Telcos begin to pay penalties

Telcos begin to pay penalties

New Delhi: Two of the five telecom operators that were asked to pay a penalty to the department of telecommunication (DoT) for delaying the launch of their services said they had paid up.

Etisalat DB Telecom Pvt. Ltd and Unitech Wireless Ltd (Uninor) issued statements on Wednesday saying they have made the payments, albeit “under protest".

DoT had also served notices to Loop Telecom Ltd, Videocon Telecommunications Ltd and S Tel Ltd on 14 December, setting a 15-day deadline, which expired on Wednesday. Mint could not ascertain if these firms also paid the penalty.

Last month, the comptroller and auditor general said in a report that the five new entrants in India’s telecom sector had failed to meet their licence condition of rolling out services in 90% of the service area in metros and 10% in district headquarters and other service areas within 12 months of the date of award of licences.

The report also pointed out that DoT should have imposed a combined penalty of 679 crore on these companies by 31 December 2009.

Following the report, DoT sent show-cause notices to the five firms.

The statement from Etisalat DB said the company had received a communication from DoT, imposing a penalty aggregating to 9.9 crore covering roll out obligations for the first year in four telecom circles, or operating areas. Etisalat DB has made the payment under protest, it added.

Uninor also issued a statement, saying: “Uninor has deposited the penalty as claimed by the DoT, however under protest. 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 our control. We have requested DoT to consider these in its assessment."

A DoT official said the department was examining the records of telecom companies. “As we find that companies have failed to meet the roll out commitments they will be sent notices. It is an ongoing process," said the official, who did not want to be identified.