As Idea Cellular awaits spectrum allocation to start services in Mumbai and Bihar, the department of telecommunications (DoT) has rejected its claims of compensation of Rs 836.33 million from it on account of various delays in granting it spectrum and other clearances for the Delhi circle in 2002.
Instead, the DoT has charged Idea of not complying with licence conditions and obtaining a certificate from the telecom engineering centre (TEC) for starting services within a year of being granted the licence. DoT said, despite having powers to cancel the licence of the company, it would not do so as the company had started services, but added that it would levy liquidated damages on the company for the violation.
The matter has been referred to the communications and IT minister for final approval.
The matter dates back to August 2002 when Idea had sought compensation from the DoT for delay in granting it spectrum for the Delhi circle. Later, in 2005, the company modified its demand, seeking adjustment of interest on entry fee of Rs 171.6 crore for five months at SBI PLR prevailing from May/June 2002 to October 2002 and waiver of all liquidated damage charges.
However, DoT has contested the claim of delays, saying, according to the licence conditions, a company is given time to start services within a year of being given the licence and other clearances. Idea was granted licence for the Delhi circle on Ocotber 5, 2001. ?As per the licence conditions, the company was required to commission their service within one year of effective date, i.e. October 5, 2002. However, the company could not start its services within the stipulated time of one year. Further, as intimated by the company itself, it could start commercial services on November 8, 2002. The company, however, did not provide the copy of TEC certificate to this effect. Thus, it is evident the company could not have been able to start its service within 13 months, if the allegation of the company regarding delay were correct,? DoT has noted.
Industry sources said DoT has pre-empted any move by the company to seek compensation from the government for delay in commissioning services in Mumbai and Bihar circles for which licences were granted earlier this year. DoT has maintained that there?s no provision for payment of compensation to the licensee for various delays on the part of the department.
