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Attorney General clears way for Rs3,050 crore penalty on Airtel, Vodafone, Idea

Trai had recommended imposing Rs1,050 crore penalty each on Airtel and Vodafone and Rs950 crore on Idea for violating quality of service rules


The DoT was awaiting AG’s opinion before proceeding on the penalty suggestion of Trai. Photo: Pradeep Gaur/Mint
The DoT was awaiting AG’s opinion before proceeding on the penalty suggestion of Trai. Photo: Pradeep Gaur/Mint

New Delhi: The government’s top law officer on Thursday approved the levy of penalties adding up to Rs3,050 crore on Bharti Airtel Ltd, Vodafone India Ltd and Idea Cellular Ltd—the country’s largest three telcos—over charges that they broke licence conditions.

The Telecom Regulatory Authority of India (Trai) had recommended the penalty after Reliance Jio Infocomm Ltd complained its network was facing call failures and congestion as these firms were refusing to release adequate numbers of points of interconnection (POIs).

This was viewed by the regulator as anti-competitive and anti-consumer and in non-compliance with licence conditions.

“I have approved the recommended penalty,” attorney general Mukul Rohatgi said.

ALSO READ | Reliance Jio free services: Airtel accuses Trai of being ‘mute spectator’

The matter will now be evaluated by the Department of Telecommunications (DoT).

When contacted, Sunil Bharti Mittal, chairman of Bharti Airtel, said matters related to penalties have been taken in a haste.

“We have taken our position very clearly that these penalties are completely unfounded and have been done in haste. We have written to Trai and DoT and what I understand is DoT has set up a committee to look into the penalty suggestion made by Trai and we all await the outcome of that, and based on the next set of actions by Trai or DoT, we will be able to act,” Mittal said. He said he was unaware of the AG’s decision.

Idea Cellular and Vodafone India did not respond to queries sent to them till the time of going to press.

In October, Trai had suggested a penalty of Rs50 crore each for 21 telecom circles, excluding Jammu and Kashmir, to be levied on Bharti Airtel and Vodafone India, respectively.

For Idea, the penalty of Rs50 crore was suggested for 19 circles, except Himachal Pradesh, Jammu and Kashmir and North-East.

ALSO READ | Reliance Jio free offer has created unfair competition: Airtel’s Sunil Mittal

“We will wait for and see how DoT takes it forward now that the legal opinion has been rendered. Anything to say before that is difficult,” said Rajan Mathews, director general at Cellular Operators Association of India.

The telcos, however, have always maintained they have continuously released PoIs from their end and have alleged network unpreparedness at Reliance Jio’s end.

Commenting on extended free services from Reliance Jio till 31 March 2017, Mittal said, “When something is offered for free, it impacts the industry, and we have approached TDSAT (Telecom Disputes Settlement and Appellate Tribunal) fighting against free services. Revenue and margin are being hit. However, for Airtel, there is least market share and traffic loss because of its brand resonance, pan-India 4G roll-out and management,” Mittal said.

Indicating consolidation in the industry, Mittal said, “This has to stabilize eventually. Right now, a new player has entered and is creating a place in market. There will be new order and strong 3-4 players in the market will emerge.”

In December, Bharti Airtel moved TDSAT against Trai for permitting Reliance Jio to extend free services beyond the 90 days stipulated for promotional offers, and charged the regulator with acting like a “mute spectator” to violations of tariff orders.

Following this, TDSAT directed Trai to submit a response from Reliance Jio and also decide on the allegations against Reliance Jio in “reasonable time”.

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