TELECOM WAR — TRAI SAYS PENALTY ON INCUMBENT OPERATORS TO STAY

The telecom regulator’s decision to stick with its recommendation of imposing Rs.3,050 crore penalty on three top incumbent operators — Bharti Airtel, Vodafone India and Idea Cellular — for not providing obligatory points of interconnect (PoIs) to the new entrant Reliance Jio Infocomm will further intensify the war between the trio and the new player. What has the TRAI told DoT on its queries on this contentious issue, read on…

NEW DELHI, MAY 24, 2017: Continuing with its strong stance on the issue of penalising Bharti Airtel, Vodafone India and Idea Cellular with a Rs.3,050 crore penalty for not providing PoIs to Reliance Jio Infocomm, the Telecom Regulatory Authority of India (TRAI) has said that the incumbent operators “intentionally denied and delayed” giving points of interconnect (PoIs) to Jio “only to restrict a new entrant…causing a lot of inconvenience to consumers”. It also indited incumbent operators of “blatant and wilful violation of the licence conditions and TRAI’s regulations”.

TRAI, while replying to queries raised by the Department of Telecommunications (DoT) on the issue, said incumbent operators were legally bound to give PoIs to Reliance Jio, violation of which warrants revocation of the licence, but it cannot take this harsh decision as it would cause significant inconvenience to crores of subscribers across the country. Following complaints from Reliance Jio, TRAI had found the incumbent operators guilty and had imposed Rs.1,050 crore penalty each on Airtel and Vodafone and Rs.950 crore on Idea Cellular.

TRAI said telecom operators are bound by licence conditions that make it obligatory on it maintaining quality of service (QoS) and a breach thereof is liable to be treated as breach of terms and conditions of the licence. It is mandated by law to ensure effective interconnection and QoS to the consumers, and non-compliance of terms and conditions of the licence warrants recommendations for the revocation of the licence.

“However, the Authority was mindful of the fact that revocation of the licence will entail significant consumer inconvenience and therefore in view of the larger public interest involved, the Authority recommended a penal action of Rs 50 crore per circle,” it added.

The telecom sector regulator also said after its intervention, Bharti Airtel, Vodafone India and Idea Cellular provided PoIs at much shorter notices (in some 7 instances within 2-3 days) implying that they were capable of providing such PoIs without any delay.

In February, the DoT had asked TRAI to clarify on almost a dozen points including the basis of which the penalty amount was calculated and the provision in the law that enabled it to do so.

TRAI has told DoT that there is no provision in the licence or regulations to deny/delay provisioning of PoIs during the test phase. “On the contrary, the testing cannot be completed unless sufficient PoIs are provided,” it said on the incumbents contesting testing by Reliance Jio.

On the issue of incumbent operators demanding more money for transferring a call on their networks instead of 14 paisa per minute, TRAI said the present termination charge has been prescribed after a comprehensive consultation process. “It fully recovers the cost incurred by the terminating service provider. Therefore, there is no question of loss to terminating service providers due to asymmetry in traffic with Reliance Jio,” it said.

TRAI also stated that it issued showcase notices to incumbent operators promptly as “QoS parameters were so bad and millions of consumers were suffering due to blatant and wilful violation of the licence conditions and TRAI’s Regulations”.

The regulator said it was wrong to suggest that it did not give incumbent operators to put their views on the issue. It took cognisance of all the submissions of Airtel, Vodafone and Idea including the efforts made by them but the steps taken were insufficient to bring down the PoI congestion to the desired level, and that the three operators “appeared to have ulterior motive to stifle competition”, it added.

TRAI also castigated DoT for its view in the reference note. “As per the TRAI Act 1997, DoT is required to send back the recommendations to the Authority for its reconsideration, however in this case, DoT has sent its view on each and every paragraph of the analysis and facts of the case which has never been the practice till date. However, the Authority has decided to overlook this aberration and has given its response to the relevant comments of the DoT,” it added.

Reacting on the development, Bharti Airtel said TRAI’s assessment is incorrect and appealed to DoT to reject it. “We disagree with TRAI’s observations and believe that the penalty has been recommended on the basis of an incorrect assessment of the situation on ground. We request the DoT to reject these recommendations and take into consideration the actions taken on ground by Bharti Airtel. The fact is that we have provided PoIs to Jio at an unprecedented pace despite the provision of 90 days in the license,” the leading operator said in a statement.


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