Airtel, Voda Idea are penalised with Rs 3050 Crore Fine

The Digital Communications Commission (DCC) approved the recommendation of the Telecom Regulatory Authority of India (TRAI) to fix a total penalty of Rs 3,050 crore on Bharti Airtel and Vodafone Idea for violating their license agreement and denial of interconnection to new player Reliance Jio.

The apex decision-making body of the telecom sector, DCC, comprises members from several key ministries and is chaired by DoT secretary, will now send its verdict to the Department of Telecommunications (DoT) for the final decision. The affected telcos are likely to move court once the DoT formalises the decision.

After detailed discussions, it was decided that the DCC will accept the recommendations of TRAI to levy penalty and recommend accordingly to the government,” DoT Secretary Aruna Sundararajan told reporters after a meeting. The penalty on Airtel and Vodafone works out to Rs 1,050 crore each. In the case of Idea, it comes to about Rs 950 crore. Merged Vodafone Idea, however, would have to pay a penalty of Rs 2,000 crore.

Spokesperson of Airtel says, said the company was “extremely disappointed’’ with the DCC move as the total number of PoIs provided were more than sufficient for the projections provided on the number of customers. “Upon receipt of the formal communication intimating the levy of penalty, we will approach the appropriate forum,’’ he said, adding that the company has complete faith in the judicial process and the law of the land.

Vodafone Idea said, “as India’s leading telecom service provider, we abide by stringent norms of governance and compliance with all applicable laws and regulation while conducting our business in an ethical and conscientious manner. We will explore all options, including seeking legal recourse to protect our interests. While the DCC had agreed to impose a penalty on the incumbent telcos last month, it had asked the regulator to review the amount of penalty in view of the financial stress in the industry with an accumulated debt of over Rs 2 trillion.

Both Airtel and Vodafone Idea had recently concluded their rights issue to pare debt. They raised Rs 25,000 crore each from their respective offers.

TRAI’s recommendation came after a complaint by Jio that over 75 percent of the calls on its network were failing as incumbents were not releasing sufficient number of PoIs.