PoI issue: Trai penalty of Rs1,050 cr arbitrary, Vodafone tells HC

Vodafone India on Friday told the Delhi High Court that the Telecom Regulatory Authority of India's recommendation to the Centre to impose Rs1,050 crore penalty on it for not giving interconnectivity to Reliance Jio was an "arbitrary" decision.

Trai has recommended imposition of a fine of Rs50 crore for each of the 21 circles of Vodafone, except in Jammu and Kashmir, coming to a total of Rs1,050 crore, over the PoI issue.

Justice Sanjeev Sachdeva did not pass any orders after Trai's lawyers sought time till 19 December to take instructions on the steps taken by the authority after it issued a show cause notice to Vodafone on 27 September.

Vodafone has claimed that the entire process adopted by Trai was "arbitrary" as Reliance announced its Jio offer on 5-6 September and had thereafter made payment for "augmentation of interconnection links" on 25 September after which there was a 90-day period to provide interconnectivity.

Senior advocate Meet Malhotra and central government standing counsel Kirtiman Singh, appearing for Trai, sought time for instructions after the court asked how the 30 September meeting of Trai with all operators was held before expiry of 10 days given to Vodafone to reply to the show cause notice.

"In these circumstances, how can even the findings be sustained," it asked and added that once a recommendation was made it could cloud the judgement of the decision-taking authority.

Vodafone, represented by senior advocate Rajiv Nayar, contended that it had time till December end this year for providing interconnectivity to Jio and even before expiry of the period it has provided 10,000 connections.

During arguments, Nayar said Trai did not have the power to recommend imposition of penalty and it can only recommend revocation of licence for breach of licence conditions and sought setting aside of the recommendation.

He argued that Trai has the power to impose "financial disincentives" for breach of Quality of Service regulations and to ensure compliance of terms and conditions of licence.

Vodafone has also said that no proper hearing was given to it by Trai before issuance of recommendation of 21 October.

The court will hear the matter again on 21 December. Trai, in its recommendation to the DoT, had said it has found Vodafone to be non-compliant with licence conditions and service quality norms given the high rate of call failures and congestion at interconnect points for RJio.

The regulatory authority also said that denial of interconnection by some existing operators, including Vodafone, to RJio "appears to be with the ulterior motive to stifle competition and is anti-consumer".

Besides Vodafone, Trai had also recommended imposition of penalty of Rs1,050 crore on Airtel, at Rs50 crore for each of its 21 circles, and Rs950 crore on Idea Cellular for 19 circles.

The regulator had not recommended cancellation of their telecom licences saying it may lead to "significant consumer inconvenience".

The recommendation had come on a complaint by Reliance Jio that over 75 per cent of calls on its network are failing as these telecom companies were not giving sufficient points of interconnect that would help complete calls.