Trai seeks legal view on licence annulment

The Telecom Regulatory Authority of India (Trai) has sought the legal opinion of two former Supreme Court judges on a request by the department of telecommunications (DoT) that it reconsider its recommendation to cancel 74 licences awarded to telecom companies for not fulfilling roll-out obligations.

DoT has asked that the number be scaled down to 12. In all, DoT has said 15 licences could be cancelled for missing roll-out obligations. These include three that were not recommended by Trai.

Cancellation of 74 licences can fetch govt about Rs 15,000 cr

Trai agreed with DoT on the three fresh cases and said it would like to leave it to DoT to calculate the amount of liquidated damages to be imposed. DoT said that going by the licence conditions, the licencees are liable to pay liquidated damages if services are not rolled out within 52 weeks.

Trai, in its recommendations last year, had asked DoT to cancel 43 telecom licences as they were given spectrum but did not roll out the networks within 52 weeks. The other 31 licencees in the regulator's list had technically rolled out their networks but this was negligible. In November 2010, Trai had recommended cancellation of licences of Uninor, Etisalat, Videocon, Aircel and others in some telecom circles.

Operators have to cover 10 per cent of the district headquarters within a year of allotment of spectrum, according to licence conditions. After claiming liquidated damages the licences can be cancelled if services are not rolled out on the expiry of the following 52 weeks, the conditions stated. Trai said telecom operators whose licences should be cancelled have neither notified their tariffs not submitted the numbers of their subscribers. They also had not paid licence fee to the government till the time the recommendations were made. In all, 122 licences are under scrutiny. These were allocated in 2008 without auctioning the scarce resource - spectrum - which is said to have caused a presumptive loss of over Rs 1.76 lakh crore. The matter is being examined by various investigating agencies and also a parliamentary panel.

The telecom ministry had issued notices to telcos on two issues - the ineligibility for being awarded licences and not fulfilling rollout obligations within the stipulated timeframe. In all, 85 licence holders were issued showcause notices for missing rollout obligations, while the others were under scrutiny for ineligibility of being awarded licences.

New operators, including Etisalat DB, Loop Telecom, Uninor, Sistema Shyam and Aircel, who were facing the threat of licences being cancelled for missing roll-out dates, have paid penalty totalling about Rs 219 crore to the government.

Courtesy: Mail Today