Telecom Minister A Raja, who is convinced that an 'undeclared cartel' existed before he assumed office last year, is likely to initiate an enquiry into denial of spectrum to new players prior to 2007 and precious revenue to the exchequer.

The department of telecommunication had for long been maintaining that there was no surplus spectrum and had even told Raja that no radio frequency was available to accommodate new players.

However, after he took over as telecom minister in May 2007, Raja decided to immediately issue new licenses for mobile services.

But efforts to do so were met with opposition, including from GSM mobile operators led by Cellular Operators Association of India.

It was only after Raja and his team threatened to refer the case to CBI to find out about the spectrum availability, sources said that the senior officials in the DoT started giving information about demand and supply of spectrum.

After this, Raja oversaw the allocation of over 470 MHz of spectrum (radio frequency) to new players across the country, as well as existing GSM operators like Bharti, Vodafone and Idea.

DoT sources said that vested interests were now trying to mislead the public about the latest round of spectrum allocation, saying that it should have been auctioned to get the right/market price for scarce natural resource.

Whereas Raja has maintained that spectrum has been allocated to new players at the same terms and conditions and prices as has been given to existing players as late as in 2007.

Senior officials indicated that the ministry was thinking in terms of a detailed probe to get to the root of the problem.

According to sources, government has lost huge money in the form of licence fee at rate of Rs 1,658 crore (Rs 16.58 billion) for all-India operations and annual spectrum user charges, as new players were not allowed to enter the GSM mobile telephony prior to Raja's appointment last year under the pretext that spectrum was not available.

On the fresh controversy after two new players sold equity in their ventures at a huge premium, Raja had said that there was no scope for any controversy as he followed the existing regime and issued new licence as per norms prescribed by the Telecom Regulatory Authority of India.

Although Raja did not name anybody as part of the 'undeclared cartel', he has hinted at the involvement of existing GSM service providers.