Airtel, Voda Idea fume over Rs 3,050-crore penalty

FC Investigative Bureau

Business, Companies

Apex body okays penalty for not giving Jio interconnection.

"We are extremely disappointed with the decision to impose penalty on the telecom operators," said Airtel

New Delhi: The Digital Communications Commission, the apex decision-making body of the Department of Telecom (DoT), on Wednesday approved imposing cumulative penalty of Rs 3,050 crore on Bharti Airtel and Vodafone Idea for not providing points of interconnection (PoIs) to Reliance Jio, invoking sharp reactions from the affected telcos.

"DCC has accepted Trai recommendation on penalty on Airtel, Vodafone Idea. It will send same recommendation to competent authority in government for their decision," Telecom Secretary Aruna Sundararajan told reporters on Wednesday.

In October 2016, Trai had recommended imposing a total penalty of Rs 3,050 crore on Airtel, Vodafone and Idea (now merged) for  denying inter-connectivity to Reliance Jio.

The penalty on Airtel and Vodafone works out to be about Rs 1,050 crore each. In case of Idea, it comes to about Rs 950 crore. Since Vodafone and Idea have now merged their businesses, Vodafone Idea will have to bear the burden of both the companies.

The regulator had, at that time, stopped short of recommending cancellation of their telecom licences saying it may lead to significant consumer inconvenience.

Trai's recommendation had come on a complaint by RJio that over 75 per cent of calls on its network were failing as incumbents were not releasing sufficient number of PoIs.

The DCC, last month, approved the penalty on Airtel and Vodafone Idea. But before imposing the penalty, it decided to seek Trai's views on revising the Rs 3,050 crore suggested penalty, citing the "present financial health of the sector".

The Telecom Regulatory Authority of India, however, maintained its stand saying it is not in a position to modify its previously recommended penalty.

"We are extremely disappointed with the decision to impose penalty on the telecom operators on the matter pertaining to providing the Point of Interconnect. This is despite the fact that the total number of POIs provided were more than sufficient for the projections provided on the number of customers," an Airtel spokesperson said.

The spokesperson argued that the requested points of interconnect were provided within the prescribed time limits and were more than the numbers requested for.

"All these facts were presented to the authorities. It is, therefore, disheartening that those facts have not been considered while taking this arbitrary decision of imposing the penalty," the spokesperson said.

In a statement, Vodafone Idea said: "This issue pertaining to points of interconnection has been examined by the Department of Telecom, various parliamentary and judicial authorities with no case for any default established... Further, the jurisdiction to decide any interconnection dispute between two service providers lies exclusively with Telecom Disputes Settlement and Appellate Tribunal (TDSAT)."

Citing reports, the statement said that it appeared that even the DoT panel examining regulator Trai's recommendations was not unanimous and in fact at least four committee members out of seven had differing views on the subject.

"...Supreme Court in its judgment dated 5 December 2018 clearly stated that proceedings under Trai Act have not been concluded due to absence of findings on some key aspects," it added.

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