DoT rejects plea for leniency on service rollout

In a move that will not augur well for companies which have been awarded 2G licences recently, the Department of Telecommunications (DoT) has rejected proposals by new telecom entrants for a relaxation of rollout obligations.

On the other hand, the operators say their proposals have been “misinterpreted” and they would move the DoT once again, and, if needed, the telecom regulator.

The Indian telecom licensor, which had earlier rejected an application by Swan Telecom, has decided to reject all such proposals pending before the department.

All the new operators will have to comply with the rollout obligations, sources close to the development said.

The DoT is of the opinion that there is no change or relaxation in rollout obligations and the licensees have to fulfil obligations as specified under clause 34 of the Universal Access Service Licence (UASL).

UASL states that the companies should cover 10 per cent of district headquarters in the first year of operations and 50 per cent within next three years. Videocon subsidiary Datacom Solutions, Swan Telecom, Unitech Ltd, Essar group company Loop Telecom, STel and Shyam Telelink are the new players who have been awarded licences.

The operators say that they had told the DoT that it should seek rollout obligations becoming effective from the date of spectrum allocation, rather than the date of issue of licence. The DoT had considered the date of licence allocation, rather than the spectrum allocation date, for rollout obligations.

A senior executive of a new GSM operator said, “We are not seeking relaxation or leniency in the existing policy, but what we are asking is that rollout obligations should begin only with the date of spectrum allocation”.

“This is detrimental as many companies that have received licences are yet to be allocated spectrum. The department or the ministry is not giving any time frame for spectrum allocation,” CEO of another telecom service provider said.