DoT likely to fine erring telcos rather than cancel licences

The Department of Telecommunications (DoT) is expected to impose huge penalties on telecom firms that have failed to meet their roll-out obligations rather than cancel their licences outright.

With huge subscriber base, even for comparatively smaller firms, it would be unwise on the part of the government to punish customers for the telecom firms' faults, say analysts.

Speaking to reporters in the capital today, telecom minister Kapil Sibal said the DoT would consider the recommendations of telecom regulator TRAI.

"We will consider it," said Sibal.

The minister, however, did not specify what action his ministry will take.

The Telecom Regulatory Authority of India has also suggested a fine or a levy on telcos for failure to meet rollout obligations as an option to cancelling their licences.

Meanwhile, speculation is rife in the market about some of the operators benefiting from the licence being asked to be cancelled by TRAI. The focus now is on who would benefit if the 150 megahertz worth spectrum is returned to the government.

Telecom majors seem to be gaining on the bourses at the expense of start-ups with Bharti gaining 4 per cent, Idea Cellular rising 4 per cent and Tata Communications gaining 3 per cent on the Bombay Stock Exchange.