DCC asks Trai to review Rs 3,050 crore penalty on Vodafone Idea and Airtel

The apex decision-making body in the telecom ministry, the Digital Communications Commission (DCC), has asked telecom regulator Telecom Regulatory Authority of India (Trai) to review its stand before imposing a Rs 3,050 crore penalty on Vodafone Idea and Airtel for not providing points of interconnection (PoIs) to Reliance Jio.

Amid a financial stress in the sector, the DCC has sought the Trai to review the penalty amount.

A senior official of the department, said, “We have sent the matter to Trai for review.” He, however, did not divulge details on the quantum of penalty. In earlier meetings, the DCC had failed to take a decision on the matter.

The penalty on Airtel and Vodafone works out to Rs 1,050 crore each. In the case of Idea, it comes to about Rs 950 crore. Merged Vodafone Idea, however, would have to pay a penalty of Rs 2,000 crore.

While the DCC has agreed to impose a penalty on the incumbent telcos, it has asked the regulator to review the amount of penalty as the telcos are grappling with a huge debt — the incumbents have a combined debt of over Rs 2 trillion and are striving to reduce it.

Both Airtel and Vodafone Idea have recently concluded their rights’ issues to pare debt. Both the companies have raised Rs 25,000 crore each from their respective offers.

While DCC approved imposing penalty on the companies, it disagreed with a proposal of one of the secretaries to fine Reliance Jio as it “too failed to deliver quality service to customers.” 

“A secretary from a nodal ministry said the penalty should be apportioned and applied on Jio as well. His point was whether the responsibility of providing quality of service by a primary licence holder be shifted on others? However, DCC members did not agree to the view of imposing penalty on Jio,” the source said.

In October 2016, Trai had recommended imposing total penalty of Rs 3,050 crore on Airtel, Vodafone and Idea (before merger) for allegedly denying inter-connectivity to newcomer Reliance Jio.

The regulator stopped short of recommending cancelling their telecom licenses, saying it may lead to significant consumer inconvenience.

Trai’s recommendation came after a complaint by Jio that over 75 per cent of calls on its network were failing as incumbents were not releasing sufficient number of PoIs.
With inputs from PTI