Govt collects Rs 309 cr penalty from new telcos

The government has collected Rs 309 crore in penalties from new telecom service providers that failed to roll out their networks within the stipulated timeframe after getting licences and spectrum.

"As of today (Monday), we have received Rs 309 crore penalties, as against total claim of Rs 370.55 crore," a source in the know said.

The Department of Telecommunicatins (DoT) had issued 119 notices to new telecom operators for missing their network roll-out obligations last month and imposed hefty penalties.

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

The operators were supposed to pay the penalty for missing roll-out obligations within 15 days of the notice, but some of these companies had moved the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) over the DoT's move.

TDSAT had subsequently asked Uninor, Aircel subsidiary Dishnet Wireless 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 licence.

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

In case the new licencees failed to roll out services within the stipulated period, the DoT was entitled to impose LD on the operators, or even cancel their licences, as per the agreement.