New Delhi: The Digital Communications Commission on Wednesday upheld the Telecom Regulatory of India's (TRAI's) recommendation to levy a penalty of ₹3,050 crore on Airtel and Vodafone Idea for allegedly denying points of interconnect to Jio when it started mobile operations three years ago.
“The commission has suggested that the department of telecom go ahead with the penalty, without any change in amount," telecom secretary Aruna Sunderarajan said.
This will come as a setback to Airtel and Vodafone Idea, with both telcos making losses in a low tariff environment, while battling cheap prices from Jio.
In October 2016, the telecom regulator 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 Cellular, for allegedly denying points of interconnection to Reliance Jio. Vodafone and Idea have now merged to form India’s largest telco.
Reliance Jio, the telecom arm of Reliance Industries Ltd, which started operations in September last year, had then 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 2017, the Digital Communications Commission, the highest decision-making body of the Department of Telecommunications (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 2017 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 said it recommended a penalty since a revocation of licence would inconvenience consumers.
The regulator had 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 2017, Airtel and Reliance Jio had a bitter exchange on the issue when the former said it had provided sufficient points of interconnection to 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.
