Bharti explores legal options against DoT's penalty notice

The company said the DoT had not given it a proper hearing

Bharti Airtel, the country’s largest telecom operator by subscriber base, is exploring legal options following the Rs 650-crore penalty notice from the department of telecommunications (DoT) for alleged violation of norms  Subscriber Local Dialing (SLD) between 2002 and 2005.

In a statement on Thursday, the company expressed disappointment over the notice, stating the demand “is devoid of any merit and has no justification, both, on facts and in law”.

According to Bharti, the company had launched the SLD service in 2002 and had fully satisfied the sector regulator on this service and its various aspects. “The regulator had found this service to be customer friendly and in compliance of the licence conditions. The total revenue this SLD service generated for Bharti Airtel was a few lakhs of rupees, a fact fully known to DoT. Yet strangely, without as much as giving us a proper hearing, the DoT has, after eight years issued a demand notice of Rs 650 crore in complete disregard of the natural process of justice,” the company said.

Last month, Bharti Airtel’s joint managing director and chief executive officer, Gopal Vittal, had written to Communications and Information Technology Minister Kapil Sibal, stating the company should be given an opportunity to explain its position before any final decision was taken. But, DoT rejected the plea.

“We are disappointed the DoT — which has the bounden duty to act rationally —  has thought it fit to issue such a baseless penalty order, leaving us with no choice, but to litigate. We wish DoT was mindful of the damage such meritless demands have on investor sentiment and the frustration such actions cause to the companies engaged in vital infrastructure,” Bharti said, adding, “We urge the DoT to set out a cogent policy on imposition of penalties so telecom companies can operate in a rational and transparent environment.”

DoT committee had noted in its recommendations that Bharti Airtel violated the national long-distance/international long distance licence conditions in 13 circles between 2000 and 2005.

According to its report, Bharti Airtel had not stopped the service at least up to June 2005 even after specific directions from the DoT which were issued on

June 20, 2003. In May 2005, The Telecom Regulatory Authority of India had said Bharti Airtel was liable for termination of its licences.

But the regulator did not recommended termination of Bharti’s licences as it would affect a large number of subscribers.