DoT looks to cancel fewer licences than recommended by the TRAI

11 May 2011

The Department of Telecommunications (DoT) is reportedly considering the cancellation of just 15 mobile telephony licences for failure to meet network rollout requirements, compared to the more than 60 suggested in November 2010 by the Telecom Regulatory Authority of India (TRAI), India’s Economic Times reports. According to the report, two unnamed DoT officials have claimed that the TRAI’s method of assessing network rollout was flawed, and it is understood that the DoT will send a communication to it in the next few days making this assertion. The Economic Times cites an internal DoT note which argues that in examining whether rollout obligations had been met, the TRAI had not considered delays by the state in handing over spectrum to the licensees in question. As previously reported by CommsUpdate, in November 2010 those operators that the TRAI said should have their licence revoked for the non-rollout of services were: Loop Telecom (14 service areas); Sistema Shyam TeleServices, which operates under the MTS India banner (ten areas); Uninor (eight areas); and Etisalat DB Telecom, formerly Swan Telecom (two areas). Further, the regulator also called for a number of concessions to be withdrawn on the basis that rollout had not been satisfactory, with Etisalat, Videocon Telecommunications (formerly Datacom) and Loop Telecom facing the loss of 13, ten and five licences respectively.

Under existing legislation mobile operators are required to provide commercial services in at least 10% of the district headquarters for a licensed circle by the end of the first year in operation. The DoT is permitted to issue fines of INR500,000 (USD11,111) per week for the first 13 weeks of delays in meeting this obligation, with the penalty rising to INR1 million per week for the following 13 weeks, and then up to INR2.6 million for delays up to 26 weeks. Should an operator fail to roll out services within 52 weeks of being handed a concession then the state can cancel the licence and take back any allocated spectrum.