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Payment date extended for telecom licence dues

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CIOL Bureau
New Update

BANGALORE: The Union cabinet has approved a proposal for extending the

deadline for payment of license fee dues of basic and cellular mobile operators

from January 31, 2000 to March 15, 2000 and has asked defaulting companies to

furnish a bank guarantee for the entire outstanding amount and interest by the

end of this month.

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Licensees should pay, along with the furnished bank guarantee, cash penalty

of 2 per cent per month on the short-fall of securitisation up to the date of

furnishing the bank guarantee, on proportionate basis for the number of days of

delay beyond December 31, 1999. In case the licensee clears the entire

outstanding dues on or before February 29, without furnishing any bank

guarantee, there will not be need to provide a bank guarantee any more. However,

the cash penalty of 2 per cent per month for not furnishing the bank guarantee

for the period starting from January 1, 2000 will have to be paid. The cabinet

also approved a proposal to allow licensees to pay the entire outstandings by

March 15, along with interest as per the license agreement, and additional

simple interest of 3 per cent per month for the period February 1 to March 3, on

a proportionate basis.

It may be noted that the Union finance ministry earlier reported to have

objected to extend the deadline when the Department of Telecommunications (DoT)

forwarded such a plea from the private telecom operators. After the cabinet

meeting, Information Technology minister Pramod Mahajan said all phone companies

will have to pay an additional simple interest of 3 per cent per month for the

period between February 1 and March 15.

The companies, however, have to give a suitable undertaking on affidavit for

being eligible for such extension, Mr Mahajan said. If telecom operators fail to

meet the above conditions, the government can withdraw the migration package -

from high up front license fee regime to revenue sharing formula - offered to

them without any further notice, the Minister said.

Sources said that the finance ministry was opposed to grant of extension and

had, in fact, suggested cancellation of licenses of the defaulting companies.

The cabinet said that failing to furnish the conditions approved by it, the

defaulters will be liable to automatic withdrawal from the migration scheme

without any further notice. Further, the government can take such legal remedies

as are open to it.

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