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Jagmohan wags a warning finger at telecom companies

Communications Minister Jagmohan has warned private basic and cellular telecom operators to pay at least 20 per cent of their outstanding licence fees by the end of March or face "consequences".

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The companies would be asked to furnish bank guarantees to cover the remaining 80 per cent dues.

At his maiden interaction with the press last week, Jagmohan outlined plans for corporatising the Department of Telecommunications.

He revealed plans for setting up a ‘telecom service board’ "to look after the service provision function". The board would be operational before April 1 this year, he promised.

Jagmohan also stressed the role of the Telecom Regulatory Authority of India and stated his intention to strengthen the hands of the regulator in dealing with DoT.

"The department has a role of a service provider and to that extent it will be governed by TRAI. However, the sovereign powers of the government would remain and licensing would be retained," he explained.

Ruling out the possibility of a proposed moratorium from payment of licence fees, Jagmohan said, "Defaulting operators would have to face consequences in case of failure to pay the dues." DoT will issue notices within 10 days to all defaulters asking them to pay the dues before March 31, he added.

Cellular operators owe the government about Rs 30 billion as licence fee dues. Only two operators - Birla AT&T Cellular and Tata Communications - have furnished DoT with bank guarantees on their licence fee dues.

Eleven other cellular providers and six basic telecom companies are defaulters. They have paid licence fees or furnished bank guarantees in part.

Reacting to the minister's statement, a cellular industry representative expressed surprise. He felt that it is unlikely that the government will receive the amount it has earmarked - Rs 6 billion, which is 20 per cent of Rs 30 billion outstanding.

Given the finances of the cellular companies, he also expressed doubts whether they would be able to raise bank guarantees for the remaining 80 per cent of the outstanding. Banks are insisting on fixed deposits or corporate backing to provide guarantees to cover any liabilities of telecom companies.

Jagmohan said he would follow the path of his predecessor Sushma Swaraj while corporatising DoT. Setting up a separate telecom services board was a step in this direction. The board will look after the various services being offered, while the ministry will retain the policy-making functions, he added.

There is a need for "rationalisation and reorganisation of the entire telecom administrative structure", Jagmohan said. He felt that taking care of the over 400,000 employees of DoT in the transition from a department to a corporation was high on his agenda.

On the new national telecom policy, Jagmohan said, "It is at an exploratory stage and details cannot be revealed at this stage." A draft policy is to be out in a few weeks for national debate and public suggestions would be welcomed, he added. The minister also sought to reiterate the government's commitment to spread telephony in rural areas.

"Highest priority will be accorded to distant areas. For them, a telephone connection is very important," he pointed out.

- Compiled from the Indian media

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