There’s more trouble brewing for 2G players whose licences were cancelled by the Supreme Court.
The Department of Telecom is slapping a penalty on some of these companies for shutting down services without notice.
The fine could work out to Rs 250 crore for STel and Rs 700 crore for Loop Telecom. According to the DoT, both these players had shut down services without giving notice.
In addition to this, the DoT has raised a demand notice on other players, including Rs 687 crore against Etisalat DB, for alleged breach of licence conditions, including failure to meet rollout obligation.
Firms challenge
“In the light of the huge penalty demands being raised for licence violations, bank guarantee as security coverage is insufficient. Since quashing of these licences will come into effect very shortly, it is more important to realise the amount,” stated an internal DoT note seen by Business Line .
Some of the players, including STel and Loop, had filed a petition in court challenging the earlier penalty notices sent by the DoT. “We have not violated any licence conditions. We had informed our subscribers about shutting down our network. Once the Supreme Court cancelled our licences then legally our operations ceased to exist,” said one of the 2G players, which had closed services last year itself.
Demand Notices
However, in a meeting on February 25, top DoT officials issued standing instructions to its various internal units to firm up penalties or dues and issue demand notices immediately.
“The bank guarantee of the defaulter companies should be invoked and encashed in time to avoid increase in the interest liability.
Where invocation of bank guarantee is restrained by court order, the branch concerned may seek legal opinion,” the internal note stated.
Nearly 70 million mobile users have had to shift their operator after the 2G companies, given licences in 2008, were ordered to shut down their network by the apex court.