Bharti and Vodafone offices raided as part of Indian spectrum favouritism probe

India’s Central Bureau of Investigation (CBI) raided the premises of local operators Bharti Airtel and Vodafone Essar over the weekend as part of a widening probe into alleged irregularities in spectrum allocation made under previous governments.

Reuters reports that the CBI has registered cases against the two operators and two former telecoms ministry officials, among others. The case relates to alleged irregularities in spectrum auctions under the previous government (formed by the Bharatiya Janata Party, which is now in opposition), which stands accused of showing “undue favour” to some operators and costing the government about INR5.08 billion (US$98 million) in lost spectrum revenue between 2001-2007.

The CBI said the former telecoms ministry officials (with approval of the then-telecoms minister Pramod Mahajan, who died in 2006) took an alleged “hurried decision” in 2002, to grant additional spectrum beyond 6.2MHz to the two operators in violation of the report of a technical committee.

According to Reuters, Bharti Airtel said over the weekend that all spectrum allocated to it had been in line with government policy, while Vodafone said its documents were in “complete compliance with the governing laws.” However, the report notes that shares in Bharti – India’s largest mobile operator – fell as much as 3.6 percent this morning following news of the CBI probe.

The latest investigation comes on the back of a high-profile investigation by India’s Supreme Court into the separate (and much more serious) licensing scandal concerning the sale of 2G spectrum in 2007 and 2008, which is estimated to have cost the government up to US$39 billion in lost potential revenue. Reuters notes that a trial recently began in this case, which involves a former telecoms minister, a lawmaker and several other government and company officials.