Digital Communications Commission's decision is a setback to Airtel and Voda Idea, already buried under a pile of debt and are facing losses
The penalty is for denying interconnection ports to Reliance Jio Infocomm Ltd when it started operations three years ago
New Delhi: The Digital Communications Commission (DCC) on Wednesday upheld the telecom regulator’s decision to levy a penalty of ₹3,050 crore on Bharti Airtel Ltd and Vodafone Idea Ltd for denying interconnection ports to Reliance Jio Infocomm Ltd when it started operations three years ago.
DCC is a government panel comprising top officials from the telecom department, ministry of electronics and information technology, NITI Aayog and the department of economic affairs.
The decision comes as a setback to Bharti Airtel and Vodafone Idea, which are already buried under a pile of debt and are facing mounting losses, amid a lingering tariff war triggered by the entry of Reliance Jio in late 2016.
“Today, after detailed discussion it was decided that the DCC will accept Trai’s recommendations to levy penalty and recommend accordingly to the government (department of telecommunications or DoT)," telecom secretary Aruna Sundararajan told reporters on Wednesday. In the previous DCC meeting, the matter was referred back to the Telecom Regulatory of India (Trai) for a review, Sundararajan said, adding that the regulator wrote back saying it would not change its recommendations.
DCC’s recommendations will be sent to DoT now, which has also been studying the issue for almost three years since Trai first sent its recommendations in October 2016.
“DoT is the final authority to issue the penalty. It has the powers to take any decision," said Sundararajan.
The Cellular Operators Association of India (COAI), the industry body representing telecom operators, said it was disappointed with the imposition of a penalty of this magnitude at a time when the industry is reeling under financial stress. “We had earlier also said that this would simply extract more from the industry," said Rajan Mathews, director general of COAI.
Bharti Airtel said that given the recent forced consolidation due to financial stress in the sector, this decision would be an additional burden on the already stretched balance sheets of the operators, and would adversely impact the government’s vision of a digitally inclusive and empowered India.
“... the requested POIs (points of interconnection) 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," a spokesperson for Airtel said, adding that “upon receipt of the formal communication intimating the levy of penalty, we will approach the appropriate forum. We have complete faith in the judicial process and the law of the land".
A Vodafone Idea spokesperson said, “We will explore all options, including seeking legal recourse to protect our interests."
In October 2016, Trai had recommended to the government that a penalty of ₹1,050 crore each be imposed on Bharti Airtel and Vodafone India, and ₹950 crore on Idea, for allegedly denying PoIs to Reliance Jio.
This came after Jio in September 2016 complained to Trai that a large number of calls on its network were failing as incumbent operators were not providing sufficient interconnection ports. Points of interconnection are used to connect two telcos’ networks to complete a phone call.
Trai had then said 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 PoIs was anti-consumer, against public interest and aimed at stifling competition in the sector, Trai had then said.