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INDIA BUSINESS WORLD - 1st FEBRUARY - TO - 15th FEBRUARY - 2009
GOVT TO SLAP RS 477-CRORE FINE ON TELCOS
THE communications ministry will soon impose a combined fine of Rs 477.15 crore on all telcos—existing operators and well as new licensees—for failing to meet their roll-out obligations. As per the licence conditions, all operators are scheduled to launch services, in a phased manner in pre-determined geographical areas within a stipulated time frame.
The current norms say any player who gets the government’s nod to launch mobile services must ensure that services are available in at least 10% of the districts in that circle or area within the first year of getting the licence, and 50% of the districts within three years. All operators have failed to fulfill this criteria, especially in the smaller towns and cities, where their network rollouts have happened at a slower pace.
Additionally, all the new telecom licensees which include the likes of Loop, Unitech, Datacom, S Tel, Shyam-Sistema and Swan have failed to honour their rollout commitments. These companies were mandated to roll out services in at least 10% of the districts in the circles or area within the first year of getting the licence. As these companies were issued licences on January 25, 2008, they were required to meet their initial rollout obligations by January 25, 2009. Under existing norms, the department can fine telcos to the tune of Rs 5 lakh a week for the first 13 weeks of delay and Rs 10 lakh for the next 13 weeks. After this, the penalty is Rs 20 lakh for up to 26 weeks.
The DoT move comes as telecom minister A Raja has shot down department’s proposal to relax the rollout obligations. The DoT had proposed that only the three-year clause of coverage of 50% of the districts be retained and the rollout criteria for the first year be done away with.
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