Dot To Withdraw Licence If Basic Firms Transfer Rights
The Department of Telecommunications (DoT) has said it will withdraw the licence issued to a basic telecom services operator if it assigns or transfers its rights or enters into an agreement for sub-licence or partnership with a third party without DoTs prior written consent.
A DoT notification issued yesterday said the licensee could farm out jobs for the installation of systems, equipment and network. However, under no condition, could it contract out the right to provide the service itself.
The notifications revises certain clauses of the tripartite licence agreement between DoT, the service providers and the banks and financial institutions.
The agreement also permits the licensee company to mobilise external commercial borrowing up to twice the amount of foreign equity. This limit applies to both short-term and long-term financing.
However, the notification said, the licensee would have to comply with the restrictions imposed by theReserve Bank, Sebi or the finance ministry or any other statutory authority on local borrowings.
According to the revised clause on force majeure (an unforeseeable course of events that prevent a person from fulfilling the contract), no party will be entitled to terminate the licence or claim damages in case of non-fulfilment of the contract or delay by reason of war, or hostility, acts of the public enemy, civil commotion, sabotage, fire, flood, Act of state or direction from statutory authority, explosion, epidemic, quarantine restriction, strikes and lock-outs, or act of God, provided the notice of such an event is given within 21 days of its occurrence.
However, service under the licence will have to be resumed as soon as practicable. The decision of DoT regarding whether the service can be resumed (and the timeframe for its resumption) will be final.
Force majeure (except those above mentioned) will not cause extension of the period of licence, and will not be a ground for non-payment of licence fee.
In the event of war, act of God and directions from statutory authority for stoppage of work or service, the payment of licence fee shall be exempted to the extent payable for the period covered by such an event... and there will be a fair and reasonable extension up to the corresponding period in the licence period, says the revised agreement. The decision of DoT regarding the period covered by the event will be final.
A dispute, except those covered elsewhere in the agreement, will be referred to an arbitration tribunal consisting of three arbitrators. DoT and the licensee will appoint one arbitrator each. The two arbitrators will then appoint the third arbitrator within 15 days of their appointment. If the first two fail to agree on the third, the relevant high court will appoint the third arbitrator.
The venue of arbitration will be either New Delhi or a place in India fixed by the tribunal.
DoT reserves the right to unilaterally modify at any time the terms and conditions of assignability, force majeure or arbitration in the interest of general public. However, it will take into consideration the objections of the licensee.