The Department of Telecommunications (DoT) is considering cancelling only 15 mobile licences, as against 69 suggested by the Telecom Regulatory Authority of India (TRAI), for failure to meet network rollout requirements.
Prior to this, in November 2010, TRAI had recommended cancelling 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 former minister of telecommunications and IT, A. Raja.
In an internal note, DoT said that the regulator’s method of assessing network rollout was flawed and this would be communicated to it in the next few days. Also, it pointed out that the regulator had not considered the delays in obtaining airwaves and clearances from the government departments when ascertaining whether companies had rolled out services as stipulated in their contracts.
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 per cent of the district headquarters by the end of the first year.
DoT can impose a fine of Rs 0.5 million a week on operators for every circle for the first 13 weeks of service delay. The penalty rises to Rs 1 million each for the next 13 weeks, and then to Rs 2 million for delays up to 26 weeks. If service rollout does not take place within 52 weeks of obtaining a licence, the company’s permit can be cancelled and the spectrum that comes bundled would be taken back.
Earlier, TRAI had said that 34 licences (two of Etisalat, 14 of Loop Telecom, 10 of Sistema Shyam TeleServices Limited, and eight of Uninor) should be terminated as these companies had not launched services. It added that 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 TeleServices Limited 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.
DoT will also tell TRAI that it had obtained legal opinion, which concurred with its stance on cancellation of mobile permits. Moreover, DoT?s draft communication to the regulator also adds that it has identified 145 mobile permits where operators had defaulted on rollout obligations.
Of these, only 15 have been identified for termination, which will be carried out after examining the replies of the operators to show cause notices issued to them. The rest have been subjected to financial penalties.
