Airtel rejects DoT demand for Rs650 cr ‘roaming’ fine

Bharti Airtel Ltd, India's biggest mobile telecom operator, today said it has rejected a penalty notice from the Department of Telecommunications as "baseless"; adding that it plans to appeal the $109 million fine demand.

"Bharti Airtel believes that the demand for penalty of Rs650 crore ($109 million) is devoid of any merit and has no justification both on facts and in law," Bharti Airtel said in a statement from its Delhi headquarters.

"We are disappointed that the Department of Telecommunications ... has thought it fit to issue such a baseless penalty order, leaving us with no choice but to litigate."

The DoT had issued the penalty notice to Bharti in June for alleged violations of telecom licensing rules between 2002 and 2005. The government agency claims Bharti had allowed roaming subscribers to make calls at local rates instead of national long-distance tariffs.

The development reflects growing regulatory uncertainty for telecom operators in India, the second-largest market in the world by users. Indian telecom companies face as much as 65.0 billion rupees ($1.09 billion) in penalties for alleged violations of licensing terms, according to industry estimates.

India is divided into 22 service areas, and each service area requires a separate license. Long-distance calls between two service areas attract higher charges than local telephone calls.

New Delhi-based Bharti said it had "fully satisfied" regulatory requirements at the time of the alleged violations, adding that the regulator had called the service "customer friendly and in compliance of the license conditions."

Bharti, about a third of which is owned by SingTel, said it got about Rs16 crore as revenue from offering the service, which the telecom department was aware of. The regulator has after eight years issued a demand notice "in complete disregard of the natural process of justice," the statement said.