Modicom drags DoT to TRAI

While there is nothing new in companies dragging the DoT to the TRAI whenever it has resorted to invoking their bank guarantees for defaulting on licence overdues, what has caused a flutter is the fact that the move is likely to create a wider wedge within the cellular operators as the TRAI has now directed Modicom to give details of the companies who have benefitted from DoT’s discriminatory attitude and club them alongwith the DoT as the defendants against whom the petitionhas been filed.

Modicom is a company promoted by B K Modi who is also chairman of the Cellular Operators Association of India (COAI). The COAI’s unity, it may be recalled, is already under great stress and fresh elections are expected to be held by the end of this month to usher in a new team at the COAI.

Modicom has alleged that the discriminatory treatment by DoT has vitiated the "level playing field" especially as its competitors in both Punjab and Karnataka – Essar and J T Mobiles – have been given concessions whereas Modicom, which has never defaulted till the end of its second year payments has been singled out for harsh treatment.

Modicom was required to step up its bank guarantees from the present level of Rs 75 crore for both circles to Rs 242 crore – Rs 127 crore for Karnataka and Rs 115 crore for Punjab – equivalent to their third year licence fees.

Modicom has sought that the TRAI restrain the DoT from either encashing its bank guarantees or imposing any liquidated damages on the companyfor failures to keep up with the roll-out plans for their networks as in the licence agreement till such time that the government takes a final view on the concessions like moratorium and the extension of the licence period.

Further the company has asked that the DoT be directed to treat May 30, 1997, as the effective date of the licence as it was the day when the company received FIPB clearance for investments through their Mauritius-based subsidiary in the network. The TRAI has scheduled the case for a final hearing on August 11.