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DoT may penalise four foreign telcos for violating licence rules

Last Updated: Thursday, January 7, 2010 - 18:15

New Delhi: The government is contemplating slapping penalty on four foreign telcos, including AT&T, MCI and BT, for allegedly circumventing licence norms that may have caused revenue loss to the Government.

"The Committee of directors has observed that the foreign MNCs -- AT&T, BT, Equant and MCI (Verizon) have procured the ILD services from the licenced operators -- VSNL, Reliance and Bharti -- and provided to the customers in India. These MNCs have also issued bills and realised revenues from customers in India," said an internal panel of department of Telecom.
Senior DoT officials said decision is pending on this matter and it is currently in the analysis stage. For any further action on this, the final proposal of the committee has to get Telecom Commission and then Minister A Raja`s approval.

As per the draft, AT&T faces a penalty of Rs 86 crore, BT Rs 11.77 crore, Equant Rs 11.66 lakh and small amount on MCI (Verizon).

In case of AT&T, the report said the loss of revenue as unpaid licence fee is Rs 34.57 crore between 2002 and 2006. At a penalty rate of 150 per cent the total payment comes to Rs 86.43 crore.
The committee, however, recommended the Indian ILD licencees--Bharti, Reliance and VSNL had not violated any terms and condition of ILD licence.

The committee which was set up under the chairmanship of Additional Secretary (T) of DoT said it has not gone into the financial detail to ascertain the revenue loss.

However, on the basis of the sample of the invoices raised by the foreign telecom companies from the customers in India, it said "the revenue arising from the bills directly raised by the foreign carriers--AT&T, MCI, BT and Equant—to the Indian customers in India, is not included in the AGR of VSNL, Reliance and Bharti thereby depriving the licensor from getting licence fee on these revenues had these bills been raised by the ILD operators."

DoT`s security wing has already registered a complaint against these four companies with the Economic Offence Wing of CBI, which has registered the case for Preliminary Enquiry.

It is alleged that these four companies caused a loss to the exchequer by depriving DoT of licence fee -- a one-time entry fee of Rs 25 crore (prior to January 1, 2006) plus 15 percent of Average Gross Revenue (AGR). From January 2006, the one-time entry fee was lowered to Rs 2.5 crore and 6 percent of AGR.


First Published: Thursday, January 7, 2010 - 18:15
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