Reliance Jio row: DoT to go slow on penalty on incumbent telecom operators

The Department of Telecommunications (DoT) is not likely to levy a penalty any time soon on incumbent telecom operators for not providing enough interconnect points to Reliance Jio as proposed by Trai.

According to sources, as an internal panel of DoT has to decide on the Trai recommendations on the issue of penalty and currently, the top priority of the department is financial stress of telecom sector, the penalty issue is not likely to be taken up soon. The sources further said even after the decision of the internal panel, Telecom Commission will take a final call on it.

Sectoral regulator Telecom Regulatory Authority of India (Trai) had reiterated its recommendations of levying penalty of Rs 3,050 crore on incumbent operators Airtel, Vodafone and Idea for not providing enough interconnect points to Reliance Jio which resulted in mass scale call failures. DoT had in February asked Trai to clarify on what basis it had recommended the penalty.

Replying to DoT, Trai in May clarified that the three operators were "intentionally denying and delaying" the provision of points of interconnects (PoIs) to Jio, "only to restrict a new entrant thus violating the terms and conditions of licence and regulations of the Authority which also caused a lot of inconvenience to the consumers."

Sources said that DoT will discuss the matter in detail before arriving at a decision. The operators can always challenge the matter in courts and that is the reason why DoT wants to do its due diligence before going ahead in levying the penalty, sources added.

Bharti Airtel had already expressed its disagreement with Trai's decision saying the regulator had recommended penalty on the basis of an incorrect assessment of the situation on ground. Others including Vodafone and Idea too had presented their view point on the issue of interconnect during their meetings with Trai last year.

Seeking clarifications from Trai on the matter, DoT had mentioned that the dispute was between operators on a host of other points but Trai said if the parties have any other disagreements, these must be resolved and quality of service parameters must not suffer at any point.

Also DoT is not likely to act against Bharti Airtel on a complaint by Reliance Jio alleging misuse of merger and acquisition (M&A) guidelines by the Sunil Bharti-led firm. Jio had sought that DoT should not approve the Airtel-Tikona deal unless Airtel pays Rs 217 crore as migration fee for using broadband wireless access (BWA) spectrum under the unified licence (UL).

It must be mentioned here that Airtel had already challenged a demand of Rs 436.09 crore raised by DoT as an entry fee for migration from ISP licence of Airtel Broadband Services Private Limited (ABSPL) to access services of Airtel in 2013. As the matter is currently in court, DoT will not raise a fresh demand regarding the Airtel-Tikona deal, which is similar to the earlier pact.

The story so far

  • In October, Trai recommended a penalty of Rs 3,050 crore on Bharti Airtel, Vodafone and Idea Cellular for not providing enough interconnect points to Reliance Jio

  • DoT in February asked Trai to clarify points and state basis for recommending penalty

  • Trai replied to DoT in May, reiterating its recommendation on penalty

  • DoT panel will discuss the matter and a final call will be taken by the Telecom Commission

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