New Delhi: Is Kapil Sibal’s ministry being overcautious and penalising telecom companies left, right and centre just to ensure that no fingers are pointed against his very high-profile ministry which generated perhaps the biggest scams of all times in the form of 2G during former minister A Raja‘s watch?
Much has been said about the Rs 600 crore penalty that the Department of Telecom (DoT) wants to impose on Reliance Communications (RCom) and its subsidiary Reliance Telecom, for unilaterally switching off mobile coverage in 12 circles between November 2010 and January 2011. But it seems many other telecom companies— both GSM and dual-technology operators — have not even begun services in remote corners of the country, as specified under their rollout obligations.
There is some incongruity in the fact that a heavy penalty can be imposed if an operator were to place telecom towers in remote areas and then switch them off on grounds of non-viability, but the penalty is nominal if the service provider doesn’t even begin the service and violates the rollout obligations totally!
Apparently, this is because in the first case the terms and conditions of the Universal Access Service License (UASL) are being violated; in the latter only USOF (Universal Service Obligation Fund) conditions are being violated. So the first offence can attract a penalty of Rs 50 crore per circle, the second one attracts a much lower penalty.
A DoT official explained that RCom had actually offered a “positive” subsidy for USOF, which means it had actually agreed to pay the government some amount in return for putting up towers and offering mobile connectivity in remote areas of the country (when other operators demanded subsidy from the USO Fund to provide access in remote areas).RCom obviously bid rashly for USO services and then hastily withdrew when the operations started bleeding (Read here).
But RCom switched off services for about a month citing non-viability and thereafter again resumed services when the media pointed this out and DoT asked it to. “Technically, other operators should also be charged but they can’t be charged at the rate RCom will be charged because they did not violate the UASL conditions since they never began services at all!”
This official said that a final decision is yet to be taken on the RCom case, but no one in DoT will recommend “anything less than the maximum penalty. No one wants to be accused of corruption – a charge which is now being levied without thought or doing enough research”.
The second case where Sibal is expected to act tough is “under-reporting” revenues by five telecom companies. DoT is seeking Rs 1,100 crore as damages. Notices to Reliance Communication and Bharti Airtel should be sent in a day or two whereas those to Voadfone, Tata Telecom and Idea will follow shortly for under-reporting revenue in 2006-07 and 2007-08. The notices call for payment of licence fees and spectrum usage charges as well as interest and this could be up to January 2012.
It is obvious then that for Sibal’s ministry, it is a case of once-bitten twice-shy.