical or other, including reputational) to the researcher of to the university that may result from conducting this research? YES / NO (please circle)


NO

15 - Will any data be obtained from a company or other organisation? YES / NO (please circle) for example, information provided by an employer or its employees.

NO

If no, then please go to question 18.

16 - What steps are proposed to ensure that the requirements of informed consent will be met for that organisation? How will confidentiality be assured for the organisation?

Not Applicable.

17 - Does the organisation have its own ethics procedure relating to the research you intend to carry out? YES / NO (please circle)

Not Applicable.

If YES, the university will require written evidence from the organisation that they have approved the research.

Not Applicable.

18 - Will the proposed research involve any of the following (please put a √ next to ‘yes’ or ‘no’ consult your supervisor if you are unsure):

Vulnerable groups (e.g. children)? YES NO

Particularly sensitive topics? YES NO

Access to respondents via „gatekeepers‟? YES NO

Use of deception? YES NO

Access to confidential personal data? YES NO

Psychological stress, anxiety etc? YES NO

Intrusive intervention? YES NO

19 - Are there any other issues that may arise from the proposed research?

The researcher has paid full attention to detail and have arrived to a conclusion that there will be no ethical issues that will arise from this research.

√

√

√

√

√

√

√


Please print the name of: I /We grant the Ethical Approval

Student: ANKIT YADAV Supervisor: JOHN WALTON

Signed:

(Student) (Supervisor)

___________________________________________________________________

Date:

___________________________________________________________________

AMMENDMENTS

If you need to make changes please ensure you have permission before the primary data collection. If there are minor changes, fill in a new form if that will make it easier for everyone. If there are minor changes then fill in the amendments (next page) and get them signed before the primary data collection begins.

Changes to Ethics Permission

VERSION:_____________________

Please describe the nature of the change and the impact on ethics:

Please print the name of: I /We grant the Ethical Approval

Student: ANKIT YADAV Supervisor: JOHN WALTON

Signed:

(Student) (Supervisor)

___________________________________________________________________

Date:

___________________________________________________________________


Appendix Five: Questionnaire Structure:

MSC Business and Management Dissertation Survey

This questionnaire is being used as primary data collection for an MSC Business and

Management dissertation. Thank you for agreeing to take time to fill out this survey,

if you wish I will send you the summary of my final work (please write your e-mail

address in the “general information” section below).

I am looking to gain an insight into the views and opinions on the recent second

generation telecom scam regarding the allocation of telecom licences in 2008. I will

not include any personal information like (name, age and e-mail address) or any

sensitive information in my final work, this type of information is optional and please

feel free to leave these fields blank if you wish to.

General Information

Name (optional):

Date completed:

Age: 18 – 29 ( ) 30 – 39 ( ) 40 – 49 ( ) 50+ ( )

E-mail address (if you would like a summary of my dissertation):

What part of civil society do you belong to?

Member of Parliament ( )

News Journalist ( )

Civil Servant ( )

General Public ( )

___________________________________________________________________________


Q – 1. Are you aware of the recent second generation telecom spectrum scam in

India?

Yes ( ) No ( ) please stop here

Q – 2. How did you hear about the second generation telecom spectrum scam in

India?

Newspaper reports ( ) Magazine reports ( ) Television news reports ( ) Other

reports ( )

Q – 3. In your opinion do you think that the reports that you have been reading and

watching provide unbiased information on the second generation telecom spectrum

scam in India?

Yes ( ) No ( ) Can‟t Say ( )

Q – 4. In your opinion do you think that Department of Telecommunications (DOT)

carried out the allocation of 2G spectrum to mobile network companies in a fair and a

transparent manner?


Q – 5. Do you think that the loss caused due to the inefficient allocation of 2G

spectrum was solely down to the Department or Telecommunications (DOT)?


Q – 6. Do you think that Department of Telecommunications (DOT) implemented the

2003 UASL policy effectively and efficiently?


Q – 7. Do you think that Department of Telecommunications (DOT) and the Minister

of Communications and IT (MOC & IT) were involved in the acts of corruption?



Q – 8. In your opinion do you think that Government of India is doing enough to get

in to the bottom of these of irregularities performed by Department of

Telecommunications (DOT), Minister of Communications and IT (MOC & IT) and the

companies were issued UASL in 2008?


Q – 9. Do you think that Government of India would take appropriate actions against

the culprits and would introduce stringent and transparent telecom policies in future

to prevent these events happening again?


Q – 10. And finally, do you think that these acts of corruption and irregularities

performed by several government departments can be avoided in future if strong

steps are taken by Government of India?


___________________________________________________________________________

Please stop here and thank you for your time in filling out this questionnaire.


Appendix Six: E-Mail Questionnaire Covering Letter:

Dear Sir/Madam,

My name is Ankit Yadav I am an MSC Business and Management student at the

University of Portsmouth. As part of the final stage of my post-graduate degree I am

researching the impact that the second generation telecom scam had.

This questionnaire is designed to understand the “Irregularities performed by the

Indian Department of Telecommunication (DOT) in allocation of second generation

telecom licences in 2008”. This piece of research is purely exploratory, and all

responses would be kept strictly confidential under the University‟s ethical

guidelines.

This questionnaire should not take longer than five minutes to complete. Please

answer all of the mandatory questions marked with * and you can leave personal

information section of the questionnaire if you wish to.

When you have completed the questionnaire please just press submit button

on the questionnaire form and you will get a conformation message on you

internet browser that your response has been securely recorded.

Following is the link for the questionnaire: http://goo.gl/qsSB8

Thanking you for taking the time to complete this questionnaire. Your responses are

of great help to my research project. If you would like any further information or have

any questions regarding this research please feel free to contact me through email

at: [email protected].

Yours Faithfully,

Ankit Yadav

http://goo.gl/qsSB8


Copy of E-mail sent to sample on 19th August 2011:



Appendix Seven: Primary Data Tables:

General Information Section:

Name Age E-mail Civil Society

KARAN THAPPAR 30 – 39 [email protected] NEWS JOURNALIST

BARKHA DUTT 30 – 39 [email protected] NEWS JOURNALIST

VIKRAM CHANDRA 40 – 49 [email protected] NEWS JOURNALIST

S.V. SINGH 40 – 49 [email protected] NEWS JOURNALIST

SREENIVASAN JAIN 30 – 39 [email protected] NEWS JOURNALIST

SONALI CHANDER 30 – 39 [email protected] NEWS JOURNALIST

NIDHI RAZDAN 30 – 39 [email protected] NEWS JOUNALIST

VISHNU SOM 30 – 39 [email protected] NEWS JOURNALIST

ANJANA MENON 30 – 39 [email protected] NEWS JOUNALIST

MANVI DHILLON 40 – 49 [email protected] NEWS JOURNALIST

IRA DUGGAL 30 – 39 [email protected] NEWS JOURNALIST

PRASHANT NAIR 30 – 39 [email protected] NEWS JOURNALIST

RAJDEEP SARDESAI 40 – 49 [email protected] NEWS JOURNALIST

SAGARIKA GHOSE 40 – 49 [email protected] NEWS JOURNALIST

ANUBHA BHOSLE 30 – 39 [email protected] NEWS JOURNALIST

S. CHENGALVAAYAN 40 – 49 [email protected] NEWS JOURNALIST

UDYAN MUKHERJEE 40 – 49 [email protected] NEWS JOURNALIST

SHREEN BHAN 30 – 39 [email protected] NEWS JOURNALIST

MITALI MUKHERJEE 30 – 39 [email protected] NEWS JOURNALIST

ANURADHA

SENGUPTA

40 – 49 [email protected] NEWS JOURNALIST

mailto:[email protected]





















LATA VENKATESH 50+ [email protected] NEWS JOURNALIST

MENEKA DOSHI 30 – 39 [email protected] NEWS JOURNALIST

ELAN DUTTA 20 – 29 [email protected] NEWS JOURNALIST

NAYANTRA RAI 20 – 29 [email protected] NEWS JOURNALIST

SONIA SHENOY 20 – 29 [email protected] NEWS JOURNALIST

VKC DEO 50+ [email protected] MP

BP VERMA 50+ [email protected] MP

D TRIVEDI 50+ [email protected] MP

S JENA 50+ [email protected] MP

J NATRAJAN 40 – 49 [email protected] MP

G KAMAT 40 – 49 [email protected] MP

CS MAHANT 50+ [email protected] MP

J SINGH 40 – 49 [email protected] MP

M DEORA 50+ [email protected] MP

R SHUKLA 50+ [email protected] MP

V DESHMUKH 50+ [email protected] MP

MV MOILY 40 – 49 [email protected] MP

A SHARMA 50+ [email protected] MP

PK BANSAL 50+ [email protected] MP

S KHURSHEED 50+ [email protected] MP

E AHAMED 40 – 49 [email protected] MP

V NARAYANSWAMY 50+ [email protected] MP

H RAWAT 50+ [email protected] MP

M ROY 40 – 49 [email protected] MP


























A KUMAR 40 – 49 [email protected] MP

AS YADAV 50+ [email protected] MP

LP YADAV 50+ [email protected] MP

M BANERJEE 50+ [email protected] MP

D MARAN 50+ [email protected] MP

R CHANDRASHEKAR 40 – 49 [email protected] CIVIL SERVANT

VK GUPTA 40 – 49 [email protected] CIVIL SERVANT

SC MISHRA 50+ [email protected] CIVIL SERVANT

C PRAKASH 40 – 49 [email protected] CIVIL SERVANT

JS SHARMA 50+ [email protected] CIVIL SERVANT

R ASHOK 50+ [email protected] CIVIL SERVANT

HS JANADAGNI 50+ [email protected] CIVIL SERVANT

P MUKHERJEE 40 – 49 [email protected] CIVIL SERVANT

O PAUL 40 – 49 [email protected] CIVIL SERVANT

Y SHARMA 40 – 49 [email protected] CIVIL SERVANT

M PANT 50+ [email protected] CIVIL SERVANT

P GUPTA 50+ [email protected] CIVIL SERVANT

R MALHOTRA 50+ [email protected] CIVIL SERVANT

S YADAV 50+ [email protected] CIVIL SERVANT

SM KRISHNA 50+ [email protected] CIVIL SERVANT

P KAUR 40 – 49 [email protected] CIVIL SERVANT

N RAO 50+ [email protected] CIVIL SERVANT

S AGGARWAL 40 – 49 [email protected] CIVIL SERVANT

R BHATTACHARYA 50+ [email protected] CIVIL SERVANT


























R SHANKER 50+ [email protected] CIVIL SERVANT

A KUMAR 50+ [email protected] CIVIL SERVANT

AB JAIN 40 – 49 [email protected] CIVIL SERVANT

D DUTTA 40 – 49 [email protected] CIVIL SERVANT

TK SARKAR 50+ [email protected] CIVIL SERVANT

N/A 20 – 29 N/A GENERAL PUBLIC















N/A 50+ N/A GENERAL PUBLIC








Raw Survey Data: From Q1 – Q5:

Q1 Q2 Q3 Q4 Q5

YES TELEVISION NEWS REPORTS YES NO NO

YES OTHER REPORTS YES NO NO





YES TEVELVISION NEWS REPORTS YES NO NO




YES TELEVSION NEWS REPORTS YES NO NO





YES OTHER REPORTS YES NO CAN‟T SAY



YES TELEVISION NEWS REPORTS CAN‟T SAY NO NO

YES OTHER REPORTS YES CAN‟T SAY NO


YES NEWSPAPER REPORTS YES NO NO



YES NEWSPAPER REPORTS CAN‟T SAY NO NO

YES NEWSPAPER REPORTS CAN‟T SAY NO CAN‟T SAY

YES NEWSPAPER REPORTS CAN‟T SAY YES CAN‟T SAY

YES OTHER REPORTS CAN‟T SAY NO CAN‟T SAY

YES NEWSPAPER REPORTS CAN‟T SAY NO YES


YES NEWSPAPER REPORTS CAN‟T SAY CAN‟T SAY YES

YES NEWSPAPER REPORTS NO YES NO


YES TELEVISION NEWS REPORTS NO YES NO

YES TELEVISION NEWS REPORTS CAN‟T SAY CAN‟T SAY CAN‟T SAY


YES OTHER REPORTS CAN‟T SAY CAN‟T SAY YES

YES TELEVSION NEWS REPORTS CAN‟T SAY NO YES

YES TELEVSION NEWS REPORTS NO YES NO


YES TELEVISION NEWS REPORTS CAN‟T SAY NO YES



YES TELEVISION NEWS REPORTS YES NO YES

YES NEWPAPER REPORTS NO YES NO





YES OTHER REPORTS YES NO YES




YES OTHER REPORTS NO YES NO

YES OTHER REPORTS CAN‟T SAY NO YES



YES OTHER REPORTS YES YES NO





YES OTHER REPORTS YES YES YES


YES NEWSPAPER REPORTS CAN‟T SAY CAN‟T SAY CAN‟T SAY


YES TELEVISION NEWS REPORTS CAN‟T SAY YES NO


YES OTHER REPORTS CAN‟T SAY CAN‟T SAY CAN‟T SAY



YES NEWSPAPER REPORTS YES NO NO







YES TELEVISION NEWS REPORTS CAN‟T SAY NO CAN‟T SAY


YES NEWSPAPER REPORTS YES YES YES

YES MAGAZINE REPORTS NO CAN‟T SAY CAN‟T SAY

YES TELEVISION NEWS REPORTS YES YES NO


YES NEWSPAPER REPORTS YES NO CAN‟T SAY

YES OTHER REPORTS CAN‟T SAY YES CAN‟T SAY

YES NEWPAPER REPORTS CAN‟T SAY NO NO


YES NEWSPAPER REPORTS CAN‟T SAY CAN‟T SAY NO

YES MAGAZINE REPORTS YES NO NO

YES OTHER REPORTS CAN‟T SAY NO CAN‟T SAY


YES MAGAZINE REPORTS CAN‟T SAY CAN‟T SAY NO

YES OTHER REPORTS YES YES YES



YES TELEVISION NEWS REPORTS YES CAN‟T SAY NO


YES OTHER REPORTS NO NO YES

YES OTHER REPORTS CAN‟T SAY CAN‟T SAY CAN‟T SAY

YES NEWSPAPER REPORTS YES NO CAN‟T SAY


Raw Survey Data: From Q6 – Q10:

Q6 Q7 Q8 Q9 Q10

NO YES NO YES CAN‟T SAY

NO YES YES YES YES

NO YES NO CAN‟T SAY CAN‟T SAY

NO YES YES CAN‟T SAY CAN‟T SAY

NO YES CAN‟T SAY CAN‟T SAY YES


NO YES YES CAN‟T SAY YES




NO YES NO CAN‟T SAY YES

NO YES YES YES YES

NO YES YES YES YES

NO YES NO NO CAN‟T SAY

NO YES YES YES YES


NO YES YES YES YES




NO YES YES YES YES

CAN‟T SAY YES CAN‟T SAY CAN‟T SAY YES

CAN‟T SAY YES NO CAN‟T SAY YES

NO YES YES YES YES

CAN‟T SAY YES NO CAN‟T SAY YES



CAN‟T SAY YES CAN‟T SAY CAN‟T SAY YES

YES YES YES YES YES

YES YES NO YES CAN‟T SAY

NO YES YES YES YES

CAN‟T SAY CAN‟T SAY YES YES YES

NO YES YES YES YES

YES NO NO YES YES

YES NO NO NO CAN‟T SAY

YES NO NO YES CAN‟T SAY

YES YES CAN‟T SAY CAN‟T SAY YES


NO YES YES YES YES


YES NO NO NO NO



NO YES YES YES YES


YES NO NO NO NO


NO YES CAN‟T SAY YES YES

NO YES YES YES YES

YES NO NO NO NO

NO YES YES YES YES

NO YES YES YES YES

NO YES YES YES YES

NO YES YES YES YES


YES NO NO NO NO

NO CAN‟T SAY YES YES YES

NO YES YES YES YES

NO YES YES YES YES

YES CAN‟T SAY YES CAN‟T SAY CAN‟T SAY

NO YES CAN‟T SAY CAN‟T SAY CAN‟T SAY

NO YES YES YES YES


YES NO YES YES YES

NO YES YES YES YES

CAN‟T SAY CAN‟T SAY CAN‟T SAY CAN‟T SAY CAN‟T SAY

NO YES YES YES YES


NO YES YES YES YES

NO YES YES YES YES

NO YES YES YES YES


NO YES YES YES YES

YES NO NO NO NO

NO YES YES YES YES

NO YES YES YES YES

CAN‟T SAY YES YES YES YES

NO YES YES YES YES

NO YES YES CAN‟T SAY CAN‟T SAY

NO YES CAN‟T SAY YES NO




NO YES YES YES YES


NO YES YES YES YES

CAN‟T SAY CAN‟T SAY CAN‟T SAY YES YES

NO YES YES YES YES


CAN‟T SAY YES CAN‟T SAY CAN‟T SAY CAN‟T SAY

NO YES CAN‟T SAY YES CAN‟T SAY

YES YES YES YES YES


NO YES NO NO CAN‟T SAY

NO YES CAN‟T SAY YES YES


NO YES CAN‟T SAY NO NO

NO YES CAN‟T SAY NO CAN‟T SAY

CAN‟T SAY YES CAN‟T SAY YES YES

CAN‟T SAY YES NO YES CAN‟T SAY

NO YES YES YES YES


Appendix Eight: Time Line:

Task Objective Notes Dates

1 Preparation __________________ __________________

2 Dissertation Proposal Submission 05th May

3 Literature Review Collect Secondary Data 05th June – 01

st July

4 Methodology

Primary Data

Collection

Prepare Draft Questionnaire

Pilot Test Questionnaire

Carry Out Questionnaire

02nd

July

15th July

01st Sep – 14

th Sep

5 Data Analysis Analyse Data collected

Through Primary Research

20th Sep – 25

th Sep

6 Specification Specify Dissertation Structure 28th Sep – 01

st Oct

7 Start Writing Up Introduction

Literature Review

Methodology

02nd

Oct

04th Oct – 10

th Oct

12th Oct – 15

th Oct

8 Finish Writing Up Conclusion

Recommendations

References

Appendices

16th Oct – 18

th Oct

20th Oct – 22

nd Oct

24th Oct – 28

th Oct

30th Oct – 02

nd Nov

9 Review & Updating Review and Updating 03rd

Nov – 05th Nov

10 Finishing ________________________ __________________

11 Submission Printing & Binding

Submission

07th Nov

08th Nov


Appendix Nine: Filled Out Questionnaires: