The Department of Telecommunications (DoT) has put a fine on Vodafone Idea and Bharti Airtel of Rs 3,050 crore in cumulative penalties for flouting licence conditions by denying Reliance Jio Infocomm adequate points of interconnection (PoIs) in 2016.
This impacted the latter’s quality of services.
As per the DoT issued notices the two companies are required to pay the total sum within three weeks. Airtel has to pay Rs1,050 crore and Vodafone Idea has to pay Rs2,000 crore.
In 2016, the Telecom Regulatory Authority of India (TRAI) had recommended fines of Rs1,050 crore each on Vodafone India and Bharti Airtel for violating licence conditions over quality of service by not granting adequate PoIs to Jio in 21 circles each.
Meantime Idea Cellular was also fined Rs950 crore for flouting rules in 19 circles. However, Vodafone and Idea merged in August, 2018, pushing up Vodafone Idea’s fine to Rs2,000 crore.
PoIs are required for voice calls to go through from one network to another – in this case, from Reliance Jio’s network to those of Bharti, Idea and Vodafone.
While the DoT had accepted the regulator’s recommendations in June 2019, it had not served the notices till now.
Still the timing is such that the sector is disappointed given that it follows the government’s recent slew of measures to help the debt-laden sector.
“We are deeply disappointed with the arbitrary and unfair demand based on TRAI recommendations of 2016 relating to provisions of point of interconnect to a new operator,” an Airtel spokesperson said in a statement.
“These allegations were frivolous and motivated. Bharti Airtel takes pride in maintaining high standards of compliance and has always followed the law of the land. We will challenge the demand and pursue the legal options available to us.”
Background
There was a bitter public fight over grant of PoIs between Jio and incumbents Vodafone, Idea and Airtel in the lead up to the commercial launch of the Mukesh Ambani-owned telco.
At that time, TRAI had ruled that the actions of Airtel, Vodafone and Idea appeared to be aimed at “stifling competition” and were “anti-consumer” and “against public interest.” It had said that the three telcos deserved to have their licences revoked – the severest action that the authority could take – but, keeping in mind consumer inconvenience, it suggested the highest financial penalties of Rs50 crore for each circle.
At the time, Airtel, Vodafone and Idea had rejected TRAI’s findings, saying they had not violated any rules. Vodafone had moved the Supreme Court against TRAI’s recommendations. That case is still ongoing.
In 2019 the penalties had split even the Digital Communications Commission (DCC) – the highest decision-making body in the DoT. But the DCC then went with the majority verdict and backed the TRAI recommendations.
Currently, these penalties come in addition to the huge aggregated gross revenue (AGR) and spectrum dues pending by both telcos and follows after the Centre’s September reforms giving the debt-pressed sector some relief.
Also, at a time when the government is working on yet another relief package to strengthen the sector by making more resources available to the telecom operators so that they may go global.