Alarmed by the gross violation of subscriber verification norms, the government considers a maximum penalty of up to Rs 50 crore (Rs 500 million) per circle, which is applicable to operators for licence condition violations.
"We are waiting for the operators reply on the issue. A maximum penalty of Rs 50 crore can be imposed on the operator for violating the subscriber verification process depending on the circumstances and nature of this violation," officials said.
During a special drive conducted by the licensor to ascertain the status of subscriber verification by service providers in compliance with the licence conditions, DoT said a Rs 50 crore penalty per circle can be imposed if licence conditions are found to be violated. Providing quick connections without verifications to capture more subscribers would be seen as a violation of the licence clauses.
In its July 17 order, DoT had said in case an operator is found to be providing telephone connections without proper verification of subscribers, the operators will be issued a showcause on why appropriate action including imposition of penalty should not be be taken.
Now all operators, both GSM and CDMA, have time till July-end to individually reply to the government why action, including a penalty imposition, should not be taken against them for violation of the licence agreement.
The issue has now taken a different turn as the industry is divided on how this verification process should actually take place. While the Tatas insist on 100 per cent verification process, cellular operators want 10 per cent sample base to be verified to arrive at a conclusion for the entire subscriber base.
Cellular players said 100 per cent verification is impractical and will incur heavy costs.
But with the DoT awaiting the operators' reply, the home ministry is understood to be against any sampling method of verification. It too wants a 100 per cent verification in keeping with security reasons.
In 2004, DoT had reiterated and directed all licensees that all telephone connections must be provided only after proper verification of the customers.
The department said during a special drive conducted by the licensor to ascertain the status of subscriber verification by service providers in compliance with the licence conditions, it has been noticed that the companies have failed to comply.
DoT's concern comes in the wake of large scale fake connections as well documents which are a violation of licence conditions besides posing a security threat.
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