DoT set to penalise telcos over delays

Licence cancellation ruled out citing hardship to users

Sources privy to the Department of Telecom (DoT) said it may decide on a report by the Telecom Regulatory Authority of India (TRAI) that recommended the cancellation of about 69 licences awarded to five operators, including Etisalat, Uninor and Videocon, by former Telecom Minister A Raja in January 2008, over the non-fulfilment of roll-out obligations.

The regulator had recommended that the licences should be cancelled for at least 15 circles given to Etisalat, a company earlier known as Swan Telecom, which the CAG has dubbed a front company of the Anil Ambani group, besides 10 circles given to Sistema-Shyam.

Sistema-Shyam, a joint venture between the Shyam Group and Russian giant Sistema, claims to have rolled out services in all 22 circles where it has licences, with over seven million subscribers in its kitty.

Similarly, Uninor—a Unitech and Telenor of Norway collaboration — has rolled out services in 12 circles and is in the process of starting services in other areas.

As per the licence conditions, the licencees were required to roll-out services in 90 per cent of service areas falling in metros and 10 per cent in the district headquarters of other service areas within 12 months from the date of award of licences.

However, when asked whether the DoT may initiate action to cancel the licences, sources said cancellation may not be a viable solution as this would cause hardship to the customers.

Instead, new Telecom Minister Kapil Sibal may ask these firms to cough up more money to compensate the loss, if any, to the exchequer.

Already, the Telecom Ministry has proposed imposing a penalty (or liquidated damages) of Rs 135.60 crore (which was reduced from Rs 445 crore) on  old operators, including Bharti Airtel, Tata Teleservices, Reliance Communications, Aircel and others. The two telecom PSUs— BSNL and MTNL — and Vodafone-Essar face no penalty.

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