A fine of Rs 3,050 crore was imposed on the two and Idea over interconnect row with RJio
Deferring a final decision on the imposition of about Rs 3,050 crore penalty on incumbent telecom players, the digital communications commission (DCC) has asked the department of telecommunications (DoT) to examine past Supreme Court judgements and Competition Commission of India (CCI) which could have a bearing on the penalty issue.
A cumulative penalty of Rs 3,050 crore was imposed on Airtel, Vodafone and Idea (Vodafone Idea is a merged entity now) in October 2016 by telecom regulator Trai for not giving interconnection points to Reliance Jio. Interconnection points are critical to make a call from one operator to another.
DCC, earlier Telecom Commission- the highest policy making body of DoT, in a meeting on Thursday decided to take up the matter in the next full commission meeting as some members were not present. The penalty on Airtel and Vodafone was around Rs 1,050 crore each, while it was Rs 950 crore on Idea Cellular.
There have been different views in the two committees’ reports, while one is in favour of imposing penalty, the other is against it. The divergent views within the government have delayed a consensus. Also, it has been asked by DCC to study implications of CCI and SC judgments which came in between and whether those have any bearing on the committees’ recommendations, according to sources.
Trai’s recommendation came as a result of Reliance Jio’s complaint that over 75% of the calls on its network were failing as incumbents were not releasing sufficient points of interconnection (PoIs). Apart from this, DCC also asked telecom PSUs- BSNL and MTNL to explain their turnaround strategy and give an assurance to achieve higher revenue for getting financial support from the government.
Both firms have sought help from the government on a voluntary retirement scheme (VRS), allotment of 4G spectrum and asset sales approval. MTNL asked for a refund of Rs 4,130 crore broadband wireless spectrum on account of interest. BSNL has also asked for asset monetisations worth Rs 90,000 crore.
The VRS scheme for BSNL and MTNL will have a revenue impact of Rs 6,365 crore and Rs 2,120 crore respectively. BSNL has 1.76 lakh employees across India and MTNL has 22,000 employees and operates in Delhi and Mumbai. It is estimated that 16,000 MTNL employees (of the total 22,000) and about 75,000 of BSNL employees (of the total 1.75 lakh) may retire in the next 5-6 years.
The VRS based on the Gujarat model is being considered to be funded through a long-term bond issue to bring down its cost factor, while land monetisation through lease would be handled by the institutional mechanism.
The DoT has recommended that the VRS of both PSUs should be funded through a 10-year bond issue and the bond should be paid back by lease revenue that they will get from land asset monetisation. Both the companies have also sought spectrum for 4G services through equity infusion from the government.
The Commission also asked the Universal Service Obligation Fund to work out plans on leasing of optical fibre network laid down under the BharatNet project for a 20-year period to telecom operators through auction. The aim is to increase its adoption, subsequently, sale option would also be considered.
HANGING IN BALANCE
- Rs 3,050 cr – penalty was imposed on Airtel, Vodafone and Idea collectively
- Rs 1,050 cr – penalty on Airtel and Vodafone each
- 75% – of the calls on Jio’s network were failing as incumbents were not releasing sufficient PoIs
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "Penalty")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}