Nov 26, 2008

Business - India;DoT may ease telcos’ rollout obligations

Nivedita Mookerji

NEW DELHI: The government has decided to relax the rollout obligation clause for telecom operators.

So far, telcos had to cover at least 10% of each district headquarter in a circle (state or a metro city) within a year and 50% of the districts within three years of getting spectrum.

The intermediary one-year rollout obligation is set to be removed now.

Communications minister A Raja said at the Economic Editors’ Conference here on Tuesday, “We are reviewing the one-year rollout condition.”

“There’s no point having restrictions and irritants,” he said. The Department of Telecommunications (DoT) is consulting the industry for reviewing the rollout obligation clause. New telecom licensees such as Unitech, Swan and Datacom are expected to benefit from the new rollout obligation norms.

“No company has ever been penalised for violating the rollout obligation,” Raja said, defending his ministry’s stand on relaxation of the norms. “We want to be industry-friendly, and do not want to create irritants.” Recently, DoT officials had said that the government

would closely watch the rollout obligations of the new telecom licensees, and that licences would be withdrawn if the three-year rollout obligation was not adhered to.

Raja also said on Tuesday that the DoT had referred to the regulator, Trai, the proposal for a three-year lock-in period for sale of stake by promoters in new telcos. The DoT proposal followed all-round criticism of Raja over stake sale by new telecom licensees (such as Unitech and Swan) to foreign firms soon after getting spectrum.

Surprisingly, DoT referred the matter to Trai after the Telecom Commission (the highest decision making authority in DoT) decided to introduce a three-year lock-in period for
sale of stake by promoters in new telecom companies.

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