Trai has recommended a Rs 3,050 crore cumulative penalty on Airtel, Vodafone and Idea for allegedly denying enough points of interconnection to Reliance Jio
New Delhi: The telecom department will soon meet officials from Bharti Airtel Ltd, Idea Cellular Ltd and Vodafone India Ltd to hear their pleas against the Telecom Regulatory Authority of India’s (Trai) recommendation of a Rs3,050 crore cumulative penalty for allegedly denying sufficient points of interconnection (PoI) to Reliance Jio Infocomm Ltd, multiple people aware of the development said.
“We had asked the three operators to make their presentations by December 6. Idea Cellular and Airtel have requested us to defer the meeting. We will reply to them. Vodafone has not responded so we are assuming they will come (on 6 December),” a senior official at the Department of Telecommunications (DoT) said, requesting anonymity.
“The department has asked us to come and make our case as to why the penalty is not valid,” an official at one of the operators said on the condition of anonymity.
The companies did not respond to an emailed questionnaire seeking details of the development.
In October last year, the telecom regulator had recommended to the government that a penalty of Rs1,050 crore each be imposed on Airtel and Vodafone, and Rs 950 crore on Idea, for allegedly denying points of interconnection to Reliance Jio.
Reliance Jio, the telecom arm of Reliance Industries Ltd, which started operations in September last year, complained to Trai that a large number of calls on its network were failing as incumbent operators were not providing sufficient points of interconnection.
In February this year, the Telecom Commission, the highest decision-making body at DoT, sought clarifications from the regulator about the basis for calculating the penalty and provisions of the law under which the penalty had been recommended.
Responding to this, the regulator in May wrote to the department defending its stand. Trai stated that the licence agreement mandated that the licensee will be responsible for maintaining quality of service as mandated by the licenser or Trai, and any violation is liable to be treated as breach of terms and conditions of the licence.
While non-compliance of terms and conditions of the licence warrant the revocation of the licence, Trai in May said it recommended a penalty as a revocation of licence would inconvenience consumers.
The regulator had then also reiterated that Reliance Jio had placed its demand with the three operators well in advance, based on its subscriber and traffic projections, to ensure communication between subscribers of networks. Denying sufficient points of interconnect was anti-consumer, against public interest and aimed at stifling competition in the sector, Trai had said. Points of interconnection are used to connect two telecom operators’ networks to complete a phone call.
The issue of interconnection has been a bone of contention among operators. In February, Airtel and Reliance Jio had a bitter exchange on the issue when the former said it had provided sufficient points of interconnection to Reliance Jio, enough to serve more than double the number of users the latter claimed to have.
Airtel had then also alleged that Reliance Jio’s claims of inadequate interconnection capacity were meant to cover up for technical issues in its own network, as well as its inability to activate the points of interconnection provided.
Responding to this, Reliance Jio had said that Airtel’s claim was misleading and that inadequate points of interconnect had led to service issues for the former’s customers.
It would now be up to the department to accept or reject the regulator’s recommendations of a penalty.
If the recommendation is accepted, it could financially impact incumbent operators that are in the midst of a bruising tariff war started by the new entrant Reliance Jio.Image Copyright: Google