Corruption in Indian Telecom Industry
India has been rocked by numerous new corruption scandals and scams in the recent past. One of the biggest was the 2G Telecom Scam in which top ministers and leaders of the ruling party were involved. The 2G Scam resulted in cancellation of licenses of a number of companies which included foreign telecom giants like Telenor, Etilisat and others. While the guilty have managed to get bail in the cases as is the norm in India, thousands of job losses are happening as a result of the court rulings. Some of the companies have shut their operations while others are drastically reducing their operations.
The Telecom industry in India provides jobs to hundreds and thousands in low skill work like maintenance, distribution and marketing. Now investment and job creation in the telecom industry has gone into reverse, thanks to the corruption perpetrated by the politicians and bureaucrats in the country. Note the legal system in the country has failed time and again to put the big fish in jails despite massive public anger and media spotlight in these cases.
The CBI will charge India’s top conglomerates, the Essar Group and Relaince ADAG with criminal conspirary and cheating in the multi billion dollar 2G Telecom Licenses Scandal. This Corruption Scam was brought directly under the control of the Supreme Court as the Government failed to move against powerful businessmen and politicians. Now the investigative agencies which have broken free from the ruling party’s interference have given the status of the investigation to the Court. The CBI has said that the 2 companies Loop and Swan Telecom were used as front companies by established telecom operators Essar and Reliance Communications to get more license. Note this defeated the entire exercise and there is ample circumstantial evidence to prove that the telecom minister Raja and his cronies connived with the companies to give precious spectrum for a song. Massive kickbacks were given through real estate companies like DB Realty whose top billionaire owners are cooling their heels in jail as well.
It remains to be seen whether the top corporate executives of India’s topmost conglomerates get prosecuted over these wrong doings. Essar and ADAG are amongst the top 10 conglomerates in India with wide ranging operations with billions of dollars in revenues nationally as well as internationally. The Supreme Court has been instrumental in bringing this case so far as the Government seems totally co-opted by corruption. It has been frequently castigated by the Supreme Court and has shamelessly defended corrupt bureaucrats and politicians. It remains to be seen how this 2G Telecom Case ends. If justice is done, then it may provide a new chapter to India’s corruption ridden story till now.
The largest Nordic mobile operator plans to cut its India workforce by scaling down GSM operations in four regions – Tamil Nadu, Kerala, Karnataka and Odisha – out of the 13 zones where it is commercially active in its bid to unlock and reallocate funds to more profitable regions, amid the continuing policy uncertainty on the sale of 2G airwaves.
“Uninor has around 400 direct employees across Odisha, Kerala, Karnataka and Tamil Nadu. As it gradually scales down in these circles, it will also evaluate possibilities of relocating some of the employees to other Uninor circles and also provide assistance in securing employment outside the company,” said Tor Odland, vice-president (group communications), in a written response to ET’s email query on the details of the India workforce reduction exercise.
But the Telenor spokesman confirmed that apart from impacting 400 direct Uninor employees, it would also hit 1,600 indirect employees, together “accounting for around 2,000 of (Uninor’s) 17,500-strong workforce”. Telenor Group CEO Jon Fredrik Baksaas claimed the latest restructuring of its Indian unit would help it achieve cash-flow break-even before end-2013.