Communication and IT Minister Kapil Sibal on Wednesday told honchos of telecom companies that the telecom department would apply its mind while imposing penalties on defaulting operators.
“I hope officials in my Ministry will apply their mind openly on every infraction and...impose penalty commensurate with the nature of the fault,” Sibal said. “If they don't do that and I don't see any progress on that, I will have to give that power to TRAI so that it's taken from them.”
“I have been trying to persuade officials to take a rational view…they impose a penalty of Rs 50 crore, which is entirely irrational. Government gets no revenue, no money because those penalties are always stayed by court,” Sibal added. Companies like Bharti Airtel had last month received a demand notice of Rs 650 crore from the DoT pertaining to Subscriber Local Dialling service to its subscribers. The company said the demand for Rs 650-crore penalty was devoid of any merit and has no justification both on facts and in law.
Gopal Vittal, Chief Executive Officer, Bharti Airtel, said there should be a clear set of criteria to determine major and minor violations and revenue loss. “We have been levied a very large penalty of Rs 650 crore for revenue that we earned eight years ago of barely Rs 8 lakh,” he said.
The Association of Unified Telecom Service Providers of India said the industry faces combined penalties of about Rs 6,850 crore, which is burdening balance sheets and should be resolved soon.
The Cellular Operators Association of India also requested Sibal to consider resolving court cases amicably, including those related to 3G intra-circle roaming, defining adjusted gross revenue and the hike in spectrum charges.
Spectrum pricing
During the meeting Sibal, ruled out refunding the difference, if any, between what operators paid in the last 2G auction in November and the price to be established in the next round of spectrum sale.
Videocon Telecommunication’s CEO Arvind Bali demanded refund of difference in amount paid by his company during November auction for 2G spectrum and the final price to be derived in the next round of auction.
“We have bought spectrum at distressed prices. In this auction whatsoever is the price established if there is difference I think that should be refunded,” Bali said.
In response, Sibal said, “You participated in an auction, now there is going to be new auction...you know this demand is something that may never be accepted ...nobody forced you to participate in the auction.”
Telecom regulator on Monday had recommended a 60 per cent cut in the base price of spectrum for the next round of auction. Operators such as Videocon and Telenor, which bought spectrum in the earlier round of auction at a higher price, want the reduced prices to spectrum bought by them.
M&A policy
On the final M&A guidelines for the telecom sector, Sibal said that it is likely to be ready by end of this month. “I had a talk with the Secretary (Telecom) this morning and he said he needs another 15 days,” Sibal told reporters after his meeting with industry.