DoT says it won’t cancel any telecom licences

DoT says it won’t cancel any telecom licences

New Delhi: The department of telecommunications (DoT) will not cancel any of the telecom licences and spectrum given to operators in January 2008, for now, but is looking at ensuring that losses made due to alleged faulty procedures prior to 2008 be rectified as much as possible.

“We cannot cancel the licences based on the procedure followed by the government at the time. We are, however, looking at whether it is possible to discover a new price for the licences. This will be higher, so we will have to ask the operators to pay the difference," a DoT official said on condition of anonymity. “There is scope for renegotiation of the licences and we will make every effort to get back the money that the government has lost."

On Thursday, the Telecom Regulatory Authority of India (Trai) had written a letter to DoT recommending that around 70 licences be cancelled due to non-compliance of roll-out obligations stipulated in licence agreements.

According to Trai data on subscriber numbers as of end -August, Videocon, Etisalat DB and Loop had no or negligible subscribers in a majority of the circles they held.

“We cannot cancel the licences on the basis of what should have been done by the earlier regime. Agreements have been signed with the operators," another DoT official said. “But we cannot be unfair to genuine companies."

“We are looking into the recommendations by Trai. The guilty will be heavily penalized, but we cannot allow the consumer or the industry to be affected. The sector is a vital source of government revenue," the second official added.

All the new operators got spectrum in nearly all the circles they won as soon as they signed their licences almost three years ago, in January 2008.

The development comes as a consequence of the Comptroller and Auditor General of India (CAG) report submitted on Tuesday, on the controversial second generation mobile spectrum allocation.

The report alleges that policies followed by DoT under former communications minister A. Raja led to a loss of between 50,000 crore and 1.76 trillion to the exchequer. Besides allotting the spectrum at “throwaway" prices, DoT gave licences to companies that did not qualify.

CAG has asked that the 121 licences, issued to nine operators in January 2008, be cancelled due to the alleged wrongdoing.

“This may lead to many of the new operators surrendering their licences in some circles due to the inability to start operations or the operations not making commercial sense. This, in turn, could lead to more spectrum being available in the country and quality of service improving significantly," a Mumbai-based analyst with a multinational brokerage firm said on condition of anonymity as he is not allowed to speak to the media. “The government may also allow mergers and acquisitions in the sector in order to clean up the mess."