Bharti Airtel, Vodafone Idea may get DoT relief on penalties

The department of telecommunications (DoT) is likely to finally reject the Telecom Regulatory Authority of India’s (Trai) recommendation to levy a cumulative penalty of Rs 3,050 crore on Bharti Airtel and Vodafone Idea for not providing points of interconnection to Reliance Jio in 2016 when it had commenced operations.

Officials told FE that the view has gained currency that the time is not conducive for burdening the operators with financial penalty as they are financially stretched and have to pay their adjusted gross revenue dues. Further, since the government has now announced that the next round of auctions will be held in March, it doesn’t want to take any action upsetting operators which may constrain them from participating in the auctions. Since a new chairman has taken charge at Trai, there is also feeling that the regulator will not feel slighted and issue can be safely buried.

Though on the insistence of the Trai, the Digital Communications Commission (DCC), the apex decision-making body of the department of telecommunications, had approved the penalty in July last year, the matter has still not got the approval of the telecom minister, Ravi Shankar Prasad. The DoT also feels that if the demand notices raised, Bharti and Vodafone Idea are sure to challenge it in the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), and the government is not keen at this stage to enmesh itself in yet another legal tussle.

Officials said the DCC had tried its best to get the matter sorted by asking the Trai to review the amount as the sector was under financial stress, but, unfortunately, the regulator stuck to its guns. In fact, before the matter was sent to Trai for a review, a seven-member internal committee of DoT had rejected by 4:3 the regulator’s recommendation to levy the penalty and had left the final decision to the DCC.

To be sure, even a year back the DCC could have ignored the Trai’s recommendation and gone ahead with either scrapping the penalty or lowering the amount. This is because the Trai does not have powers to levy fines. It had suo motu issued the recommendation to the DoT based on a complaint by Reliance Jio. As a licensor the power to levy fines and or cancel licences lie with the DCC which may seek recommendations from the Trai, but in this case it was not so.

In October 2016, Trai had recommended that a fine of Rs 50 crore be levied on Bharti Airtel and Vodafone each in 21 circles, while a similar amount be levied on Idea Cellular in 19 circles. Thus the penalty for Bharti and Vodafone was Rs 1,050 each, while for Idea it was Rs 950 crore. In August 2018, Vodafone and Idea merged and was christened Vodafone Idea.

The Trai had recommended fines after it had issued show-cause notices to the three operators towards end-September 2016 after finding high level of congestion in their networks, leading to call failures made to and from Jio network beyond the permissible limits.

The three incumbent companies in their defence had said that there is a 90-day period since the commercial launch of services by an operator for providing the demanded points of interconnect and they conformed to this deadline. They said it was unfair of Trai to monitor congestion levels on a daily basis and recommend a fine. Ideally, it should have measured congestion on a monthly basis, where the results would have been different.

The quality of service norms prescribe that congestion level should not exceed beyond 0.5%, which means that of 1,000 calls not more than five should fail. The congestion level is different from call drops. In the former a call does not get connected whereas in the latter a call drops after it is connected. For call drop, the failure should not be more than 2%.

The regulator has no powers to levy penalty on the operators who do not follow its directive. The maximum it can do is to chargesheet them in a civil court.