No fee refund to new telecom licence applicants if found ineligible: DoT

NEW DELHI: The licensing wing of the Department of Telecom (DoT) has said the new telecom licence applicants who will be issued Letters of Intent (which is the first step towards launching mobile services in India) will not be refunded the entry fee of Rs 1,650 crore, bank guarantees and all other fees paid by them if they are found to be ineligible later. This is because DoT, which is processing hundreds of applications, has not been able to independently verify all the documents submitted by the new applicants.

The licensing wing has also cautioned that new entrants must know that the likelihood of all players getting radio frequencies would be uncertain even before they deposit the entry fee.

LoI holders can launch commercial services only after spectrum is allocated. This implies that each LoI holder, after it pays the licence fee, will be entitled to 4.4 MHz of GSM spectrum per circle, but subject to availability.

“In case the LoI is to be issued in the proposed draft format when the eligibility was yet to be established, we wanted in all fairness and transparency to the applicants to let them understand that the non-refundable entry fee, FGB and performance bank guarantee (PBF) will be forfeited if they are found to be ineligible later. This was suggested to help them to take an informed decision,” the licensing wing said in an internal note.

This development comes even as DoT is set to issue letters of intent (LoIs) to 16 companies, including the likes of ByCell, Swan, Cheetah, S Tel, Parsvnath, Datacom, Unitech, Shyam, BPL Mobile and Indiabulls amongst others for starting mobile services. Sources said that the licensing wing deemed this clarification as necessary as it feared that some of the potential companies in line to get an LoI may not have fulfilled all the requisite eligibility criteria.