Old telcos may have to pay for missing roll outs

After penalising new operators for not rolling out services on time, the Telecom Ministry may now turn the heat on incumbent players, who are yet to pay Rs 135 crore (Rs 1.35 billion) as Liquidated Damages, for similar lapses.

"Wherever there have been delays in the network roll-out, the Liquidated Damages to the extent of liability on the account of delays will be levied if not already levied," Telecom Secretary R Chandrasekhar told PTI when asked whether old operators would also be asked to pay.

The Telecom Ministry had earlier proposed imposing a penalty (or Liquidated Damages) of Rs 477 crore (which was later reduced to Rs 135.60 crore) against old operators, including Bharti Airtel, Tata Teleservices, RCom, Aircel and others.

The penalty was lowered after several representations by the old operators, who said that roll-out obligations should come into effect from the date of allotment of spectrum and not from the date of issuance of licences.

They also claimed that statutory clearances came through late, which caused cascading delays in the roll-out of services.
As per the revised figures, Bharti Airtel faces a penalty of Rs 31 crore (Rs 310 million), while the Tatas (CDMA operations) are likely to be asked to be pay liquidated damages of over Rs 40 crore (Rs 400 million).

While this remains unpaid, the government has collected more than Rs 110 crore (Rs 1.1 billion) from the new operators against a total demand of Rs 218 crore (Rs 2.18 billion) showing them the stick. "... There is no question of some operators having to pay and some not having to pay, that question doesn't arise," Chandrasekhar added.

The DoT had issued 119 notices to new telecom operators for missing out the network roll-out obligations and levied penalties on them, last month.

Replying to a question on the issue of cancellation of licences in case of old and new telecom operators, the Telecom Secretary said, "as far as the cancellation is concern that is a separate question, no decision has been taken at the moment in any of these cases. We are examining the issue of whether the notices for cancellation would be issued with respect to those cases where the roll-out delay has exceeded 52 weeks."

In case show cause notices were issued for cancellation of licences, the operators would be given 60 days time to respond to the notices before a final decision was taken.

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