DoT set to make yet another deadline farce

NEW DELHI, MAR 24: The Department of Telecommunications (DoT) is getting ready to making yet another farce of the deadline for paying up o...

NEW DELHI, MAR 24: The Department of Telecommunications (DoT) is getting ready to making yet another farce of the deadline for paying up outstanding licence fee dues. This time, at the receiving end of the favour is B K Modi’s Modicomm (now called Spice Communications) which will be the only company to get yet another relaxation of the deadline for coughing up its dues by March 31 now, instead of the earlier date of March 15 which the company failed to keep with the Government. The DoT is preparing to take the matter to the Cabinet next week.

Under the migration package, the Government had first fixed a deadline of January 31 for companies to pay all their pending dues as well as furnish bank guarantees of the requisite amounts. The Cabinet, on February 15, took a decision to extend this deadline till March 15. But following the Attorney-General Soli Sorabjee’s advise on the issue, every company was asked to submit an affidavit stating that if they failed to pay up by the March 15 date, the migration package would stand cancelled for them.

The affidavit notwithstanding, Modicomm matter is being taken to the Cabinet for a clearance so as to allow the company another two weeks to pay up. Not only this, the Government is set to go back on its earlier decision to terminate licences of companies who failed to pay up their dues by March 15.

Giving reasons for “accommodating” Spice, the draft Cabinet note states “they have explained that they have tied up their finances with financial institutions and are fairly certain that they will be able to clear their dues bu March 30. Further, they have requested not to withdraw the Migration Package and to levy any further additional penalty over and above already existing ones and to exempt them from furnishing additional bank guarantees in view of their commitment to pay the outstanding dues.”

Apart from Spice, the matter of terminated licences of Koshika, Aircell Digilink and J T Mobile will also be referred to the Cabinet for a final decision.

In the case of Koshika Telecom, belonging to the Usha Group of Vinay Rai, the draft Cabinet note suggests that the company’s terminated licences should be restored. It, however, states that the notional extension of six months should be given to Koshika for its three terminated licences for Uttar Pradesh (west), Bihar and Orissa and for the existing licence for UP (east).

What will come as a major jolt to the company, however, is the fact that the draft note suggests that even during the period since May 22, 1999, when the company’s licence had been terminated, Koshika will have to pay licence fee to the Government.

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Further, Koshika will have to pay 40 per cent of their dues along with interest charges within 15 days of being offered the migration package. Also the company will have to replenish their bank guarantees which have been encashed by DoT. Within 45 days of the offer of the migration package, Koshika will have to pay the remaining 60 per cent outstandings.

The note also recommends that the cut-off date for the three licences should be either November 1, 1999, for Bihar, Orissa and UP (west) and December 1, for UP (east). The note says that the company should, within seven days of the offer, give an unconditional acceptance of the package. However, the note does not envisage any deadline for DoT to extend the package to the company, after obtaining the Cabinet clearance.

The note, however, rules out any change in effective date or normalisation of the licence fee schedule for the company.