Govt collects Rs 216 crore in penalties from new operators

The government has collected nearly Rs 216 crore in penalties from new telecom service providers for not rolling out their networks within the stipulated timeframe after getting licence and spectrum.

"We have received Rs 215.6 crore as liquidated damages from the new service providers for missing out roll-out obligations out of total Rs 342.6 crore demand till January 21," Telecom Secretary R Chandrasehkar told PTI.

The DoT had issued 119 notices to new telecom operators for missing their network roll-out obligations last month and imposed hefty penalties on them.

He further added, "The companies who had moved to TDSAT are also expected to pay this (liquidated damages) as soon as possible."

As per sectoral regulator Trai's guidelines, in case showcause notices were issued for cancellation of licences, the operators would be given 60 days time to respond to the notices before a final decision is taken.

In the case of penalties imposed for for missing roll-out obligations, the operators were supposed to make payment within 15 days of the notice.

As per the conditions of the licences, the licencees were required to roll-out their services in 90 per cent of service areas in metros and 10 per cent in district headquarters within 12 months (52 weeks) from the date of award of licences.

Earlier, telecom tribunal TDSAT had asked Uninor and Videocon Telecom to pay a part of the penalty imposed on them for missing their roll-out obligations.

TDSAT's interim order followed a plea from Videocon challenging the demand notice issued by the DoT, which sought liquidated damages (LD) over the telecom firm's failure to roll out services within the stipulated period of one year after the grant of a licence.

The DoT had issued the notices to Videocon on January 1, demanding LD for four circles.

In a similar case, TDSAT had directed Uninor to pay 60 per cent of the penalty amount demanded by the DoT over the service provider's failure to roll-out services in 18 circles.

As per the conditions of the Unified Access Service Licence (UASL), the telcos are required to roll-out their networks within one year from the date of allocation of spectrum.

According to the agreement, in case new licencees fail to roll-out services within the stipulated period, the DoT is entitled to impose LD on the operators, or even cancel their licences.