DoT for new penalty norms for telecom operators before next spectrum auction

india-telecom2014The Department of Telecommunications (DoT) wants to have a new and more rational approach to penalty norms for telecom operators, where penalty for violations will not be automatic and financial penalty will be dealt on a case-to-case basis with technical and financial checks.

The DoT wants new norms before the commencement of next spectrum auction. The DoT has been come under criticism from the industry for imposing maximum penalties of Rs50 crore even for minor violations like absence of placards on mobile towers or late submission of papers.Industry estimates suggest that the DoT has imposed total penalties of Rs6,850 crores on telecom companies which include fines for minor violations like late submission of papers and absence of placards on mobile towers.

Also read: Mobile tariff to go up significantly after next spectrum auction?

“With regard to financial observation, it is agreed that penalty cannot be levied automatically and each violation and related financial penalty will be analysed and levied on a case-to-case basis which will involve technical as well as financial examination,” said Annie Moraes Member (Finance) of DoT to telecom secretary Rakesh Garg in a letter.

Telecom regulator, Telecom Regulatory Authority of India (TRAI) had recommended classifying penalty in two categories—minor and major. It had suggested imposition of a maximum penalty of up to Rs25 lakh in case of minor violation and up to Rs10 crore for a major violation.

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