Ministry of Communication and Information Technology
DEPARTMENT OF: TELECOMMUNICATIONS

RAJYA SABHA
STARRED QUESTION NO 228
TO BE ANSWERED ON 11.03.2011
Violation of Rollout Obligations by UASL Licensees

228. SHRI RAJEEV CHANDRASEKHAR

Will the Minister of COMMUNICATION AND INFORMATION TECHNOLOGY be pleased to state:-

(a) whether it is a fact that there was a delay in issuance of Show Cause Notices with regard to violation of rollout obligations by UASL licensees since 2008;

(b) if so, the date by which Show Cause Notices should have been issued vis-à-vis the date on which they were issued, licensee-wise along with the reasons therefor;

(c) whether this has delayed collection of penalties and caused a loss to the exchequer; and

(d) if so, the action proposed to be taken by Government against those who have caused such delay within the Department of telecom?

Answer
THE MINISTER OF HUMAN RESOURCE DEVELOPMENT AND COMMUNICATIONS AND INFORMATION TECHNOLOGY
(SHRI KAPIL SIBAL) 

(a) to (d) A Statement is laid on the Table of the House. 

STATEMENT TO BE LAID ON THE TABLE OF THE RAJYA SABHA IN RESPECT OF PARTS (a) TO (d) OF THE RAJYA SABHA STARRED QUESTION NO.228 FOR 11TH MARCH, 2011 REGARDING “VIOLATION OF ROLLOUT OBLIGATIONS BY UASL LICENSEES ”. 

(a) & (b) No, Sir. As per amended Unified Access Service (UAS) license conditions, licensee shall ensure that metro service areas are covered within one year of date of allocation of start up spectrum. In non-metro service areas, the licensee shall ensure that in first phase of roll out obligation at least 10% of District Head Quarters (DHQs)/towns where startup spectrum has been allocated are covered within one year of such spectrum allocation. Further, in second phase of roll-out obligation for non-metro service areas, the licensee shall ensure that at least 50% of DHQs/ towns, where start up spectrum has been allocated are covered within three years of date of allocation of such spectrum. While computing the period of one year from date of allocation of start up spectrum, the average delay in SACFA clearance is to be excluded. These amended conditions were referred to Ministry of Finance for their views and their final views were received in December 2010.

For violation of the rollout obligations, license provides that Liquidated Damages (LD) charges @ Rs. 5 Lakh (Rupees Five Lakhs) per week for first 13 weeks; @ Rs 10 lakhs for the next 13 weeks and thereafter @ Rs. 20 lakhs for 26 weeks subject to a maximum of Rs. 7.00 crores shall be imposed. For delay of more than 52 weeks the Licence may be terminated under the terms and conditions of the Licence agreement. 

Accordingly the LD is imposed through demand notices for delayed rollout and action for termination is initiated by issuing the show cause notices wherever delay in rollout is more than 52 weeks from due date for meeting the rollout obligations as per UAS license conditions. 

Startup spectrum to the UAS licensees who got UAS license in the year 2008 was allocated between April 2008 and May 2009. Accordingly, the rollout obligations compliance of these licensees has been examined after collecting the data from licensees, Telecom Enforcement, Resource and Monitoring (TERM) cells and WPC. Two Show Cause Notices for termination of the license due to rollout obligation violations have been issued and action for the same has been initiated for other cases. 

(c) & (d) Do not arise in view of (a) & (b) above.