DoT may reduce penalties on erring telecom companies & hold talks to settle other issues

NEW DELHI: The department of telecom (DoT) may offer to reduce penalties on erring telecom companies and would hold talks to settle other outstanding issues in a bid to ease tensions between service providers and the government.


“Trust deficit between the two sides has emerged. We wish to restore trust and take this sector forward together,” a senior official, who did not wish to be named, told ET. As part of the “healing touch” policy, the DoT plans to take these tension-reducing steps, the official added.

Indicating a softening of stance towards Idea Cellular, the official said DoT is considering allowing the company a set-off against its spectrum auction proceeds. “We are seriously considering the merits of this case and will soon announce our decision.” Any such move would bring cheer to the country’s embattled telecom sector where a number of policy decisions have been challenged in courts.

On the issue of penalties, DoT would distinguish between technical/administrative errors on the part of telecom operators and violations that thwart competition, the official said. Currently in a number of cases, the department liberally imposed the maximum penalty of .`50 crore per licence area for operators on violations of the unified licence.

The practice could now change, the official said, adding that the department is planning to decide the quantum of penalty depending upon the severity of violation. The official, however, said that some contentious issues, such as the 3G intra-circle roaming pact, cannot be resolved out of court. Last month, Aditya Birla group chairman Kumar Mangalam Birla had written a letter to telecom minister Kapil Sibal requesting him to intervene in a host of issues. Birla contended that his company was not being allowed the facility of adjusting the Rs 484-crore entree fee paid by Spice against the payment for spectrum won in the recently concluded auctions.

Allowing Idea an off-set would be a departure from DoT's stand until now that the merger of Spice with Idea is a different issue from that of Norwegian operator Telenor, which has been allowed to adjust its entrée fee on the grounds of ‘principle of equal restitution’. The recent efforts highlight the telecom ministry’s intent to bridge the gap with operators, who have started challenging its decisions in courts over matters including 3G intra-circle roaming pacts, onetime levy, licence renewal, definition of AGR, and penalties imposed for violation of licence conditions.