Digital Communications Commission approves penalty on Airtel & Vodafone Idea

Digital Communications Commission (DCC) on Monday approved the imposition of penalty on incumbents Bharti Airtel, Vodafone and Idea Cellular (now Vodafone Idea) for not providing points of interconnection (PoIs) to Reliance Jio.

The Commission did not approve of Rs 3,050 crore penalty as suggested by the telecom regulator Trai and referred it back seeking fresh views on the penalty amount, considering financial stress in the telecom sector.

An amount of Rs 1,050 crore was imposed as a penalty by Trai on both Airtel and Vodafone India, while another Rs 950 crore was imposed on Idea Cellular. Vodafone India and Idea Cellular have merged their operations into a single entity Vodafone Idea.

Interconnection points are critical to making a call from one operator to another.

The Commission is the highest policy-making body of the department of telecommunications.

The Commission did not agree with a proposal of one of the secretaries to also fine Reliance Jio, as it too failed to deliver quality service to customers, according to sources.

In October 2016, Trai had recommended imposing a total penalty of Rs 3,050 crore on Airtel, Vodafone Idea for denying points of interconnection to the then new player Reliance Jio.

Reliance Jio had complained to Trai that over 75% of calls on its network were failing as incumbents were not releasing sufficient number of PoIs. Subsequently, Trai had given its recommendations but a final decision was pending with the department of telecommunications.

Since the entry of Reliance Jio into the telecom sector, the financials of incumbents have nosedived. Some telecom players have exited the market, while some filed for bankruptcy with select opting for consolidation to beat the competition. Vodafone India and Idea Cellular merged to create the largest telecom company Vodafone Idea. The industry has been demanding rationalisation of various levies and taxes imposed on the telecom sector. Due to the ongoing financial stress, few players have asked the government not to conduct a spectrum auction this year.