The Hindu Business Line : Failure to meet roll-out obligation

THE Department of Telecom has decided to slap a Rs 406-crore fine on seven operators as liquidated damage for not fulfilling the roll-out obligations as per the universal access service licence (UASL) agreement.

The DoT has, however, not yet issued the letters to the operators as the decision is awaiting approval from the Communication and IT Minister. The operators had met the Minister in January to seek more time to fulfil the roll-out obligation.

The operators in the DoT's list of defaulters include Reliance Infocomm, Tata Teleservices, Hutchison Essar and Bharti Cellular.

According to the licence conditions, operators are required to cover 10 per cent of each district headquarters in the country at the end of the first year. Once the roll-out obligation is met with, the operators are required to get a certificate from the Telecom Engineering Centre (TEC), the technical wing of the DoT. According to senior government officials, DoT has the power to recover liquidated damage in case the operators are not able to provide the required certification within the stipulated time frame.

DoT sources said that the major offenders are Reliance Infocomm and Tata Teleservices who are being asked to cough up Rs 147 crore and Rs 140 crore respectively. Both the companies have not fulfilled the required obligation in more than 20 Circles where they offer service.

Dishnet DSL has a fine of Rs 49 crore for violation in 7 Circles while Bharti Cellular will have to pay Rs 42 crore for 6 Circles. DoT has fixed a fine of Rs 14 crore for Hutchison Essar and Rs 7 crore each for HFCL and Shyam Telelelink

Operators whose names do not figure in the list of defaulters include the two state-owned telecom majors BSNL and MTNL and also Idea Cellular.

The liquidated damage charges has been worked out at the rate of Rs 5 lakh per week for the first 13 weeks, Rs 10 lakh per week for the next 13 weeks and thereafter Rs 20 lakh per week for next 26 weeks subject to a maximum of Rs 7 crore Circle.

For delay of more than 52 weeks, the licence may be terminated under the terms and conditions of the licence agreement. DoT sources said that operators' excuse of not being able to get the Right of Way to roll out the network was not acceptable.

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