Majority of DoT fines snarled up in legal challenges

5 Aug 2014

India’s Department of Telecommunications (DoT) has only managed to collect on a small percentage of the penalties it has imposed on operators in recent years, as legal challenges from telcos have delayed or overturned the fines, IT and communications minister Ravi Shankar Prasad told the Lok Sabha (lower house of Parliament) this week. The Economic Times writes that INR11.33 billion (USD185.51 million) worth of fines were dished out in the 2011-2012 year, but the amount collected was just INR2.06 billion, equating to around 18.2% of the total. Subsequent years have yielded similarly poor results, with DoT realising 15.0% of the INR7.19 billion levied in 2012-2013 and 1.6% of the INR79.23 billion charged in 2013-2014. In the current financial year, the DoT has issued fines totalling INR9.46 billion, of which INR40 million (0.4%) had been paid.

Justifying their recalcitrance, operators have accused the DoT of being ‘unnecessarily strict’, in imposing maximum penalties for procedural lapses and minor offences. Indeed, even former telecom minister Kapil Sibal and Telecom Regulatory Authority of India (TRAI) head Rahul Khullar have criticised the DoT’s heavy-handed approach, calling it ‘excessive’ and ‘absurd.’ As shown above, the value of fines levelled by the DoT increased tenfold between 2012-2013 and 2013-2014, from INR7.19 billion to INR79.23 billion. According to TeleGeography’s GlobalComms Database, the DoT’s enthusiasm for imposing fines ramped up in the wake of the 2G spectrum scandal in 2012, which resulted in – amongst other things – the prosecution of a number of officials for their role in the illegal allocation of some 122 licences. The regulator has subsequently come under greater scrutiny from other government agencies, and as a result officials have become stricter with their handling of infractions, lest any leniency be treated as a sign of corruption. Upon taking office earlier this year, the new telecom minister Prasad, called for DoT officials to ‘shun any fear in decision making’ and pledged to ‘fully back honest decision making.’ To that end, the DoT is now developing a graded penalty system that will vary the level of punishment to fit the type and severity of the infraction.

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