The Telecom Regulatory Authority of India (TRAI) has issued a show-cause notice to state-owned telecom operator Bharat Sanchar Nigam Limited (BSNL) for its failure to comply with the Telecommunication Interconnection Regulation 2018, according to a report by Financial Express. The notice served to BSNL in May, highlighted the company's lack of adherence to the regulatory framework governing network connection arrangements between telecom operators.
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PoI Regulations
According to the report, the regulations cover a framework to facilitate seamless connectivity of calls and SMS messages to consumers across different networks. The framework also includes the provision of bank guarantees by telcos to ensure timely payments between operators in specific circles and the implementation of point of interconnections (PoI) for efficient traffic management of call/SMS services.
The report quoted sources familiar with the matter stating BSNL has not provided bank guarantees to telecom operators such as Vodafone Idea, Bharti Airtel, and Reliance Jio for circles where it owes payments. Additionally, the state-owned telco has failed to establish the necessary PoIs for outgoing traffic, which has resulted in the violation of interconnection norms.
Show-cause notice to BSNL
According to Officials quoted in the report, the show-cause notice was sent to BSNL in May, but the company has not responded yet. This violation of regulations has come to the limelight seven years after TRAI recommended a penalty of Rs 3,050 crore on Airtel, Vodafone, and Idea (when they were separate entities) for allegedly denying inter-connectivity to Reliance Jio, a new player in the market then.
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Based on regulations, failing to comply may result in a financial penalty of up to Rs 100,000 per day per service area for each instance of non-compliance. In the case of BSNL, the penalty could potentially reach Rs 1,000 crore as they have not adhered to the regulations from the beginning, the report quoted the sources.
When an Airtel user makes a call or sends a text message to a user on a BSNL or Vodafone Idea network, the process runs smoothly due to an interconnection agreement between the telcos. This agreement includes the payment of network usage and carriage charges by one telco to another in the form of bank guarantees.
Impacting Quality of Service
However, if the required Points of Interconnection (PoIs) are not available, the quality of service for consumers in areas where BSNL has a large customer base can be affected. According to experts whom the report cited, this can also impact the quality of connections for other telcos, as some companies may violate interconnection norms.
"Of course, it affects the quality of services but it is more of a level-playing field between the telcos. BSNL has not complied with the regulations from the day they were notified," the report quoted an executive at a telecom operator who said on the condition of anonymity.
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The executive the report quoted stated that BSNL's declining market share means that its current violations are not impacting other telcos significantly. However, BSNL has been violating regulations by requesting bank guarantees from telcos for an amount equivalent to three months of gross billing, whereas TRAI regulations state that bank guarantees should only be given for an amount equivalent to two months of net billing. Net billing refers to the amount left after receivables, and payables have been deducted.
