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Telecom Minister Andimuthu Raja Resigns

Telecom Minister, who has faced intense criticism and been accused of corruption in the arbitrary handing out 2G telecom licenses in 2008, has finally handed in his resignation. While no announcement has been made yet about his resignation, and it is not clear whether the Prime Minster of India has accepted Raja’s resignation, it is likely that DMK chief M Karunanidhi’s daughter Kanimozhi will take over the ministry.

Raja’s resignation comes on the back of increased pressure from the press, following the resignation of (now former) Maharashtra Chief Minister Ashok Chavan, and Commonwealth Games Organizing Committee Chairman Suresh Kalmadi, both of whom face allegations of corruption. Raja’s case, which involved the allocation of licenses according to an arbitrary cut-off application deadline which benefited a few players (with no clear explanation of why other applicants were excluded), and at the 2001 price of spectrum at Rs. 1650 crore.

In an interview with the Hindu published yesterday, Raja, who went on a defensive overdrive as the pressure on him to resign increased, said that the spectrum could not be auctioned because “the National Telecom Policy 1999, a document approved by the Union Cabinet and ratified by Parliament, says so.” Raja puts forth a fairly strong defense of his policies, though I’m not quite convinced by his answer regarding the cut-off dates.

There are also reports which feature recordings of conversations allegedly between Raja and corporate lobbyist Nira Radia, with discussions regarding lobbying for the position of Telecom Minister, reported to have been recorded by the Income Tax department:

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On twitter, I was asked whether Raja’s policies can be considered consumer friendly. Sure, since the allocation of additional licenses, price of calls have come down, and that has benefited customers. Price shouldn’t be the only metric under consideration: apart from Tata Docomo, the biggest gainers due to this drop in prices are the incumbent telecom operators. Spectrum allocated to new telcos is either under utilized or unutilized, while the incumbent telecom operators are still starved for spectrum, and call drops and quality of service issues persist. That isn’t particularly customer friendly, even though this reasoning could seem to be a bit of a stretch.

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