DoT bid to save paging sector

NEW DELHI, March 10: The Department of Telecommunications DoT is working on a major package for the revival of the paging industry which h...

NEW DELHI, March 10: The Department of Telecommunications DoT is working on a major package for the revival of the paging industry which has been in the doldrums for some time now. The DoT has handed over to the Bureau of Industrial Costs and Prices BICP the task of studying the extent of the financial problems being suffered by paging companies.

The BICP is already conducting a similar study for the cellular companies which have approached the government for similar concessions 8211; extension of the licence period and deferment in the payment of the third year licence fees. The move is being viewed as a knee-jerk reaction to the fact that at least nine paging companies are currently involved in litigations with the DoT. These companies approached the Telecom Regulatory Authority of India TRAI for intervening when the DoT imposed penal action on them for non-payment of licence fees and ordered encashment of their bank guarantees. When these companies approached the TRAI which stayed DoT from encashingtheir bank guarantees, the DoT dragged the issue to the Delhi High Court.

Most paging companies in the major cities of India are in the third year of operation with nearly Rs 168 crore as licence fees falling due between June, 1997 and May 1998. None of these companies have been able to keep upto their third year commitments. Apart from this, nearly Rs 30 to 40 crore are due from the paging companies operating in state circles. Several of these companies have not found the market growing at a rate they had originally projected and hence have been finding the going tough and have approached the government for concessions.

The package being worked out by the DoT include easing of equity norms for paging companies, deferment of licence fees payment by paging companies, waiving of liquidity damages for late provision of services by companies and exempting companies from paying performance bank guarantees.

The DoT has veered around to the view that paging companies be allowed to change their equity holdingso as to completely change their original promoters, both Indian and foreign, so long as the direct foreign equity holding does not exceed 49 per cent.

So far as the issue of deferment of the third year licence fees is concerned, the matter will be examined by the BICP following which the DoT will then decide the legibility of the claims of financial ill-health of the industry. Licence conditions for paging companies had fixed licence fees for the first three years of the licence wherein 50 per cent of the licence fees were to be paid in the third year.