| Corporate | | | DoT, TRAI lock horns over telecom licence cancellation | | | TT Correspondent | | 11 May 2011 | | |  Department of Telecommunications (Dot) and Telecom Regulatory Authority of India (TRAI) continue to spar over licence cancellation issue with the former is considering cancelling only 15 mobile licences, as against 69 suggested by the telecom regulator, for failure to meet network rollout requirements.
In November 2010, the ( Trai )) had recommended to the telecom ministry to cancel 69 telecom licences of five operators, including joint ventures of Telenor ASA, Emirates Telecommunications Corp and Sistema JSFC.
The cancellations pertain to licences issued in 2007-08 by telecom minister A Raja, who was sacked last year when his ministry was accused of selling licences and spectrum cheaply, possibly costing the government billions of dollars in revenue.
Two telecom department officials said the regulator's method of assessing network rollout was flawed and this would be communicated to it in the next few days.
In an internal note, the telecom department also points out that the regulator had not considered the delays in getting airwaves and clearances from the government departments when ascertaining whether companies had rolled out services as stipulated in their contracts. The department's note was reviewed by ET.
A pan-India telecom company has 22 licences, as it requires a separate permit for each region. Existing laws mandate mobile companies to provide commercial services in at least 10% of the district headquarters by the end of the first year.
The telecom ministry can impose a fine of 5 lakh a week on mobile phone companies for every circle for the first 13 weeks of service delay. The penalty rises to 10 lakh each for the next 13 weeks, and then to 20 lakh for delays up to 26 weeks.
If service rollout does not happen within 52 weeks of obtaining a licence, the company's permit can be cancelled and the spectrum that comes bundled be taken back.
The national auditor had slammed the ministry for not recovering 679 crore as penalty or liquidated damages from six new operators for missing the network rollout deadlines.
The telecom regulator had said in a report that 34 licences - two of Etisalat, 14 of Loop Telecom, 10 of Sistema Shyam, and eight of Uninor - should be terminated as these companies had not launched services.
The report also said another 33 mobile permits should be cancelled as these companies, which include Etisalat in 13 circles, Loop Telecom in five regions, Datacom (now Videocon) in 10 circles, Sistema Shyam in one service area, and Aircel in four service areas, had built skeletal networks with just a handful of customers to technically fulfill rollout obligations.
The department will also tell the regulator that it had obtained legal opinion, which concurred with its stance on cancellation of mobile permits.
Moreover, the department's draft communication to the regulator, which was reviewed by ET, also adds that the ministry has identified 145 mobile permits where operators had defaulted on rollout obligations.
Off these, only 15 have been identified for termination, which will be carried out after examining the replies of the mobile phone companies to show cause notices issued to them. The rest have been subjected to financial penalties, the draft communication adds.
In related development, the department will ask RCOM and Tata Teleservices to submit the rollout details of their GSM operations. Recently, when all new entrants were asked to provide rollout details and show cause notices were issued to them, these two companies, which have dual tech permits, had said that separate rollout obligations had not been imposed on them for their GSM operations. The DoT has turned down this argument. |
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