“The DoT gave companies three weeks to pay the penalties,” a person familiar with the matter told ET. Airtel has to pay Rs 1,050 crore and Vodafone Idea has to pay Rs 2,000 crore.
The Telecommunications Regulatory Authority of India (Trai) recommended fines of Rs 1,050 crore each in 2016 to Vodafone India and Bharti Airtel for violating the license conditions regarding quality of service by not granting of suitable points of interest in Jio in 21 circles each.
“Frivolous and reasoned allegations”
Idea Cellular was fined Rs950 crore for breaking the rules in 19 circles. Points of interest are needed for voice calls to travel from one network to another – in this case, from the Reliance Jio network to those of Bharti, Idea and Vodafone.
Vodafone and Idea merged in August 2018. The DoT accepted the regulator’s recommendations in June 2019, but had not yet served the notices.
“We are deeply disappointed with the arbitrary and unfair request based on the 2016 Trai recommendations for point of interconnection arrangements to a new operator,” a spokesperson for Airtel said in a statement. “These allegations were frivolous and reasoned. Bharti Airtel prides itself on maintaining high standards of compliance and has always followed the law of the land. We will dispute the request and pursue the legal options available to us. “
Vodafone Idea did not respond to questions.
This follows the government’s announcement in mid-September of sweeping reforms aimed at relieving the over-indebted telecommunications sector and preserving a three-player private market. He announced a four-year moratorium on the payment of government contributions such as adjusted gross income (AGR) and spectrum payments, among other major relaxations.
The notices of application – which are in addition to Vodafone Idea’s statutory dues of over Rs 1.6 lakh crore – were issued the day Telecommunications Secretary Anshu Prakash left office. The new telecommunications secretary, K Rajaraman, takes office today.
After a bitter public battle over the granting of points of interest between Jio and the incumbents Vodafone, Idea and Airtel in preparation for the commercial launch of the telephone company owned by Mukesh Ambani, Trai had decided in October 2016 that the shares of ‘Airtel, Vodafone and Idea appeared. aimed to “stifle competition” and were “anti-consumer” and “against the public interest”. He had said that the three telecom operators deserved the revocation of their licenses – the most severe measure the authority can take – but, bearing in mind the inconvenience to consumers, he suggested the most financial penalties. high of Rs50 crore for each circle.
At the time, Airtel, Vodafone and Idea had rejected Trai’s findings, saying they hadn’t broken any rules. Vodafone had moved the Supreme Court against Trai’s recommendations. This case is ongoing.
As reported by ET on August 1, 2019, the sanctions had even divided the Digital Communications Commission (DCC) – the highest decision-making body of the DoT. But the DCC then adopted the majority verdict and supported Trai’s recommendations.
Two of the seven members objected to the levy, with another arguing that the penalty should be imposed on Jio instead. Another member had suggested that the blow to Airtel and Vodafone Idea should be mitigated by allowing them to spread the payment over 15 to 20 years while allowing a moratorium.
The DCC has the Telecommunications Secretary as chairman while other members include the Secretary of the Ministry of Electronics and Information Technology (MeitY), President Niti Aayog, the Secretary, the Ministry of Finance and officials of the Dowry.
The demand notices also come as the government works on another back-up plan primarily to leave more resources in the hands of telecom operators so they can go global. Telecommunications and IT Minister Ashwini Vaishnaw said in an interview with ET that the government will do everything in its power to strengthen the telecommunications sector.