Telecom minister Ravi Shankar Prasad on Monday said the government will soon notify a graded penalty system for the wrongs of telecom companies that would bring in some rationality to monetary penalty, which is a flat
Rs 50 crore right now.
The minister explained that the differential penalties would range from as low as Rs 1 lakh for minor violations and progressively rise to Rs 1 crore, Rs 5 crore, Rs 20 crore, and finally up to Rs 50 crore, depending on whether the offence is moderate, major or severe. The department of telecommunications (DoT) has so far served around Rs 8,000 crore in penalty notices to telcos. Most of these resulted in litigation, which includes 3G intra-circle roaming issue among others.
The new rules will also allow a telecom companies to appeal against the penalty to the Department of Telecommunications (DoT). The issue had been pending since 2012, even as the government had approved on rationalising the penal provisions against telcos. Prasad’s predecessor, Kapil Sibal had promised to come out soon with graded scheme for penalty on telcos for violation in May 2012. The issue was further stuck due to parliamentary elections which was held during April-May 2014.
Since then, the telcos had been demanding for immediately putting into place differential penalties for violation but that kept lingering on for reasons, which the government has not been able to explain. Telcos have repeatedly complained for even minor violation, the DoT imposed a penalty of Rs 50 crore which is unfair.
The new norms are a consequence of the Telecom Commission’s decision on April 2011, on the recommendations of a April 2008 committee headed by the then DoT’s additional secretary, who had also suggested a number of major changes including a uniform licence fee.
Sibal had said the penalties should be based on the gravity of the violations and if mindlessly the maximum penalty is imposed in each particular case, it would send a wrong message to the industry. The Telecom
Regulatory Authority of India in its recommendations on the guidelines for the unified licence and migration to the new licence, in April 2012, had suggested that the maximum penalty be reduced to Rs 10 crore.