The government does not seem inclined to cancel 2G spectrum licences of telecom operators who have failed to meet their roll-out obligations. The Department of Telecommunications (DoT) has told the Supreme Court that as many as 103 of the 122 2G licencees have failed to roll out services and offered to impose penalties on the errant companies instead of cancelling the agreements altogether.
 
Responding to the two petitions filed by the Centre for Public Interest Litigation (CPIL) and Janata Party president, Subramanian Swamy – who demanded fresh auction of licences. However according to DoT, the demand for cancellation of all allocations in 2008 at 2001 prices and their fresh auction could jeopardise foreign direct investments already made in the sector and suggested that levying penalty on them was the right course of action
?If a licence is to be cancelled after it is acted upon, only on account of delayed rollout, the investment made in infrastructure etc would be rendered nugatory, which may not be in public interest. That is why the licences provide for imposition of monetary penalty,? noted DoT release.

 

According to DoT, the demand for cancellation of all allocations in 2008 at 2001 prices and their fresh auction could jeopardise foreign direct investments already made in the sector and suggested that levying penalty on them was the right course of action

DoT further added that in response to cancellation of licences and penalty notices, the licencees have pointed out that the start of services have got delayed in other countries as well. However, this could invite monetary penalty and not cancellation.

In early 2011, DoT issued liquidated damages demand notices after ascertaining the delay in meeting the roll out obligations, considering the date of allocation of spectrum and after looking at the average delays according to the Standing Advisory Committee on Frequency Allocations (SACFA).

Some of the licencees who got the notice, have moved to the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) challenging the demand notices imposing liquidated damages and have got an interim orders. The firms to which these notices were issued include Dishnet Wireless, Etisalat, Vodafone, Idea Cellular, STel, Tata Teleservices, Uninor, Loop Telecom, Videocon Telecommunications limited and Sistema Shyam Teleservices.