Rationalization of penalty norms in the offing: DoT

The government has finally taken a stand on rationalizing penalty norms for telecom companies, where it has decided to deal with penalties on a case-to-case basis and not use the ‘automatic’ approach used earlier.

This decision has been made in the backdrop of heavy criticism faced by DoT for imposing maximum penalties and fines of Rs 50 crore even for minor violations like absence of placards on mobile towers or late submission of papers.

Specifically, DoT intends to have a two tier structure in place and not a four-tier structure of penalty imposition and appeal mechanism, as recommended by its access division. There will also be a provision for cancellation of licence in case of performance violations beyond a point.

Telecom Regulatory Authority of India (TRAI) in April 2013 had recommended classifying penalty in two categories — minor and major. It had suggested imposition of a maximum penalty of up to Rs 25 lakh in case of minor violation and up to Rs 10 crore for a major violation.

Industry estimates suggest DoT has so far imposed penalties of Rs 6,850 crore on telecom companies.