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How The Agreement Contradicts The PMO

The PMO claimed "no decision was taken by the Government to allocate space segment using S-Band Spectrum to Antrix or Devas". The documents published by the Hindu tell their own story. Clearly, the PM has a lot to explain.

How The Agreement Contradicts The PMO
outlookindia.com
-0001-11-30T00:00:00+0553

The PMO issued the following statement on Feb 8, 2011:

This office has seen reports alleging loss of Government revenue in a contract entered into by ANTRIX and Devas Multimedia Pvt. Ltd. due to lease of space segment capacity which would use S Band Spectrum. The Comptroller and Auditor General’s office and the Department of Space have already issued statements stating the factual position on the matter. It is further clarified that no decision has been taken by the Government to allocate space segment using S-Band Spectrum to ANTRIX or Devas. Hence, the question of revenue loss does not arise and any such reports are without basis in fact.

This was in response to the Hindu's front-page reports on Feb 7, 2011, CAG goes after another spectrum deal by Madhumathi D.S. & Thomas K. Thomas which charged:

BANGALORE/NEW DELHI: Hard on the heels of its explosive investigations of the 2G spectrum allotments made in 2008 by the Department of Telecommunications, the Comptroller and Auditor General (CAG) has started inquiries into a 2005 agreement between the Indian Space Research Organisation's commercial arm Antrix Corporation Ltd. and Devas Multimedia Private Ltd.

The agreement relates to ISRO's launching of two satellites for Devas but automatically bestows on the latter a large hidden benefit: unbridled use of 70 MHz of the scarce S-band spectrum over a 20-year period.

ISRO is under the Department of Space (DoS), which is directly in the Prime Minister's charge.

Business Line learns that according to preliminary CAG estimates, this spectrum largesse to a private customer could have caused the exchequer a loss in excess of Rs. 2 lakh crore. According to the contract with Devas, Antrix would have earned $11 million a year per satellite for 12 years.

By comparison, the presumptive loss incurred in the allocation of 2G spectrum by the DoT, as estimated by the CAG, is Rs 1.76 lakh crore.

The more serious charge, apart from the loss of revenue was:

It is the first time the S-band, which ranges from 2500 to 2690 Mhz, has been opened up to the private sector. And this has been done on the quiet.

The paper also explained: What's the big deal about S-band?

In response to the PMO's statement, the Hindu pointed out today:

According to the terms of contract made in January 2005, Antrix represented that it has the power to enter into and perform this Agreement (the agreement to deliver space segment communication capacity). The contract was to deliver to Devas a leased capacity on the primary satellite, five transponders of 8.1 MHz each and another five transponders of 2.7 MHz capacity, within a period of 36 months (including a grace period of six months).

In satellite communications the grant of transponder is tantamount to allocation of spectrum, as they are designed to work at specific frequency bands. In this case, as and when the transponders are allotted in the S-Band, it follows that spectrum in the 2500 MHz band would be allotted. This is akin to the way DTH operators are given transponders for broadcasting.

When a Tata Sky, Dish TV or other DTH operator is offered a transponder, it is essentially offered frequency in the Ku band, which is a different set of radio frequencies.

Termination clause

The Government has also contended that there is no revenue loss from the legal arrangement between Antrix and the private company. The extent of revenue foregone may be open to interpretation.

However, for the government to contend that there is no financial loss whatsoever is clearly at variance with the financial penalties that Antrix is liable to pay out, and hence, by extension, the government, for any default in the timely delivery of promised transponder capacities.

The full text of the Antrix-Devas agreement and its exhibits follows:

Antrix_Devas_20110209

And Annexure to the above agreement:

Devas Exhibits 20110209

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