The Department of Telecommunication (DoT) is planning to issue a show cause notice to Sistema Shyam Teleservices Limited as the operator has failed to meet its third-year rollout obligations in Jammu & Kashmir circle. Accordingly, the DoT has proposed a penalty of Rs 700 million in liquidated damages on the operator.

As per the licence regulations, a mobile operator has to ensure coverage in 50 per cent of the total district headquarters in a service area within three years from spectrum allocation, to comply with DoT’s second phase rollout criteria. Failing which, the department can slap liquidated damages at Rs 500,000 per week for the first 13 weeks, at Rs 1 million for the next 13 weeks, and finally at Rs 2 million for the next 26 weeks, subject to a cap of Rs 700 million. For rollout defaults beyond 52 weeks, the DoT can terminate the mobile operator's permit.

As for SSTL, the DoT's vigilance wing in Jammu and Kashmir circle has noted that in case of SSTL’s fulfillment of 50 per cent rollout obligation, testing is not complete and service testing certificates have not been issued. Accordingly, the DoT's access services wing has recommended a show cause notice, along with a penalty to be issued to the operator in this regard.

SSTL was one of the operators whose licences were cancelled in February 2012 by the Supreme Court. The operator lost all its permits in India, with the exception of Rajasthan. Consequently, the operator downsized its operations by switching off networks in several circles. SSTL closed operations in the Jammu & Kashmir circle in March 2013.