A few weeks ago, the telecom department said it found Trai recommendations faulty. Of the 74, it said only 12 licences should be cancelled. The department also felt another five licences needed to be cancelled, but these were not in the Trai list.
On Thursday, the Trai wrote back to the department saying it had re-examined its recommendations and that it stood by them. It also said it had got a legal opinion from two former Supreme Court judges to back its position.
Normally, the telecom department goes by what the Trai recommends, but if there is a difference, it has to refer the matter back to the Trai. If the Trai doesnt change its view, under the rules, the department can go ahead and reject the recommendation.
So, the telecom department can cancel just 17 licences instead of the Trai's 74, but the move is likely to prove highly embarrassing especially given the high profile the case has got.
The point of difference between the Trai and the telecom department is that the former is not willing to accept the cases of those operators who have either shown roll-out in technical terms or achieved coverage instead of rolling out services. It has pointed out to the telecom department that such operators have not filed their tariffs with the Trai, which is mandatory, never submitted their subscriber numbers till the time of the recommendations and have no adjusted gross revenue so are not paying any licence fee to the government on revenue-share basis.
The Trai recommendations sent in November-December 2010 were in two categories. The first category included 43 licences that had not rolled out their services within 52 weeks of spectrum allocation. The second category had 31 licences, which had shown technical roll-out but not commercial so did not serve either social utility or brought revenues to the government.
The Trai had said that while the first case of 43 were outright cases for cancellation, the second pertaining to 31 licences were also fit cases for cancellation as the roll out was not proper. It had said that the government should even seek a legal opinion for cancelling their licences. On both the counts it has stuck to its original position. However, in the first case the number of licences for cancellation comes down to 31 because out of the 17 identified by the telecom department 12 tallies with the Trai's ones. New licensees are required to cover at least 10% of the district headquarters by the end of the first year of being given the licences/spectrum.
Under the licence conditions, telecom department has the powers to impose a fine of Rs 5 lakh a week for the first 13 weeks of delay, Rs 10 lakh for the next 13 weeks and thereafter at the rate of Rs 20 lakh for delays up to 26 weeks. If any operator fails to fulfill the obligation even after 52 weeks of delay, then it's licence could be cancelled.