AT&T, BT, Equant, Verizon face licence problem
08-01-2010
AT&T, BT, Equant and Verizon may have to jointly pay out about Rs 110 crore (Rs1.1 billion) as penalty for offering services 'illegally' before obtaining licences to operate in India. All the foreign carriers have denied any wrongdoing.
A committee set up by the communications ministry to look into the issue said these operators had "circumvented licensing norms by offering services here" prior to 2006 without licences, leading to losses to the exchequer, and also recommended that the financial penalty be imposed. This committee's report was submitted to the department of telecom on December 15, 2009.
The committee has given a clean chit to the partners of these international telcos - Bharti Airtel, Tata Communications and Reliance Communications. This committee has proposed that criminal cases not be levied against these foreign telcos despite the Central Bureau of Investigation (CBI) recommending the same.
All these foreign operators now offer national and international long-distance services in India (carry STD and ISD calls), and over the past three years, each of them have obtained commercial licences to operate here.
An earlier DoT committee set up to examine this issue had alleged that these international operators had provided long-distance services to customers in India by tying up with Indian counterparts leading to huge losses in levies to the exchequer. This earlier panel said the foreign players had not paid a one-time entry fee of Rs 25 crore (prior to January 1, 2006) plus 15% of their annual revenues as levies for offering long-distance services in India.
The DoT then asked CBI to examine the issue. CBI found that the evidence pointed to a 'cognizable offence'. The communications ministry then set up this latest committee headed by DoT's additional secretary (T). The DoT can implement the recommendations of this committee only after this is approved by the Telecom Commission, its highest decision making body and communications and IT minister A Raja.
The latest DoT panel, after examining the replies of the foreign carriers has recommended that AT&T be slapped with a Rs 86-crore penalty, BT and Equant (France Telecom) at just under Rs 12 crore, while Verizon be imposed a small fine of Rs 500,000.
For instance, with regard to AT&T, this committee said the operator had caused a revenue loss of Rs 34.57 crore between 2002 and 2006, and at a penalty rate of 150%, the totally amount the company will pay works out to Rs 86.43 crore.
All the foreign carriers have denied any wrongdoing. They all had made detailed presentation before the latest committee to emphasise that they did not provide services directly to customers in India, adding that they were not required to take licences, as the services were offered by their Indian partners. These foreign carriers also claimed they did not cause any losses to the exchequer in India as both and their domestic partner here had paid all taxes, levies, including service tax and income tax on their non-licensed business activities.
Sources: Economic Times, PTI
A committee set up by the communications ministry to look into the issue said these operators had "circumvented licensing norms by offering services here" prior to 2006 without licences, leading to losses to the exchequer, and also recommended that the financial penalty be imposed. This committee's report was submitted to the department of telecom on December 15, 2009.
The committee has given a clean chit to the partners of these international telcos - Bharti Airtel, Tata Communications and Reliance Communications. This committee has proposed that criminal cases not be levied against these foreign telcos despite the Central Bureau of Investigation (CBI) recommending the same.
All these foreign operators now offer national and international long-distance services in India (carry STD and ISD calls), and over the past three years, each of them have obtained commercial licences to operate here.
An earlier DoT committee set up to examine this issue had alleged that these international operators had provided long-distance services to customers in India by tying up with Indian counterparts leading to huge losses in levies to the exchequer. This earlier panel said the foreign players had not paid a one-time entry fee of Rs 25 crore (prior to January 1, 2006) plus 15% of their annual revenues as levies for offering long-distance services in India.
The DoT then asked CBI to examine the issue. CBI found that the evidence pointed to a 'cognizable offence'. The communications ministry then set up this latest committee headed by DoT's additional secretary (T). The DoT can implement the recommendations of this committee only after this is approved by the Telecom Commission, its highest decision making body and communications and IT minister A Raja.
The latest DoT panel, after examining the replies of the foreign carriers has recommended that AT&T be slapped with a Rs 86-crore penalty, BT and Equant (France Telecom) at just under Rs 12 crore, while Verizon be imposed a small fine of Rs 500,000.
For instance, with regard to AT&T, this committee said the operator had caused a revenue loss of Rs 34.57 crore between 2002 and 2006, and at a penalty rate of 150%, the totally amount the company will pay works out to Rs 86.43 crore.
All the foreign carriers have denied any wrongdoing. They all had made detailed presentation before the latest committee to emphasise that they did not provide services directly to customers in India, adding that they were not required to take licences, as the services were offered by their Indian partners. These foreign carriers also claimed they did not cause any losses to the exchequer in India as both and their domestic partner here had paid all taxes, levies, including service tax and income tax on their non-licensed business activities.
Sources: Economic Times, PTI
