INR2.16 billion already paid to Indian government relating to rollout delay claims

27 Jan 2011

India’s Central Government has collected almost INR2.16 billion (USD46.8 million) in fines from those operators alleged to have not rolled out their networks in line with the terms of their concessions, according to the Hindu Business Line. The report cites telecom secretary R. Chandrasehkar as noting: ‘We have received INR2.16 billion as liquidated damages from the new service providers for missing out the rollout obligations out of a total INR3.43 billion demand till 21 January.’ Regarding those providers that had yet to pay, the minister said: ‘The companies which had moved the Telecoms Disputes Settlement and Appellate Tribunal (TDSAT) are also expected to pay this (liquidated damages) as soon as possible.’

The news comes after the Department of Telecommunications (DoT) in December 2010 issued 119 show-cause notices to licensees for failing to roll out their infrastructure within a year of having been handed their licences. The maximum fine for a year of default is understood to be INR70 million per telecom circle, while initial reports suggested that those cellcos that had taken longer than a year to introduce commercial services could find their concession annulled.

Some operators have, however, sought the ruling of the TDSAT in the matter, and one, Uninor, was given something of a reprieve earlier this month when it was announced that the tribunal had directed it to pay 60% of the penalty within a two-week period, ‘without prejudice to the rights and contentions of the parties and subject to any other or further orders’. The TDSAT noted that Uninor had raised some ‘arguable’ questions over the levy of the penalty by the DoT, with the cellco pointing out that it required a Standing Advisory Committee for Frequency Allocation (SACFA) clearance for all cell sites in each district headquarter; Uninor said that its rollout was delayed as a result of hold-ups in having such clearances granted.