Govt to rationalise penalties on telecom companies

The government is planning to rationalise the penalty structure for telecom companies, and limit maximum penalty on a company to Rs50 crore.

This is in line with the recommendations of a panel constituted by the DoT, which suggested monetary fines ranging from Rs1 lakh to Rs50 crore for violation of rules.

"The idea is to rationalise the penalty structure so the fee is decided based on the pattern of violation," M F Farooqui, secretary, department of telecommunications (DoT), said.

Telecom minister Kapil Sibal had asked the Department of Telecommunications (DoT) to work out a more rational penalty structure after the industry complained that companies face the maximum penalty of Rs50 crore even for minor infractions like late submission of a document.

The DoT panel has suggested examining any violation in the light of its impact on national exchequer, customers, public interest, national security, policy guidelines, etc.

Repeat violations and the impacted service area(s) will be taken into consideration while imposing any levy, the DoT report has suggested.

The panel has suggested categorising violations under functional classifications to measure their impact like company level, commercial, network, equipment, technical, service, operations, security and finance.

The panel has suggested examining violations on nine parameters. Warnings could lead to a penalty of Rs1 lakh, minor violations Rs1 crore, moderate Rs5 crore, major Rs20 crore and severe Rs50 crore, sources said.

An inter-ministerial committee and the Telecom Commission (TC) will appraise the guidelines before it is finally approved by the government.

The Telecom Regulatory Authority of India (TRAI) had, in April 2012, recommended classifying penalties in two categories - minor and major, with a maximum penalty of up to Rs25 lakh in case of minor violation and up to Rs10 crore for major violations.

The Telecom Commission, however, did not approve it.