Is Kingfisher's return raising hackles of Jet and IndiGo?
Tata pulls out of Cable & Wireless bid

Corporate Apr 18, 2012

Trai's move: No refunds for Telcos who lost licences

By Sindhu Bhattacharya

New Delhi: With the Telecom Regulatory Authority of India (Trai) on Wednesday virtually closing the door on any exit policy for telcos - and with it any prospect of refunding licence fees - companies like S Tel, Etisalat and Loop perhaps stand to lose the most.

These companies have already announced plans to exit the Indian market and telecom industry experts point out that Trai's recommendation on not refunding licence fees is meant to prevent any compensation claims by these operators in the near future.

Of course, the Trai move may not stop them from going to court since the decision to close shop was the result of the cancellation of their licences by the Supreme Court.

Loop Telecom has already sought Rs 2,800 crore as refund from the government in entry fees, bank guarantees and other investments.AFP

Loop Telecom has already sought Rs 2,800 crore as refund from the government in entry fees, bank guarantees and other investments. Reports suggest that S Tel has also asked for about Rs 1,700 crore.

In its recommendations, Trai has ruled out the need for an exit policy for all kinds of telecom licences. For those licences which stand cancelled after the Supreme Court order, it has said "The Authority does not agree with the argument of one of the stakeholders that the licensees have the option of filing a curative petition to the Supreme Court and also file clarification application/s and in the event they are successful in getting relief from the Supreme Court, the original considerations which led to the proposal of an Exit Policy would become relevant once again. The Authority cannot formulate a policy based on the stipulations or likely outcome of a futuristic event. Accordingly, the Authority is of the opinion that, at present, there is no need for an Exit Policy in respect of these UAS Licensees."

The regulator has said that the entry fee paid by all licensees will continue to be non-refundable and an advance notice of 60 days to surrender licences also remains applicable.

by Sindhu Bhattacharya

Related Stories.