They have failed to meet their network rollout obligations

The Department of Telecommunications (DoT) has so far collected Rs.73.73 crore as penalty from new telecom operators who failed to meet their network rollout obligations as per licence conditions.

“Total penalty is Rs.219 crore … we have so far generated demand for over Rs.78 crore of which the operators have submitted Rs.73.73 crore,” Communications and IT Minister Kapil Sibal told journalists here.

“Telecom operators who have paid the penalty include Etisalat DB, Loop Telecom, Uninor, Sistema Shyam and Aircel … they have submitted the liquidated damages [penalty]. We will be sending more notices and take action against those who fail to respond to them,” Mr. Sibal said.

Asked if the matter would end with the payment of penalty or licences could still be cancelled, Mr. Sibal said: “A decision will be taken after due consideration.”

Etisalat DB Telecom, a joint venture between UAE's Etisalat and Swan, has paid Rs. 9.9 crore as penalty for missing the rollout deadline in four circles. Uninor, a joint venture between Unitech and Norway's Telenor, has also made the payment. Similarly, CDMA operator Sistema Shyam Telecom Ltd. has also paid about Rs.11 crore.

All operators have been given 15 days' time to respond to the DoT's notice. The DoT is hoping to get more money in the next few days when the 15-day period would lapse in the case of other service providers.

As per the licence conditions, the licensees are required to roll out the services in 90 per cent of the service area in metros and 10 per cent in district headquarters within 12 months from the date of award of licences.

The total penalty cannot exceed Rs.7 crore per licensing area and the telecom companies get 52 weeks before their licences are cancelled.