TRAI cracks the whip on errant telcos

The Telecom Regulatory Authority of India (TRAI) recommended cancellation of 69 licences of six telecom operators for non-compliance of the rollout obligations. 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-Telenor JV) in 8 circles, Loop Telecom (earlier Shipping Stop Dot Com) in 20 circles, Sistema-Shyam in 11 circles and Aircel in 5 circles. Uninor, Sistema-Shyam and Loop Telecom claimed they had complied with the network rollout obligations and so far had not received any notice from either the Government or TRAI.



The Department of Telecommunications (DoT) will consider the recommendations of the telecom regulator on cancellation of licenses recently given to some companies, Telecoms Minister Kapil Sibal said. "We will consider it", said Sibal.

As per the licence conditions, the operators are required to roll out services in 90% service area in metros and 10% district headquarters in other service areas within 12 months of the date of award of the licences. TRAI, which had recommended penalty for non-compliance with the rollout obligations, said that the fine 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 is believed to have told the DoT.

As per the licence conditions, the operators are required to roll out services in 90% service area in metros and 10% district headquarters in other service areas within 12 months of the date of award of the licences. TRAI, which had recommended penalty for non-compliance with the rollout obligations, said that the fine 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 is believed to have told the DoT.

The CAG report had found that though the six new operators obtained the initial spectrum in 81 service areas during April 2008 to January 2009, none of them launched their services in any service area till December 31, 2009. The CAG report also indicted the DoT saying that it failed to recover damages and penalty of Rs 6.79bn from the six new telecom operators for inordinate delay in rolling out their services till December 31, 2009. The CAG report has accused the Telecom Ministry of committing serious irregularities and impropriety in distributing 122 new 2G licences to new telecom players in January 2008, causing an estimated loss of Rs 1.76 lakh crore to the exchequer. The CAG report said that DoT failed to ca