Govt collects Rs 73.73 cr penalty from new telcos

“Total penalty is about Rs 219 crore for missing roll-out obligations. We had generated demand for over Rs 78 crore of which the operators have submitted Rs 73.73 crore,” Telecom Minister Kapil Sibal told reporters here.

Etisalat DB, Loop Telecom, Uninor, Sistema-Shyam and Aircel are among the operators who have submitted the liquidated damages (penalty), the minister said, adding that more notices are going to operators.

Asked whether the matter would end with the payment of penalty or licences could still be cancelled, Mr. Sibal said: “A decision will be taken after due consideration.”

Etisalat DB Telecom, a Joint Venture between realty major Swan and UAE-based Etisalat, has paid Rs 9.9 crore for missing roll-out deadline in four circles. The company, however, stated that it was paying the penalty “under protest.”

Uninor, a joint venture between another realty player Unitech and Telenor of Norway, has also made payment but did not disclose the amount of penalty.

Uninor had said that various factors, including delay in clearances required for each site, new last minute pre-launch testing requirements and new equipment security clearance processes, came in the way of roll-out and were beyond the company’s control.

Sistema-Shyam, a CDMA mobile operator, has also paid about Rs 11 crore to the Department of Telecom (DoT) towards missing the roll-out obligations.

All operators are given 15-days time to respond to DoT’s notice for paying penalty. The DoT is hoping to get more money in the next few days when the 15-day period would lapse in the case of other service providers.

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

Total penalty cannot exceed Rs 7 crore per licensing area and the telecom companies get 52 weeks before their licences are cancelled.