CAG faults DoT for failing to recover Rs 679 cr penalty

Government auditor CAG has pulled up the Telecom Ministry for not recovering Rs 679 crore as penalty or liquidated damages from six new operators for missing the network roll-out schedule as per the licence.

Out of 122 Unified Access Service (UAS) licences awarded in 2008, as many as 85 licences were given to the six new entrants to the telecom sector. The audit found that none of them had rolled out services as per the provisions of licence.

These six companies are Unitech (brand name Uninor), Swan (name changed to Etisalat), Allianz (since merged with Etisalat), Datacom (name changed to Videocon), S Tel and Shipping Stop DoT Com (name changed to Loop Telecom).
    
As per the conditions of the UAS licences, these licensees were required to roll out the services in the 90 per cent service area in metros and 10 per cent district headquarters in other service areas within 12 months of the date of award of licences.
    
Audit found that though these six new operators obtained the initial 4.4 Mhz spectrum in 81 service areas during the period April 2008 to January 2009, none of them had rolled out their services as required in any service area till December, 2009.
    
"DoT also failed to recover Liquidated Damages and penalty of Rs 679 crore from these six operators for inordinate delay in the rolling out of services till December 31, 2009," the CAG report said.
    
Since there were many existing telecom licensees in dire need of this scarce natural resource (spectrum), it resulted effectively in hoarding of the finite natural resources of the nation by these operators, it added.
    
DoT did not earn any revenue from this natural resource during 2008-09 and 2009-10 due to inordinate delay in the commencement of services by these operators, the auditor said.