Department of Telecommunications working on formula for non-rollout penalty

The department of Telecommunications (DoT) is working overtime on a formula to fix the financial penalty to be imposed on those telecom licencees which have failed to comply with the rollout obligation norms set by the government.

Even as the Telecom Regulatory Authority of India (Trai) had recently written to the DoT secretary R Chandrasekhar recommending cancellation of 69 2G telecom licences granted in 2007-2008, the government is looking at the option of imposing a financial penalty on the violating licencees now.

Although the Comptroller & Auditor General of India (CAG) and the Opposition parties have benchmarked the revenue raised from the recent 3G auction to determine the loss caused to the National Exchequer from the 2G spectrum allocation in 2007-2008, sources indicated that financial penalty for failing to meet the rollout target would be much lower than the 3G mark, sources added. DoT will take a decision on the penalty amount after conducting a field survey on who has rolled out in real terms and how much.

It is learnt that some of the telcos, which show rollout compliance, have very few cell towers in many circles. But, DoT is taking a serious note of such instances, especially in ‘obligatory’ circles like Jammu & Kashmir, and North-East. Along with lucrative circles like Delhi and Mumbai, telcos must have significant rollout in places like J&K and North-East.

According to the DoT licensing guidelines, in telecom circles, at least 10% of the District Headquarters (DHQs) should be covered in the first year and 50% of the District Headquarters will be covered within three years of effective date of license. Also, the licensees shall be permitted to cover any other town in a district in lieu of the district headquarters.

Coverage of a DHQ/town would mean that at least 90% of the area bounded by the municipal limits should get the required street as well as in-building coverage. In metros, 90% of the service area shall be covered within one year of the effective date. The district headquarters shall be taken as on the effective date of licence, the guidelines state.

Besides the penalty on operators for failing to meet rollout obligation, the DoT is also looking at an action plan for those with additional spectrum. A source said that one of the options being worked on by the DoT is auction of spectrum for anything beyond 6.2 Mhz.

2G spectrum was given out on ‘first-come-first-serve’ basis to several companies in 2007-08 rather than taking the auction route. The Comptroller & Auditor General of India (CAG) pegged the loss to the Exchequer at Rs1.76 lakh crore for giving away scarce spectrum at a throwaway price of Rs1,651 crore for pan-India 2G licence. Last week, A Raja was forced to resign as the telecom and IT minister over the 2G spectrum controversy.

Those identified by the regulator for scrapping of licences across several circles include Etisalat DB, Uninor, Sistema-Shyam, Videocon, Loop Telecom and Aircel.