Bharti Airtel and Vodafone Idea Announce Plans for Challenging Penalty Order from DoT

Bharti Airtel, Vodafone India and Idea Cellular were alleged that they denied points of interconnection to Reliance Jio Infocomm back in 2016 during the launch of telco's services

Highlights
  • Following this, Trai has levied hefty fines on Bharti Airtel and Vodafone Idea
  • The DCC has asked the Trai to review the fines given the sector's financial health

Allegedly, Vodafone Idea and Bharti Airtel, two of the biggest telecom operators in the industry denied points of interconnection (PoI) to the Mukesh Ambani led Reliance Jio Infocomm back in 2016 during the launch of its service. As such, the Department of Telecommunications (DoT) has been talking about levying a hefty penalty on both of these telecom operators. However, as per a new report from ET, both Bharti Airtel and Vodafone Idea are readying themselves to challenge any penalty order from the DoT for allegedly denying Reliance Jio Infocomm points of interconnection.

Bharti and VIL to Approach Court or TDSAT to Challenge Penalties

Right now, Bharti Airtel and Vodafone Idea are awaiting any penalty order which might come their way through DoT. Then to challenge this penalty order, both the telcos will either head to court or the Telecom Disputes Settlement Appellate Tribunal (TDSAT), said the sources aware of the matter. Even then, the passing of the penalty order from DoT won’t be swift since the sector regulator, Trai, is looking at the penalties to judge whether the amount is appropriate or not. A person aware of the ongoings in one of the telcos said, “The telcos will definitely challenge penalties, but we are awaiting DoT’s notice. It could be a month or two for penalty charges to finally come to us.”

Another person said that there were two points available which formed the basis of challenge against the penalties. Firstly, he said that the points of interconnection are required to be provided within 90 days of being asked for, but they were provided in less than 45 days. Secondly, the quality of service needs to be checked by the regulator by observing the network for 30 days, whereas Trai has fined the telcos by monitoring the network only for a day.

Total Fines Levied on Telcos Worth Rs 3,050 Crore

Earlier, Trai had suggested that each telco, Vodafone India and Bharti Airtel be levied with penalties of Rs 1,050 crores, and the penalty for Idea Cellular was Rs 950 crores. Notably, the department had asked for an explanation on the penalties which were quoted by the regulator. Back in 2017, Trai had said that the rules point towards cancellation of licences for the telcos in case of non-compliance with the norms. However, to not inconvenience the subscribers, the regulator had opted to levy fines.

It is also worth noting that on Tuesday, the Digital Communications Commissions (DCC) had asked the sector regulator, Trai to review the total amount of fines looking at the poor financial health of the industry. While posed with questions, Bharti Airtel and Vodafone Idea did not return any answers.

Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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dragonmonkNikhil Mumbai-PuneKiran Fernandes | GoaKunaltri_vis Recent comment authors
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Kiran Fernandes | Goa
Kiran Fernandes | Goa

They’ve gotta be penalised because they played this same game with other operators who were just coming into the market. Denying PoI would make them all stick to the AVoId cartel, rather than their respective networks. They’ve definitely gotta be penalised for their unethical behaviour back then.

dragonmonk
dragonmonk

@kiran Jio played just as dirty by offering below-cost data and voice service driving quite a few competitors out of business. Guess what? They will never be penalized because… well…

Kunal
Kunal

On purpose , poi were not provided by avoid. Calls from jio were not connecting & vice versa.

The cartel was playing negative by denying the new comer to perform.

They should be penalised.

Love Airtel
Love Airtel

Then what about predatory pricing by Jio? Giving away free service for years under guise of trial with the intent to destr5all competition?

Kunal
Kunal

There were no rules suggesting specified trial period (free service) before official launch of any operator. Dot never expected before Jio entry that any operator could provide free service for a long time . Now the rules are in place. Secondly , before Jio entry – there was no competition in the market. Avoid was dominating with almost 80% revenue share. Avoid worked from a common board room . All three had similar data & calling plans . Remember 250 per GB. There was no change in their market share . All three had their leadership circles in which other… Read more »

Nikhil Mumbai-Pune
Nikhil Mumbai-Pune

I agree with what you said but rock bottom tariffs isn’t good from future perspective.

Kunal
Kunal

Even at present tariffs , Jio ‘s turnover last year has touched Forty thousand crores & made a reasonable profit. In the current year with the same tariff base , it is set to cross fifty thousand crores. They still have huge value unlocking . Jio fiber & d2h will provide a major boost to revenues along with a higher Margin. This may increase the profit margins. Jio has created two independent units for tower & fiber. Those are being sold to Brookfield , which will help them bring down the debt by half. Also with opening up of its… Read more »

Nikhil Mumbai-Pune
Nikhil Mumbai-Pune

I still don’t agree with this. In 2020,Jio won’t have the revenue you mentioned.

dragonmonk
dragonmonk

@kunal Don’t see increase in tariffs? They have already happened. Do you see Jio (or any other operator) offering an option to recharge with some amount and use it a-la-carte? Every operator’s ARPU has increased multiple times – compared to earlier – since Jio entered the market.

One can see the real expenses of Jio once they stop cooking books by sliding expenses under the rug under different headings.

dragonmonk
dragonmonk

@kunal And similarly, there were no rules that POI need to be provided ASAP. Both Jio and (possibly) Airtel/Vodafone/idea played dirty. Don’t need to bat for Jio. If Jio could get away with 250/GB, they would have too. The only reason Jio priced their plans low is to gain market share and drive away competitors out of business – they have succeeded in doing both.

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