DoT panel for slab-based penalties for violations by telcos

A DoT panel has recommended classifying violations committed by telecom operators and introducing slabs with monetary fines ranging from Rs 1 lakh to Rs 50 crore.

Telecom Minister Kapil Sibal had asked the Department of Telecommunications (DoT) to work on rationalising penalties.

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The industry had repeatedly approached him saying that the maximum penalty of Rs 50 crore was being imposed even for minor mistakes like late submission of a document.

The government has realised little revenue from such penalties because they have been challenged in courts. The DoT panel has suggested examining violations on nine parameters and clubbing them under five heads.

Warnings can lead to penalty of Rs 1 lakh, minor violations with Rs 1 crore penalty, moderate (Rs 5 crore), major (Rs 20 crore) and severe (Rs 50 crore), official sources said.

The suggestions of the panel will be placed before inter-ministerial panel, Telecom Commission (TC) for approval.

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

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 that after examining these parameters, violations can be categorised under functional classifications to measure their impact like company level, commercial, network, equipment, technical, service, operations, security and finance.

The Telecom Regulatory Authority of India (TRAI) in April 2012 had recommended classifying penalties 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 every major violation.

However, the same was not approved by the TC. Industry estimates suggest that the DoT has imposed total penalties of Rs 6,850 crore on telecom companies by mid-2013.

These include fines for minor violations like late submission of papers and absence of placards on mobile towers.