Cancel 69 licences of 6 operators: TRAI

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Old 19-Nov-2010
Cancel 69 licences of 6 operators: TRAI

Two days after the Comptroller and Auditor-General (CAG) report on 2G spectrum allocation highlighted the non-fulfilment of rollout obligations by new telecom operators, the Telecom Regulatory Authority of India (TRAI) recommended cancellation of 69 licences of six operators, including five new ones, who were sitting on spectrum and failed to provide services in the circles allotted to them.
The companies under the scanner are Etisalat DB (earlier Swan) that has failed to roll out services in 15 circles, Videocon Communications (earlier Datacom Solutions) in 10 circles, Uninor (Unitech Group) in 8 circles, Loop Telecom (earlier Shipping Stop Dot Com) in 20 circles, Sistema-Shyam in 11 circles and Aircel in 5 circles.
As per the conditions, the licensees are required to roll out the services in 90 per cent service area in metros and 10 per cent district headquarters in other service areas within 12 months of the date of award of the licences.
The TRAI, which had recommended penalty for non-compliance with the rollout obligations, said this amount could run into several thousands of crores of rupees.
“So, we had suggested that these licences should be cancelled. This would vacate enormous amount of spectrum and this can be given to companies that are serious about meeting the schedule,” the TRAI said on Thursday.

Significantly, the CAG report found that “though the six new operators obtained the initial spectrum in 81 service areas during April 2008-January 2009, none of them rolled out their services as per the provisions of the licences in any service area till December 31, 2009.”
The CAG report had indicted the Department of Telecommunications, saying it failed to recover liquated damages and penalty of Rs.679 crore from the six operators for inordinate delay in rolling out their services till December 31, 2009. “Since there were many existing telecom licensees in dire need of this scarce natural resource, it resulted effectively in hoarding of the finite natural resources of the nation by these operators.”

When contacted, Minister of State for Communications and IT Sachin Pilot told The Hindu, “The TRAI recommendations have been submitted to the government…we will study and review. We will come out with a view that takes the policy forward and helps in the growth of the sector.” It was premature to say what action would be taken against the erring operators. “The government's job is to provide stable regulatory environment that is transparent and equitable, which instils confidence in investors in India as well as abroad.”
Meanwhile, Uninor and Sistema-Shyam claimed that they had complied with the network rollout obligations and so far not received any notice from either the government or the TRAI.

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