The Department of Telecommunications (DoT) has backed penalties of Rs 3,050 crore on Bharti AirtelNSE -1.51 % and Vodafone Idea for allegedly denying RelianceNSE -1.56 % Jio Infocomm adequate points of interconnection (PoIs) in 2016, said people with knowledge of the matter. That would uphold the regulator’s recommendations in one of the most heated disputes in the sector’s recent history.
The telecom department’s view is set to be taken up by the Digital CommunicationsNSE 0.14 % Commission (DCC), the highest decision-making body of the department, at a meeting this week, government officials told ET. “Member, technology, has said that in the current case, owing to noncompliance of licence provisions and quality of service (QoS) norms, the telecom regulator’s recommendation of levying penalty is valid and may be accepted by the telecom department,” a senior official told ET. The telecom secretary as well as the member, financeNSE -3.24 %, are believed to have signed off on the opinion of the member, technology.
With the three senior most DoT officials having endorsed the regulator’s recommendation, the DoT is now taking it to the DCC, the official said. The DCC, previously called the Telecom Commission, is an inter-ministerial body and its members include secretaries from the ministry of IT, finance and department of industry, among others, and is headed by the telecom secretary, currently Aruna Sundararajan.
A final decision by the DCC will bring the curtains down — at least for the time being — on a three-year-old dispute ahead of and following the launch of commercial services by Jio in September 2016. Jio had then accused India’s older operators — Bharti Airtel, Vodafone India and Idea CellularNSE -2.40 % — of denying it adequate Po-Is to hurt its service. PoIs allow calls to be transferred from one network to another.
The Telecom Regulatory Authority of India (Trai) had in October 2016 upheld Jio’s complaint and recommended fines of Rs1,050 crore each on Airtel and Vodafone India and Rs 950 crore on Idea for violating rules on service quality. Vodafone and Idea, which merged operations in August 2018, had separately moved the Delhi High Court soon after the Trai decision. Vodafone Idea along with Airtel — financially stressed and posting losses at their India businesses — are expected to legally challenge any levy of penalties. Member, technology, Shiwa Shankar Singh’s opinion was sought by the DCC after a seven-member committee set up by the DoT had earlier this year ruled 4-3 against the penalty recommendation. Four had said the Telecom Disputes Settlement Appellate and Tribunal (TDSAT) had jurisdiction, not Trai. The commission had then sought Singh’s view on which agency had responsibility for maintaining service quality. The DoT’s view, upholding Trai’s suggestion, is also backed by legal opinion, said the people cited above.
The penalties issue had divided the telecom industry with the older operators on one side and Jio and Trai on the other. The Cellular Operators Association of India (COAI), which represents all of India’s major operators, in an unprecedented move, had levelled allegations of bias against the regulator. It had also moved the Prime Minister’s Office (PMO) in the matter. Jio and Trai had rejected all allegations of bias. Jio has since become a significant participant by offering voice and data services on its network at throwaway prices and radically altered the landscape of the telecom industry, leading to the merger between Vodafone and Idea and the exit of weaker companies.