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More penalties to hurt telcos
Apr 1, 2013

The telecom sector's woes have been deepening in the recent past. The excessive competition, cancellation of spectrum, high spectrum costs, are just some reasons for this. The situation was not helped by the announcement of penalties by the regulator. It has recently announced steep penalties on outstanding spectrum usage by the operators. Most operators were hit with this penalty. Even those, whose licenses were cancelled last year, were brought into the net of these penalties. The penalties would further hurt the margins and balance sheets of the operators. They would have little choice but to further burden themselves with more debt if penalties like these keep coming their way. Interestingly the highest incidence of the penalty falls on the government owned Bharat Sanchar Nigam Ltd (BSNL). The PSU has to pay the regulator almost Rs 9.5 bn. On one hand the government is strict with the penalties but on the other hand it has always had a soft heart towards bailing out the cash stripped PSUs. Given this attitude we wonder if the tax payers would be made liable for paying this fine.

Data Souce: Financial Express

This Chart Of The Day was published in The 5 Minute WrapUp - LIC is the government's ATM

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