Heat on 83 licensees for tripping on services

BS Reporter / New Delhi Sep 04, 2011, 00:02

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The Department of Telecommunications (DoT) has decided to send show-cause notices to 83 new licensees suggested by the Telecom Regulatory Authority of India (Trai), for the cancellation of licences on account of failure to meet roll-out obligations.

This is a complete U-turn in the department’s stand. DoT had asked the telecom regulator last year to reconsider its earlier recommendation in which it had recommended cancellation of 74 licences. It scaled down the number to 12 from 74 suggested by Trai. It expressed that 15 licences can be cancelled for missing roll-out obligations. These 15 licences included three licences that were not recommended by the regulator.

A senior official from DoT said the department would start sending notices to the 83 licensees, including the 12 to which it had already sent, from next week.

DoT has also sought the Attorney General’s (AG’s) view on the matter. However, it will not wait for the AG’s opinion but start sending notices. “The final action, however, will be taken considering the AG’s view and responses of the companies,” the official said.

If DoT decides to cancel the licences, the licensees are likely to challenge it before the Telecom Disputes Settlement & Appellate Tribunal, executives at some of the telecom companies concerned said.

After taking legal opinion of two retired judges of the Supreme Court, Trai has said 83 licences should be cancelled.

According to the roll-out conditions, mobile players have to cover 10 per cent of district headquarters within the first year of allotment of spectrum. They have to pay liquidated damages, if services are not rolled out within 52 weeks.

Thirty-eight licences were recommended for cancellation because operators failed to comply with the DoT stipulation of starting services in 10 per cent of the district headquarters and towns of a circle within one year of receiving spectrum. These included those belonging to new players — Loop Telecom (14 circles), Sistema (10), Uninor (8) and Etisalat DB (2). The only older player on the list is Aircel (4).

Trai had also pulled up 31 other licensees for poor coverage and inadequate cell towers, saying their licences also should be cancelled after taking legal opinion. Companies that fall in this category included Etisalat DB (13), Videocon (10), Loop Telecom (6), Aircel (1) and Sistema (1).