Department of Telecom to issue Notices to 9 Telecom Companies

Telecom department has made its mind to issue showcause notice to 9 telecom operators ahead of canceling their licenses for not meeting services rollout obligations. DoT has already issued notices to Etisalat DB Telecom seeking cancellation of its licenses in Delhi and Mumbai circles.

“In those cases, where there have been rollout delays beyond 52 weeks, we will be issuing showcause notice in about 20 cases, of which two have already been sent. The operators will be given 60 days to respond to the notices,” said telecom secretary R Chandrashekhar.

In a letter to DoT by Telecom Regulatory Authority of India (TRAI) in November, 2010, telecom regulator had recommended liquidity damages and cancellation of licenses against companies that had not met rollout obligations where services were not rolled out 52 weeks after grant of licenses.

Unified Access Service(UAS) License agreement stipulates that telecom companies need to cover 90 per cent of the area in metro circles such as Delhi, Mumbai, Kolkata and Chennai within one year of allotting start-up spectrum. For non-metro circles, the coverage stipulation is 10 per cent of district headquarters (DHQs) in first year and 50 per cent area within three years of allocation.

Trai had named nine companies that had not met stipulated conditions of rollout – Vodafone Essar, Tata Tele Services (TTSL), S Tel, Videocon, Sistema Shyam Tele Services (SSTL), Loop Telecom, Uninor, Etisalat DB Telecom and Aircel/Dishnet. Telecom companies have also paid Rs 320 crore as liquidity damages till first week this month.

A senior official in telecom ministry, on the condition of anonymity, said that any decision by DoT on canceling licenses of erring telecom companies, whether on account of eligibility criteria or for not meeting their rollout obligations, would depend on Supreme Court verdict. “It is likely that telecom ministry will await decision of the Supreme Court on license cancellation before taking a call on whether it (the ministry) should do the same,” the official said.

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