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Navika Kumar
NEW DELHI, Oct 10: The Telecom Commission has decided to soft pedal encashment of bank guarantees (BGs) of defaulting cellular companies in circles by referring the matter to the Committee of Secretaries (CoS). The Commission, in its meeting on September 30, has also decided to direct the Department of Telecommunications (DoT) not to encash bank guarantees of any cellular or paging company which agrees to extend the validity of their bank guarantees, ``even if they do not secure the outstanding licence fee dues fully.''
At the same meeting, the Commission also decided that companies which do not extend the validity of existing bank guarantees, not to mention the outstanding licence fees which run into Rs 1,900 crore for the cellular industry as a whole, will have to face with the encashment of their bank guarantees.
The Telecom Commission's frequent flip-flop in matters relating to pending licence fee dues is likely to worsen the situation so far as the Government's position vis-a-vis basic serviceoperators and metro cellular operators as in both these cases, the operators have already crossed their deadline for a fresh year's licence fees and none of these operators have extended their bank guarantees. According to sources within DoT, ``the entire issue of how to handle defaulters in various services is in a mess as the Government has no clear- cut policy in this direction''. Officials explain that if DoT relents from encashing BGs of one service operator, they would have to follow the same principle for all service operators like paging, basic, metro cellular operators, V-SAT and other private operators.
The telecom department, insiders explain, is on the defensive as encashment of bank guarantees often lands the matter in a court of law with the company alleging that the department has failed to give the required clearances for setting up of the company's network and therefore should relax the beginning of a fresh licensing year. DoT has been found napping on several clearances like spectrumallocation, site clearances for setting up of cell sites which has often led to delays by the company in their roll-out plans. As a result these companies say that DoT should also compensate the private operators rather than penalising them by encashing their bank guarantees.
Further, sources say, while the DoT has managed to win the legal battle against the Telecom Regulatory Authority of India (TRAI) by debarring them from interfering in licensing issues such as the encashment of bank guarantees, it is now caught in a jam as any issue relating to encashment of bank guarantees will be taken to the courts in the state in which the private company has a licence.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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