DoT's Rs 2.5 cr fine on Tikona for delay in roll out of broadband service

The company deposited the penalty on October 25. Thereafter, its rollout was cleared: Source

The DoT has imposed a penalty of Rs 2.5 crore on Tikona Digital for delay in network roll out of wireless broadband service in Rajasthan, while clearing its spectrum deal with Bharti Airtel which has bought the company.

The Department of Telecom (DoT) has imposed the penalty using its discretionary powers as per the rules similar to 3G networks. Tikona was able to complete the rollout obligations with a delay of about three months.

As per the Broadband Wireless Auction rules of 2010, all the successful bidders are required to complete network roll out for BWA services within five years of effective date of spectrum allocation, failing which the spectrum can be withdrawn by the DoT.

"For delay in rollout obligation a show cause cum demand notice was issued to Tikona Digital for imposition of penalty of Rs 2.43 crores which equivalent to 2.5 per cent of the successful bid amount in Rajasthan circle on October 23. The company deposited the penalty on October 25. Thereafter, its rollout was cleared," an official source told PTI.

He further said: "After this permission for Tikona, BWA spectrum trading with Airtel was granted."

He said Tikona had to complete the roll out of the BWA spectrum within five years from November 19, 2010 but could do so in Rajasthan only by February 11, 2016.

A query sent to the DoT on the issue elicited no reply.

An official explained however that the department had taken legal advice before clearing the company's rollout.

He said that DoT imposed highest penalty that could be levied as per the rules.

When contacted, a Bharti Airtel spokesperson said the DoT has rightly rejected a malicious campaign while granting the permission to Tikona to trade 2300 MHz spectrum in Rajasthan.

He said: "We strongly debunk the false and mischievous campaign being driven by the forces that had previously opposed the acquisition of Tikona.

"These same forces are at work again to block the availability of 4G spectrum to others. Their objective is to thwart any competition in the 4G space."

He added that the move will also generate additional revenue to the national exchequer through enhanced License Fee and Spectrum Usage Charges.

"Spectrum is a national asset and once acquired in auctions and paid for, should be put to service for the benefit of customers and achieve the vision of Digitally empowered India.

"As a responsible corporate following the highest standards of governance, we are in complete compliance of all regulations," the Airtel spokesperson said.

Tikona Digital had purchased BWA spectrum in 5 circles for Rs 1,058.2 crore in 2010 auction of radiowaves. It had paid Rs 97.32 crore at that time for BWA spectrum in the Rajasthan circle.

Later, Bharti Airtel acquired Tikona and completed the acquisition in August end.