Kapil Sibal slams DoT for penalty on telcos

Telecom minister Kapil Sibal Wednesday flayed the Department of Telecom (DoT) for levying heavy penalties on operators and asked it to resolve the issue with the companies in the next two months.

"The issue of penalty is a very serious issue. I have been talking about it for the last two years. I have been trying to persuade officials in my ministry to take a rational viewpoint on it. For every minor issue they impose a penalty of Rs.50 crore. It is entirely irrational," he said after holding an open house discussion with the industry players.

Sibal said if DoT continues with its current ways, he would give the power to levy penalty to the Telecom Regulatory Authority of India (TRAI).

In June, DoT has imposed Rs.650 crore penalty on Bharti Airtel for violating roaming norms in 13 service areas between 2003 and 2005.

Bharti Airtel CEO Gopal Vittal, who has present in the meeting, told the minister that the telecom companies needed clear guidelines on penalties imposed by the government.

"This has hurt the industry. Government gets no revenue, no money because all those penalties are stayed by court. The balance sheets of the companies are skewed for that reason," Sibal said.

He added: "They can't raise capital, they can't get investors to put in money. It hurts the national interest. Why should government officials do things that hurt the national interest?"

The minister clarified that the onus of resolving the penalty issue lies with the government.

"I am sure the officials in my ministry will apply their minds to every interaction and on the basis of that impose a penalty commensurate with the nature of the default. If they don't do that ... and I don't see any progress on that ... then I have to give this power to TRAI," Sibal said.

He described this levying of higher penalty as a mindset problem of the DoT officials. "They impose higher penalty because they feel if they impose lesser penalty they will be prosecuted for benefiting the operator."

In July, DoT slapped Rs.549 crore penalty on Vodafone for using third-generation spectrum in 11 service areas, which were allocated to another company, through intra-circle roaming (ICR) agreements.

The minister said the policy for merger and acquisition in the sector would come by this month-end.