Telcos Pay Penalties for Mobile Telephony Launch Delays

By Cindy Waxer December 29, 2010

The old adage “time is money” couldn’t be truer than in the case of at least three Indian telecommunication companies that must now pay a penalty to the federal government for a delayed rollout of its services. According to a Wall Street Journal report, Etisalat DB Telecom Pvt. Ltd., Loop Telecom Pvt. Ltd. and Unitech Wireless Ltd., have been forced to pay penalty fees for the delayed launch of mobile telephony services within the stipulated time.

The Journal reports that mobile telephony companies in India are required to rollout their services within a prescribed time – a year of receiving radio bandwidth, or otherwise face a penalty. Despite receiving notices from India's Department of Telecommunications earlier in December, the companies failed to launch on time, prompting a federal audit report on the issue of allotments of new licenses and bandwidth, which resulted in penalty fees.

Etisalat DB Telecom was required to fork over about $2 million for four service areas, the company said in a statement. And the Journal reports that an executive at Loop Telecom reveals the company had paid around $600,000 as penalty to the telecom department for three service areas. Unitech Wireless also admitted to paying a penalty.

Etisalat operates in 18 countries across Asia, the Middle East and Africa, servicing over 100 million customers out of a total population of approximately 1.9 billion people. In 2009, Etisalat reported annual net revenues of $8.4 billion and net profits of $2.4 billion, marking a 5 percent and 16 percent increase respectively, compared to 2008. Unitech Wireless was incorporated in 2008 and is based in Gurgaon, India with additional offices in Hyderabad, Kochi, Chennai, Patna, Bangalore, Bhubaneswar, Lucknow, Noida, Mumbai, Kolkata, Pune, and Ahmedabad, India. 

Edited by Tammy Wolf

TechZone360 Contributing Editor

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