DoT may not cancel licences for rollout failures

The department says its criteria for measuring rollout different from Trai’s.

In what could give a big relief to new mobile players, the Department of Telecommunications (DoT) is unlikely to cancel 53 licences — as recommended by the Telecom Regulatory Authority of India (Trai) — for non-fulfilment of rollout obligations.

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“As a statutory requirement, DoT has to refer back Trai’s recommendations once. Trai has given its recommendations again. We can either accept them or not accept them. It is unlikely that DoT will cancel all the 53 licences suggested by Trai,” a senior DoT official told Business Standard.
“The regulator’s methodology for assessing network rollout is different from DoT’s,” said the official.

This will mean a major respite for Uninor, Sistema, Loop, Videocon, Etislat-DB and Aircel. Most of these were given licences in 2008.

Trai had recommended cancellation of 74 licences in November last year. These included 31 licences for which Trai said legal opinion should be taken.

In response to Trai’s recommendations, DoT said according to it, only 12 licences should be cancelled, apart from another five that the regulator did not recommend.

If 53 licences were cancelled, about 210.4 Mhz spectrum, ranging from 4.4 Mhz to 20.1 Mhz, would be released, Trai told DoT. The 31 licences for which legal opinion is to be taken are in addition to the 53 mentioned by Trai.

Now, in addition, Trai has asked DoT to cancel four licences of Videocon in Assam, Jammu and Kashmir, Kolkata and the North East. These were not in the earlier recommendations as the company then had time to roll out services.

DoT, while referring the matter back to Trai, said the latter did not consider the delays in getting spectrum and clearances from the government.

For its second round of recommendations, Trai took the opinion of two retired judges of the Supreme Court.

Mobile companies have to cover 10 per cent district headquarters within the first year of the allotment of spectrum.

Forty three licences were recommended for cancellation because operators failed to comply with the rule regarding starting of services in 10 per cent district headquarters and towns of a circle within one year of getting spectrum. These licences belonged to Loop Telecom (14 circles), Sistema (10), Uninor (8) and Etisalat DB (2). The only older player was Aircel (4).

A total of 31 licences involved poor coverage and inadequate cell towers. Trai said their licences should be cancelled after taking legal opinion. Companies in this category included Etisalat DB (13), Videocon (10), Loop Telecom (6), Aircel (1) and Sistema (1).