World VoIP NewsForeign telcos face combined INR1 billion penalty for illegally offering servicesForeign telcos face combined INR1 billion penalty for illegally offering services

Foreign telcos face combined INR1 billion penalty for illegally offering services


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Foreign operators including AT&T, British Telecom (BT), Equant and Verizon may face combined penalties of up to INR1.1 billion (USD22.34 million), India’s Economic Times reports, after claims that they had operated ‘illegally’ by offering services in the country before receiving necessary licences.
Foreign operators including AT&T, British Telecom (BT), Equant and Verizon may face combined penalties of up to INR1.1 billion (USD22.34 million), India’s Economic Times reports, after claims that they had operated ‘illegally’ by offering services in the country before receiving necessary licences.

The Ministry of Communications of Information Technology is understood to have set up a committee to examine the matter, and this committee has claimed that the telcos ‘circumvented licensing norms by offering services here [in India]’ prior to 2006 without licences, which it argued led to financial losses for the government. Having considered the responses of the foreign operators accused on such wrongdoing, the committee has recommended that AT&T be slapped with an INR860 million penalty, while BT and Equant face INR120 million fines. Verizon meanwhile may see a smaller charge of INR500,000. All of the accused have denied any wrongdoing, and claim that they did not provide services directly to customers in India, while also adding that they were not required to take licences, as the services were offered by their Indian partners.

A previous DoT committee which had been formed to examine this issue alleged that 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. It argued that these foreign players had not paid a one-time entry fee of INR250 million (prior to 1 January 2006) plus 15% of their annual revenues as levies for offering long-distance services in India. The DoT subsequently called on the Central Bureau of Investigation (CBI) to study the matter, which in its report had said evidence pointed to a ‘cognizable offence’.

The committee’s report, which called for financial penalties, was submitted to the Department of Telecommunication (DoT) on 15 December 2009. At that time however local partners of the aforementioned operators, such as Bharti Airtel, Tata Communications and Reliance Communications (RCOM), have been informed that they are not under investigation. Meanwhile, the regulator will only be able to implement these latest recommendations only after they are approved by the Telecom Commission, the country’s highest decision making body, and communications and IT minister A Raja.


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