India Reliance Infocomm: Has Paid INR1.5 Billion Penalty To Government

NEW DELHI -(Dow Jones)- Reliance Infocomm Ltd., India's largest mobile phone service operator, said it has paid INR1.5 billion ($34 million) to the government to comply with a recent telecommunications court ruling.

Friday, the Telecom Dispute Settlement Appellate Tribunal upheld the government's decision to impose a INR1.5 billion penalty on Reliance for disguising international calls as local calls. The government had said Reliance's action was a bid by the company to avoid paying a levy called the Access Deficit Charge, or ADC.

Although Reliance paid the penalty, the company maintained it hadn't done anything wrong.

"There has been no impropriety on our part," Reliance said in a press release. "We will explore all avenues to establish that the service provided has been in accordance with the license conditions."

The company didn't explain the steps it will next take on the issue.

The ADC is a levy collected by the Indian government from local telecom operators to subsidize the unprofitable operations of Bharat Sanchar Nigam Ltd (BSNL.YY), or BSNL. The Indian government owns a majority stake in BSNL.

-By Ruchira Singh; Dow Jones Newswires; +91-11-2307 4020; ruchira.singh@dowjones.com

-Edited by Sharon Vong

(END) Dow Jones Newswires"

Posted to the site on 7th March 2005