The Department of Telecommunications (DoT) has sent a notice to Etisalat DB for cancellation of Delhi and Mumbai licences for not meeting rollout obligations. Idea Cellular has also got a similar notice for the Punjab circle.
A senior DoT official said the company had been asked to explain why its licences in these two circles should not be cancelled. Etisalat DB has been given 60 days to respond.
DoT was likely to issue notices to more new operators in the coming week, the official added, refusing to give the names of the companies.
Etisalat DB has a subscriber base of 273,634 in Delhi and 46,590 in Mumbai. It had a 0.08 per cent market share at the end of January 2011, according to figures by the Cellular Operators Association of India.
An operator has to start services in 10 per cent of district headquarters and towns in a circle within one year of getting spectrum. Any violation invites monetary penalty or licence cancellation.
DoT’s move came after telecom regulator Trai, in November last year, recommended cancellation of 69 of the 127 licences issued by the government since 2006, for failure of the companies to meet rollout obligations or providing poor coverage.
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Subsequently, DoT issued notices to most of these companies. The operators, mainly new ones, have already paid a total penalty of Rs 300 crore to the government.
Trai said DoT should cancel 38 licences because of operators’ failure to comply with the licence conditions. These included those belonging to new players Loop Telecom (14 circles), Sistema (10), Uninor (8) and Etisalat DB (2). The only old player in the list was Aircel (4).
Trai also pulled up 31 other licensees for poor coverage, saying their licences should be cancelled after taking legal opinion. These companies included Etisalat DB (13), Videocon (10), Loop Telecom (6), Aircel (1) and Sistema (1).